Green Energy Tariffs Explained: Suppliers and Costs

Green Energy Tariffs

Green energy tariffs are a great, easy way to make your home’s electricity more sustainable. However, not everyone is aware of how they work.

No matter what tariff you are on, you will still receive your electricity from the National Grid, unless you generate it yourself through solar PV for example.

A green energy tariff however, means that your supplier will match some or all of the electricity you use with the amount they buy from renewable energy generators, whether that be the company’s own renewable energy generators or from the wholesale market. This renewable energy is fed into the National Grid so the more people on green energy tariffs, the more green energy in the Grid.

Where Does Green Energy Come From?

According to the Department for Business, Energy and Industrial Strategy’s report for July to September 2020, 40.2% of total electricity generation came from renewable sources.

This green energy is made up of bioenergy (12.7%), offshore wind (11%), onshore wind (9.2%) Solar PV (5.6%) and Hydro (1.7%).

Bioenergy buildings
Bioenergy buildings

How Green is My Supplier?

Whilst most suppliers will now offer a green tariff, some suppliers are greener than others due to their fuel mix.

The fuel mix is what percentage of their energy comes from what sources such as solar, wind, coal, gas and nuclear. All companies are by law required to publish this and it must be updated once a year so you can easily find out which suppliers are greener.

100% renewable sources will always be the greenest option and some companies will go one step further by donating to green community projects, or supporting initiatives such as tree planting or carbon offsetting.

You can read our recommendations of the greenest tariffs here.

Are Green Energy Tariffs More Expensive?

In general, yes, green energy tariffs tend to be more expensive than non-green ones. British Gas, for example, says customers will pay £3 more each month for its Green Future tariffs.

However, renewable energy has grown hugely over the last decade and prices have come down. Additionally, some non-renewable tariffs can be more expensive than green ones, particularly if they are standard variable tariffs. Money Saving Expert explain here how you can go green on a budget.

We recommend comparing different suppliers, preferably the greenest ones, to find the best price.

Moreover, you may consider generating your own renewable energy through micro-generation options such as Solar PV or wind. Obviously, not every day in the UK will be windy or sunny enough to generate enough power so ideally you could store the excess energy from some days using a battery. If this option does not work for you due to effort or costs, you can sell excess back to a power company via the SEG schemes and chose a green tariff for when energy is short from the renewables.

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