A Guide to Green Energy Tariffs

Choosing a green energy tariff seems like a straightforward way to reduce your carbon footprint. These tariffs promise that your energy comes from renewable sources like wind, solar, or hydro power. However, the reality is a little more complex. All electricity - whether from a wind turbine or a gas power station - is mixed together in the National Grid before it reaches your home. This means the physical electricity you use is always a blend of different sources.

When you sign up for a green tariff, your supplier is making a commitment to match your consumption with an equivalent amount of renewable energy put back into the grid. The crucial question is how they do this. Some suppliers invest directly in new renewable projects, whilst others simply buy certificates to label their energy as green. This guide will help you understand the difference, avoid ‘greenwashing’, and make a choice that genuinely supports the transition to clean energy.

What Makes an Energy Tariff ‘Green’?

A green tariff’s environmental impact depends entirely on the supplier’s actions. There are different ‘shades’ of green, and not all tariffs are created equal.

Electricity: From Generation to Certificates

The most impactful green electricity tariffs come from suppliers who either generate their own renewable power or buy it directly from renewable generators through agreements known as Power Purchase Agreements (PPAs). This approach, often called ‘additionality’, ensures that your money is helping to fund and build new renewable capacity in the UK.

A much more common, and less impactful, method involves the purchase of Renewable Energy Guarantees of Origin (REGOs). These are certificates that prove a certain amount of electricity was generated from a renewable source. However, as we’ll explore below, these can be bought cheaply and separately from the actual energy, allowing suppliers to market standard energy as ‘100% renewable’. This practice has led to concerns about misleading marketing, prompting a UK government investigation into greenwashing in the sector.

Gas: Biomethane and Carbon Offsetting

Natural gas is a fossil fuel, so making it ‘green’ is a different challenge. Some suppliers offer ‘green gas’ or biomethane. This is produced from the breakdown of organic matter - like farm waste or food scraps - in a process called anaerobic digestion. The Green Gas Certification Scheme (GGCS) tracks biomethane through the supply chain, allowing suppliers to prove they have bought enough to match their customers’ usage.

Where 100% biomethane isn’t offered, suppliers may provide ‘carbon neutral’ or ‘carbon offset’ gas. This means the supplier continues to provide standard natural gas but invests in environmental projects, such as reforestation or renewable energy schemes elsewhere in the world, to balance out the carbon emissions produced by your gas usage.

Understanding the REGO Certificate Loophole

A Renewable Energy Guarantee of Origin (REGO) is an electronic certificate issued by the energy regulator, Ofgem, to verify that one megawatt-hour (MWh) of electricity has been produced from a qualifying renewable source. Every supplier must present REGOs to prove the renewable percentage in their annual Fuel Mix Disclosure.

The problem is that these certificates can be legally traded separately from the electricity they represent. This has created a significant loophole. A supplier can buy its electricity from the wholesale market - which is often powered by fossil fuels - and then purchase enough cheap REGOs to legally brand that energy as ‘100% renewable’. The cost of these certificates can be as little as £1.50 per household per year. This practice provides little financial incentive for new renewable projects. Ofgem itself has stated that it does not believe a 100% REGO-backed tariff offers substantial environmental benefits.

How to Find a Genuinely Green Supplier

To ensure your choice has a real impact, you need to look beyond the headline claims. Here are the key things to check when comparing suppliers:

• Check the Fuel Mix Disclosure: Every supplier must publish the sources of its electricity each year. Look for a high percentage of renewables that they have generated themselves or bought directly, not just backed by REGOs.

• Look for Investment in New Renewables: The greenest suppliers are transparent about how they are contributing to ‘additionality’. Check their website for details of wind farms or solar parks they have built, funded, or have direct purchasing agreements with.

• Consult Independent Ratings: Organisations like Which? provide annual green accreditations. For 2026, its ‘Eco Providers’ endorsement was given to suppliers who offer high levels of renewable energy and invest in future generation. The endorsed suppliers were Good Energy, Octopus Energy, Ecotricity, and 100Green. Other suppliers often noted for strong green credentials include So Energy and Co-op Energy.

• Understand Their Gas Offering: Check if their green gas is 100% biomethane or if it relies on carbon offsetting. Full biomethane tariffs are the greenest option for gas.

Are Green Tariffs More Expensive?

A few years ago, green tariffs often came with a premium. Today, that’s not always the case. Thanks to the low cost of REGO certificates and the falling price of renewable generation, many suppliers offer green tariffs that are competitive with - or even cheaper than - standard fossil fuel-based tariffs.

Most variable green tariffs are covered by the Ofgem price cap, which limits what suppliers can charge per unit of energy. For the period of July to September 2026, the cap is set at £1,663 per year for a typical household. However, some of the suppliers with the strongest green credentials, including Good Energy, Ecotricity, and 100Green, have a permanent exemption from the price cap. This allows them to charge more to directly fund their investment in new renewable generation. This means that whilst you can find a cheap ‘green’ tariff, a tariff that makes a bigger environmental difference may cost more.

The Future of Green Energy in the UK

The UK is on a path to decarbonise its power grid. The government has set a target to generate 100% of the country’s electricity from clean sources by 2030. Significant progress has already been made, with renewables generating a record 44% of UK electricity in 2025. The newly established Great British Energy will act as a public investment vehicle to further accelerate the rollout of wind and solar power.

This transition will require not just more generation but also a smarter, more flexible grid. As a consumer, you can play a part in this through smart technologies. Our guide, ‘Are Smart Meters Worth It?’, explains how they can help manage energy demand and support a renewable-powered grid.

Frequently Asked Questions

If I’m on a Green Tariff, Is the Electricity in My Home 100% Renewable?

No. The physical electricity that powers your sockets comes from the National Grid, which is a mix of all energy sources, including nuclear, gas, and renewables. Being on a green tariff means your supplier promises to match your usage by feeding an equivalent amount of renewable electricity into the grid on your behalf.

Why Are Some of the ‘Greenest’ Suppliers More Expensive?

Suppliers like Ecotricity and Good Energy, who invest heavily in building new renewable generation, have an exemption from the Ofgem price cap. This allows them to charge higher rates to fund these long-term investments. Cheaper green tariffs are often from suppliers who simply buy REGO certificates to cover their energy, which is a much lower-cost approach with less environmental benefit.

What’s the Difference Between a Green Tariff and Carbon Offsetting?

A green electricity tariff means your usage is matched with renewable electricity generation. Carbon offsetting is most often used for natural gas. It doesn’t change the source of the gas you use; instead, your supplier invests in projects (like planting trees) that are designed to absorb or prevent an equivalent amount of CO₂ from entering the atmosphere.

Can I Get a Green Tariff if I Rent My Home?

Yes. If you are the person who pays the energy bill directly to the supplier, you have the right to choose your tariff and switch suppliers, regardless of whether you own or rent. If your landlord pays the bills and recharges you, you would need to discuss it with them. For more information, see our ‘A Renter’s Guide to Saving Energy’.

Making an Informed Choice

Choosing a green tariff can be a powerful way to support the UK’s transition to a cleaner energy system, but it requires looking beyond the marketing slogans. A tariff labelled ‘100% renewable’ might not be contributing much to building a greener future if the supplier is simply buying cheap certificates.

To make a real difference, seek out suppliers who are transparent about their energy sources, can prove they buy power directly from renewable generators, and are actively investing in new green projects. By doing a little research, you can ensure your energy bills are helping to build the renewable infrastructure of tomorrow.