Do green energy tariffs make a difference? 

Lots of companies market ‘100 percent renewable’ or ‘green’ energy tariffs.

But many green tariffs do little or nothing to change actual carbon emissions. In this article, we explain why – and highlight the handful that do offer meaningful green options. 

What is a green energy tariff?

Green energy tariffs are electricity tariffs ‘backed’ by renewable power. Unfortunately, though, this does not mean that the energy used in your kettle or toaster has come from a wind or solar source.

All energy in the UK comes from the national grid – which is essentially a mixing pot for all energy sources, including fossil fuel and nuclear alongside renewable. Whatever tariff you are on, you are using the same mix of energy.

When companies claim to be selling ‘renewable tariffs’ they can mean two different things. Either, they can mean that they buy certificates called REGOs that say their energy came from a renewable supply. Or, they may actually invest in renewables, either by building things like solar farms and wind turbines themselves or by having contracts directly with renewable suppliers.

Both kinds of tariff count as ‘green’ or ‘renewable’ under UK law. 

Do green tariffs have a lower carbon footprint?

No, green energy tariffs do not have a lower carbon footprint.

When you switch your washing machine on, in reality, you are still using a mixture of oil, gas and renewables - or whatever is fuelling the grid at that particular time.

The grid uses the renewable power that is offered to it first, and then fossil fuels to top that up, which means that at times of lower demand, like at night, electricity is likely to have a lower carbon footprint.

Reducing the amount of actual energy you use in your home, or using it at times of lower demand are therefore the only ways to cut your carbon footprint. We have articles on reducing your home carbon footprint, including steps to insulating your home on a budget, setting up smart heating, and choosing the right heat pump. 

Do green tariffs pay for renewable generation in the UK?

In theory, it shouldn’t be a problem that everyone draws from the national grid. If you are on a 100% renewable tariff, your supplier will add sufficient renewable energy to the pool to match what you are taking out.

In practice, however, this isn’t quite the case.

Companies can claim to provide 100 percent renewable tariffs, without generating any renewable energy at all. This is because they can buy REGOs from other suppliers, who do produce renewable energy.

The plan was for REGOs to contribute money towards renewable generation. But in practice, there isn’t enough demand for them to make them really meaningful. Their price is so low they make a miniscule difference to how much renewable energy is produced in the UK.

Where a company calls an energy tariff ‘renewable’ but is only relying on REGOs, Ethical Consumer considers it to be making ‘meaningless claims’, and marks it down.

To make things even more complex, whatever tariff we are on, we all pay something towards renewable development. This is because of some complicated government regulations, which we explain in more detail in the box below.

In short, this means that most renewable tariffs are about as ‘effective’ as any conventional ones. Although, it may send some kind of signal to the government that green energy supply is a public concern. 

Do any green energy tariffs make a difference? 

But before you give up in despair, there is some good news.

There are a very small number of green energy tariffs in the UK that are doing something different – including companies like Ecotricity, Good Energy, 100Green (previously Green Energy UK) and Ripple.

Some of these companies directly pay a green supplier for their renewable energy (rather than just purchasing random certificates). They therefore provide a guaranteed income to them.

Other companies actually produce the green energy themselves. Ripple is an innovative example of this, where consumers actually buy shares in a wind or solar farm – the returns on which are discounted from your energy bill.

In order to be truly green, Ethical Consumer expects companies to be taking one of these two approaches, and to have a commitment not to build any further fossil fuel plants.

Our Best Buys in our ethical energy suppliers guide are making these steps in an effort to promote renewable energy transition.

However, it’s important not to overestimate the impacts that their tariffs have. Avoiding companies that are involved in new fossil fuel extraction or production (including some banks) is also a good step.

But the biggest steps you can take remain minimising your energy use and pushing for political action.