You want to power your home with clean, green power and not damage the planet? And green tariffs are an easy way to do just that, right?
But what do green tariffs actually achieve and can we do better?
How green tariffs work
Energy suppliers need to purchase a ‘green certificate’ for every unit of electricity supplied under a green tariff. Wind farms, solar parks, hydro stations and biomass plants are all issued with green certificates (or REGOs – Renewable Electricity Guarantee of Origin as they’re officially called) for the electricity they produce. The certificates verify that green electricity has been generated.
But, green certificates can be bought separately from the power itself. Wind farm can sell their electricity to one energy supplier and the green certificate to another. This means an energy supplier can buy all its power from coal, gas or nuclear and, as long as they buy enough green certificates to match the amount of electricity they have supplied, they can still call the tariff green. And it’s true that for all the electricity supplied under green tariffs, somewhere, an equivalent amount of renewable electricity has been generated.
Another but – the green certificates don’t even have to have been generated in UK. In 2019 57 million green certificates were imported (1). This equates to around 17% of the UK’s whole electricity supply. So the electricity associated with that green power didn’t necessarily even come to UK.
But green tariffs are still doing good, aren’t they?
If more people go onto green tariffs then more green power needs to be generated to produce the green certificates. And even if those green certificates are produced abroad, the green power is still displacing fossil fuel, and climate changing gases don’t respect national boundaries. So surely a green tariff still has an impact?
In the UK the vast majority of renewable energy projects receive subsidies. The value of the electricity and subsidies combined is around 6p/kWh to 15p/kWh. Whereas a green certificate is worth about 0.3p/kWh. It costs a supplier just £1 to make a tariff ‘green’.
Investment in the UK’s wind farms and solar parks has been driven by the value of the subsidy and the electricity price. It’s really hard to say that the value of green certificates has enabled any wind farms or solar parks to be built. And it’s really hard to see they will in future.
Most green tariffs don’t deliver the impact many think they do. Many consumers sign up to green tariffs believing they are doing their bit for climate change, whereas in reality hardly anything is changing as a result of their actions. We believe if consumers knew what their green tariffs were actually achieving they would choose other, more impactful, actions instead.
So what can you do?
To limit climate change the world needs lots more wind farms and solar parks to be built, to generate more and more green, zero carbon electricity. To have an impact, you need to help get more wind and solar parks to be built.
Putting solar on your roof is great, but you need to own a lovely sunny roof and around £4-8,000 to spend. Not so great for people who live in flats, rent or don’t have a chunk of money to spend. Large scale wind farms and solar parks are the UK’s cheapest source of electricity in the UK.
Ripple enables you to join together with thousands of others and collectively own new wind farms and (in future) solar parks and have the green electricity they produce supplied to your home via the grid. You’re making the wind farm happen, ensuring new, zero carbon power is produced for 25 years.
It’s greener than a green tariff and cheaper than rooftop solar. 😊
You should note, not all green tariffs are the same. Some do buy their power direct from renewable energy projects in the UK. Some pay a higher price for green certificates and some (like our supply partner Co-op Energy) buy power from community renewable energy schemes.
Doing your research is critical, but you shouldn’t have to. It should be clear what’s making a real difference to climate change, and what’s not.
- Source: Ofgem