REGO certificates explained: what they prove for your business

What a REGO is

REGO stands for Renewable Energy Guarantee of Origin. It is a certificate issued by Ofgem to an accredited renewable generator: one REGO for each megawatt hour (MWh) of eligible renewable output. Ofgem says their main use in Great Britain is Fuel Mix Disclosure, the statement of where a supplier's electricity comes from. One MWh is 1,000 kWh, roughly what a small shop might use in a few months. Ofgem publishes guidance explaining how generators, their agents and suppliers use the scheme.

The certificate is separate from the electricity itself. That is the point of the system and the cause of most arguments about it.

Where you will see them

• In a green tariff's small print. "Backed by REGOs" or "100% renewable" usually means the supplier has bought certificates to match your use.
• In a supplier's fuel mix. Suppliers redeem REGOs against the volume they sell to show the renewable share in their fuel mix disclosure.
• In your carbon reporting. A REGO-backed tariff can reduce market-based Scope 2 emissions (emissions from purchased electricity).

You will not see a REGO on your meter, and it does not appear on a normal bill unless your supplier chooses to show it. For the tariff side, read green business energy tariffs.

How suppliers use them

1. A wind farm generates 1,000 MWh in a year and receives 1,000 REGOs.
2. It can sell the power and the REGOs together or separately.
3. A supplier that buys the REGOs, with or without the power, can redeem them against the electricity it sells.
4. Redeemed certificates are then used up and cannot be claimed again.

Suppliers use REGOs when they report their fuel mix for a period, so the certificates are matched to a supply year after the fact rather than in real time. The exact deadlines are set in Ofgem's guidance and annual fuel mix letters to suppliers; you do not need them as a customer, but they explain why a supplier's confirmation may refer to a past year.

Worked example

A hair salon uses 8,000 kWh in a year. That is 8,000 ÷ 1,000 = 8 MWh. To cover the salon's full year, the supplier needs to redeem 8 REGOs for its supply. If a green tariff costs 0.5p/kWh more (a made-up premium, not a market price), the extra cost is 8,000 × £0.005 = £40 a year. Whatever premium you are quoted, ask what it pays for: certificates alone, or power bought from named generators as well.

What REGOs prove, and what they do not

They show	They do not show
A MWh was generated from renewables and certified	That the same electrons reached your site
The certificate was redeemed once, not double-counted	That your purchase led to a new generator being built (additionality)
A supplier can evidence the renewable share of its supply	That generation matched the hours you used power

This is why "100% renewable" can be honest and still be underwhelming. Because certificates can be bought separately from the power, critics argue that a certificate-only tariff does little to fund new renewable generation. Whether or not you agree, the sensible answer is to ask your supplier what exactly stands behind your tariff.

Do you need to buy REGOs yourself?

For most small businesses, no. You buy a tariff and your supplier handles the certificates. A business with a sustainability target or customer requirement might ask the supplier for proof, such as a certificate or letter confirming the volume and the compliance year. If you generate your own power, REGOs may be an extra income stream. Ofgem's SEG guidance notes REGOs can be claimed alongside SEG payments. See Smart Export Guarantee for business.

REGOs and your carbon reporting

If a customer or tender asks for your emissions, the way you count purchased electricity matters. Under the market-based method you can reflect the supplier's REGO-backed tariff, so your figure can fall. Under the location-based method you use the average emissions of the grid, so a certificate-backed tariff does not change the result. Some buyers now prefer evidence closer to the actual hour of use. If you must report, say which method you used, keep your supplier's written confirmation and ask your sustainability adviser which standard applies. For a small business with no reporting duty, this is optional, but it helps to understand when you see a "100% renewable" label.

Related terms

See the glossary entries for REGO and green tariff, and are green business tariffs really green?.

Why the system exists

Electricity from all sources mixes in the grid, so nobody can say which electrons reach which meter. REGOs are a bookkeeping device that lets a supplier show that, over a year, the volume it sold was matched by renewable generation somewhere. Ofgem publishes guidance for generators, agents and suppliers on how they use the scheme. Because certificates are tradable, the market can send money to generators, but critics say a low certificate price sends only a weak signal to build new ones.

Questions to ask your supplier

• Which year's REGOs back my tariff, and are they from GB generators?
• Are the REGOs matched to my volume at 100%, or only part?
• Is any of the power bought directly from a named generator, as well as the certificates?
• Can you supply written confirmation for my carbon report?
• What happens if I move to a different tariff mid-year?

How to read the answer

A clear, specific reply with generator names and volumes is a good sign. A vague "all our power is green" is not enough on its own. Also remember that a tariff may include renewable power in only some hours, so your claim should be worded carefully if you use it in marketing.

Gas and other certificates

REGOs relate to electricity. Green gas products use different certification, which this page does not cover. Heat, transport fuels and carbon offsets each have separate systems, so a "100% green gas" claim needs its own evidence.

Next steps

• Ask your supplier: are you buying REGOs, are they UK-sourced, and what share of my use is covered?
• Get the answers in writing for your records.
• Decide whether you also want to cut use, which has the biggest impact; see saving energy in a small business.