Green tariffs: How to cut your energy consumption

Blogs 16 May 2023

Find out what green tariffs are, how they can help you reduce your energy consumption and what you need to consider when choosing a tariff.

Reducing your energy usage as a business is incredibly important in the fight to becoming more sustainable. Not only are there financial and environmental benefits, but it also allows you to keep in line with energy legislation and face little risk of non-compliance. 

Sustainably generated electricity is much more beneficial for business use, minimising electricity from high-carbon sources taking up a higher percentage of our national grid.  You can purchase green tariffs to minimise your energy usages and to cut your own consumption. We’ll look at the various ways you can do this and what you need to watch out for.  

What is the impact of reducing energy consumption? 

Decreasing your energy consumption as a business is crucial as we barrel further into the climate crisis.  To start cutting your energy emissions, you must take responsibility for your companies’ contribution to greenhouse gas emissions and global warming. However, small things can be done along the way to chip away at your energy consumption, such as swapping to energy saving LED light bulbs or switching appliances off rather than leaving them on standby 

What is a green tariff? 

A green tariff enables a business to reduce their energy consumption. The tariff means that some, or even all, of the electricity you buy is ‘matched’ by a business’ purchase of renewable energy sources that your supplier makes on your behalf.  

Renewable energy sources come in a vast variety including wind farms, hydroelectric power stations and solar farms. Some green supply tariffs are also nuclear free. Choosing a green tariff also shows that the demand is there, sending a clear message to your supplier and the wider industry and supply chain that you wish to avoid electricity generated from the burning of fossil fuels in favour of increased renewable energy sources.  

How to choose a green tariff 

When considering green tariffs, you need to decide which is best for you. The greenest tariffs are when your supplier buys renewable ‘green’ electricity and has the accompanying certificates directly from the generators, such as UK wind and solar farms. With this, the provision of security within your renewable usage brings tangible benefits. Energy supplies that do operate in this way will be transparent about where such electricity is sourced, such as Good Energy, GEUK and Ecotricity.  For more help on how to find a green energy supplier, visit the UK Business Climate Hub.

However, some green tariffs are not so green. Some electricity suppliers provide electricity from a mixture of green and brown generators. The green tariff from this will be backed up by the REGOs from their more low-carbon electricity sources. However, this does not necessarily mean that suppliers provide more renewable energy to their buyers. Standard tariffs with a mix of sources could divert potentially ‘dirtier’ energy towards your business. In this case, tariffs such as these do not necessarily lead to increased support for renewable generation.  

Lastly, regarding tariffs, ‘greenwashing’ is commonplace from electricity suppliers. Some who claim to supply 100% renewable energy do so by simply buying excess REGO certificates. These cheaply available certificates are available at times of excess production across the European Union, which means that little is done to encourage the generation of renewable energy in the UK. However, if your business purchases a higher-tier green tariff, that has the potential for not only increased favourability towards your business, but you can help shift your entire industry towards greener energy. 

Next steps 

Purchasing green tariffs on top of methods to reduce energy consumption is a sure-fire way for your business to save money in the long run. Not only do you benefit from reduced costs, but you can also gain a competitive edge from improving your energy consumption through green tariffs.  

If you implement ISO 50001:2018 as an energy management standard, you comply with the Energy Saving Opportunity Scheme, further improving your efficiency as a business. You can set year-on-year targets to improve your consumption, train your staff up and give confidence to your supply chain. 

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