Are renewable business tariffs really green?
Often only partly. A 'renewable' tariff usually means the supplier holds certificates matching your usage, not that your electrons came from a wind farm or that new capacity was built. Some tariffs are backed by direct purchases from generators; ask which, rather than trusting the label.
Electricity from all generators mixes on the grid, so nobody can steer wind power to your shop. Green claims therefore rest on paperwork.
How the paperwork works: REGOs
A Renewable Energy Guarantee of Origin (REGO) is a certificate issued by Ofgem, one per megawatt hour of renewable electricity generated by an accredited station. REGOs can be traded separately from the electricity itself. A supplier selling a green tariff must hold REGOs covering the renewable electricity it claims to supply. See REGO and REGOs explained.
Where the doubt comes from
Because certificates can be bought on their own, a supplier can match your usage with cheap certificates without having bought the power from, or invested in, any new generator. Writing in 2018, the energy think-tank Regen reported that Ofgem had said it had seen no evidence that green tariffs materially add to renewable generation. That is a second-hand, several-year-old account rather than a current Ofgem ruling, but the underlying point about cheap, separately traded certificates still holds. A label such as "100% renewable" therefore tells you about certificates, not about the impact on the grid.
Better and weaker versions
| Question to ask | Stronger answer | Weaker answer |
|---|---|---|
| Where do the REGOs come from? | Bought with the power from named generators | Bought separately on the market |
| Is the fuel mix published? | Yes, with the supplier's whole mix shown | Only the green tariff is described |
| Is it a long-term deal with new projects? | Yes, such as a power purchase agreement | No |
Does it matter for your costs?
We have not found reliable published data showing whether business green tariffs cost more or less than standard ones; it varies by supplier and quote. Compare the unit rate and standing charge like for like before deciding whether any premium is worth paying.
If you want real impact
- Ask the supplier to explain, in writing, how the tariff is backed.
- Generate your own power with solar panels, which cuts both emissions and bills.
- Reduce demand first; see saving energy.
If you will report your emissions to customers, describe the tariff accurately. Our green tariffs guide covers the claims you can reasonably make.
What the rules do require
Licensed suppliers must disclose the fuel mix of the electricity they supply. To count electricity as renewable for the year to 31 March 2026, Ofgem's 2026 letter to suppliers says the evidence, mainly REGOs, had to be in the supplier's register account by midday on 1 July 2026. So a renewable claim has to be backed by evidence, but the certificate does not tell you whether new generation was funded.
Example: what you might hear
A salesperson says: "your shop will run on 100% wind power". A fair rewording is: "the supplier will cancel certificates equal to your annual usage." If you use 18,000 kWh a year, that is 18 MWh, so about 18 certificates, since one REGO is issued per MWh. Ask where those 18 came from.
Checklist before you sign
- Ask for the supplier's fuel mix disclosure and the tariff's mix.
- Ask whether certificates come with the power or are bought separately.
- Compare the price with the standard tariff; check that nothing else in the contract is worse.
- Be careful with your own marketing claims: say what you can evidence.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.