Green business energy tariffs: what 100% renewable really means

What a green business tariff is

A green tariff is a business electricity (or gas) contract that the supplier says is matched by renewable energy. It does not change the electrons reaching your meter. Your power still comes from the shared grid. What changes is the paperwork behind it, which a supplier uses to claim that the amount you use was matched by renewable generation.

That paperwork is usually REGOs, short for Renewable Energy Guarantees of Origin. Ofgem issues one REGO to an accredited renewable generator for each megawatt hour (MWh) it produces. A supplier then redeems REGOs against the volume it sells so it can report the renewable share of its supply. Our page on REGO certificates explained goes further.

Three common types of "green"

1. Certificate-matched

The supplier buys normal wholesale power and separately buys enough REGOs to cover your use. The claim is technically accurate, but REGOs can be bought apart from the power, and an energy consultancy argues this can happen without any new renewable capacity being built. Treat that as one view from a firm that sells procurement services, but it is a fair thing to ask about.

2. Sourced from named generators

Some suppliers say that they buy power directly from specific wind, solar or hydro generators, sometimes through long-term agreements, and tie their customers to that output. Ask for the generator names, locations and how much of your use is covered. Whether it is "more green" depends on the evidence you are given, so ask for it.

3. Own generation or community schemes

A few suppliers build or own generation, or invest in new projects. Again, ask what share of the supply it covers and what happens in hours when the wind is calm.

What the claim does and does not prove

• It does prove that a MWh of renewable electricity was generated and certified.
• It does not prove that the renewable power reached your premises or was generated at the moment you used it.
• It may not prove that your purchase caused new capacity to be built, which is called "additionality".

For carbon reporting, a REGO-backed tariff can reduce a business's market-based Scope 2 emissions (emissions from purchased electricity). It does not change location-based Scope 2 figures. If you report emissions to customers or in a tender, check which method they require.

Does green cost more?

Sometimes, sometimes not. Prices depend on the supplier, region and market on the day you fix, and we do not publish a guaranteed premium. As a baseline, DESNZ reports the average non-domestic electricity price for Q2 2026 was 24.51p/kWh including Climate Change Levy.

Worked example

A shop uses 20,000 kWh a year. Suppose a standard fixed quote is 27p/kWh and a green quote for the same term is 28p/kWh. These prices are made up for the sum.

• Standard: 20,000 × £0.27 = £5,400
• Green: 20,000 × £0.28 = £5,600
• Difference: £200 a year before VAT, or about 1p per kWh.

Compare the whole quote, including standing charge and any broker fee, not just the unit rate. Our cost calculator helps.

Questions to ask before you sign

1. Is the tariff backed by REGOs, by named generators, or both?
2. What percentage of my annual use is covered?
3. Are the certificates from UK generators?
4. Can I see the supplier's published fuel mix? Suppliers use REGOs to evidence the renewable share in their fuel mix disclosure.
5. Is there a green premium, and is it fixed for the contract?
6. For gas, is the "green" product certified biomethane, or an offset? Ask for the certification details.

Ask for the answers in writing and keep them with your contract, together with the date and the name of the person who gave them. If you use the claim in marketing, you need to be able to show what stands behind it.

Gas and "carbon neutral" claims

Green gas and carbon-neutral gas are not the same as green electricity. Some products blend certified biomethane; others rely on carbon offsets. We have not verified the schemes individual suppliers use, so ask which applies and request the certificate or offset details.

Suppliers known for green positioning

Several suppliers build their marketing around renewables, and we have not independently checked any individual supplier's sourcing claims. Biz Energy does not rank or endorse suppliers, so look at each supplier's own published fuel mix and contract terms and compare them against the questions above. See the UK business energy suppliers list and are green business tariffs really green?.

Beyond the tariff

A tariff is the easiest step, but cutting use usually has a bigger effect on both costs and emissions. Start with saving energy in a small business, and consider commercial solar panels if you own the roof or have a long lease.

Red flags that suggest greenwash

• "100% green" with no explanation of what backs it or which year it applies to.
• No published fuel mix, or a fuel mix that does not match the headline claim.
• Claims that you are "powering your shop with wind" when the product is certificate-matched.
• Vague terms like "eco", "clean" or "carbon neutral" with no certification or offset detail.
• A big price premium with no extra evidence.

Using the claim in your own marketing

If you tell customers your business runs on renewable electricity, make sure the wording matches the product. "Our electricity is matched with renewable certificates" is more accurate than "we run on wind power" when the tariff is certificate-backed. Environmental claims in advertising must be truthful and not misleading, so keep the supplier's written confirmation on file.

Renting and shared buildings

If you rent, your energy may be bought by the landlord and recharged. You may not be able to choose a green tariff yourself. Ask your landlord what supplies the building. See can landlords resell energy to tenants?.

Next steps

• Decide why you want green: marketing, customer requirements, carbon reporting or conviction.
• Ask suppliers the six questions above.
• Compare total annual cost against a standard deal.
• Keep written evidence of what backs the tariff.