Renewable Energy for Businesses Guide

Renewable business energy deals with these suppliers

Renewable Energy or Green Energy - What's The Difference?

Energy that is produced as an alternative to fossil fuels (gas and coal) is marketed by various names: renewable energy, green energy, clean energy, carbon neutral energy. There is no set definition for these terms, except that renewable energy must come from renewable sources. Any other form of alternative fuel can focus on carbon emission reduction rather than a renewable source of energy.

For businesses that have environmental obligations, the important thing is knowing whether they need energy entirely from renewable sources, or whether they need their energy to have net zero carbon dioxide emissions. This will impact the cost of their green energy tariff, but meeting ESG requirements is essential.

Regardless of the marketing name of the tariff, the business essentially needs to know if the tariff is REGO backed, or Carbon Offset backed. Their ESG obligations may rule out some renewable sources (such as hydropower) over others, so for businesses comparing business energy deals, it is essential you check a suppliers fuel mix after you get a business energy quote and before switching to a new business energy supplier.

For businesses that simply want to be mindful of the planet, then they can be much more flexible in the tariff type they choose, knowing the net benefit of a green tariff is the end result. Each certification, REGO vs Carbon Offsetting benefits the environment.

Renewable Energy Sources

Solar

Solar energy uses photovoltaic cells (PV cells, als called solar panels) to harness the sun and generate electricity.

Wind

Wind generates electricity when wind causes wind turbines to spin.

Water/Hydro

Hydroelectric dams generate electricity when water flows through turbines.

Bio matter

Bio matter is organic matter derived  from animals and plants to use as fuel to generates electricity.

Low Carbon Energy Sources

In addition to renewable, low carbon energy includes:

Nuclear

Nuclear energy is the use of nuclear reaction to generate electricity. This method of electricity generation has zero CO2 emissions, although it does produce radioactive waste.

Is Nuclear Energy Environmentally Friendly?

• Not sustainable or renewable source of energy

• Zero carbon emissions, making it a popular fuel for energy suppliers to lower their carbon emissions.

As an energy customer you need to know if you need low carbon emissions, or if you need renewable energy.

How Is Renewable Energy Supplied To The Grid?

Renewable electricity comes through the National Grid with all electricity that is supplied across the UK. And while it’s easy to imagine that signing to a renewable energy tariff will mean your electricity will be supplied separately, this is not the case. The electricity that comes out the mains is from renewable and non renewable sources.

That’s why suppliers use Carbon Offset certificates, REGO certificates and RGGO certificates to confirm that they have produced enough renewable electricity to supply their customers with renewable energy. These are also known as Renewable Energy Certificates (RECs) or Energy Attribution Certificates (EACs)

The kind of certificates that the energy suppliers choose to back their tariffs with will indicate the quality of renewable energy.

Carbon Offset and REGO Certificates Explained (Energy Attribution Certificates (EACs))

Suppliers calculate how much electricity and gas they estimate they will sell each year. They then purchase certificates to account for that. Many suppliers also generate Zero Carbon or Renewable Energy, and this also worth a specific amount of carbon credits.

Between the amount of Green energy the supplier contributes to the grid, and the amount of electricity a supplier needs to sell to its net zero or renewable customers, the supplier will purchase certificates to make up any shortfall.

This guarantees that when a customer pays for a green tariff, they are getting green energy that the supplier is directly and indirectly responsible for.

The supplier is then able to use the funds from these tariffs to re-invest and make the grid greener over time.

What Businesses Need Renewable Energy?

Businesses with Environmental and Sustainability Governance (ESG) obligations need to account for every aspect of their environmental impact - from the fuel a business journey by car, or train or plane, to how much paper they recycle, and even the impact the commercial electricity and commercial gas the business uses to keep the lights on has. These are known as Scope 2 emissions. Renewable business energy contracts are most suited to these businesses.

Many businesses wish to be supplied with renewable energy without having any ESG requirements. These businesses can be more flexible in the renewable tariff they choose when switching business energy supplier.

Why Should Businesses Invest In Renewable Commercial Energy?

• Reduced carbon footprint
• Protection against fossil-fuel influenced wholesale prices
• Government grants and investments
• Corporate and enterprise businesses can improve their carbon reporting
• Sustainability credentials
• Improved energy efficiency
• Support net-zero

Why You Need To Understand How Renewable Your Business Energy Tariff Is

That being said, every energy supplier markets products a little differently and it can be confusing sifting between a Green tariff, a Renewable tariff, a Zero Carbon tariff, a Net Zero Tariff etc, so it is important to know what to look for to help meet your business’ specific energy needs.

This guide will help clear up the mystery surrounding green energy, and help you find the most suitable tariff to comply with your ESG.

Renewable Tariff Types

Standard Energy Tariffs (Non-Renewable Energy)

With non-renewable tariffs, the energy supplier is focused on providing value for money. The energy supplier may provide renewable tariffs too, and may be investing in renewable energy generation projects too, so having non-renewable tariffs is not a reflection on the supplier.

Who Is this for?

Businesses looking to keep their business energy costs as low as possible will gravitate to non-renewable tariffs.

Compare Standard Business Energy Tariffs

Net Zero / Carbon-Offset Business Energy Tariffs

Carbon-Offset business energy tariffs are made up of a mix of renewable and non-renewable energy, but the supplier has purchased Carbon Offset certificates to compensate for the CO2 released in generating their energy for customers on these tariffs. The benefit of Carbon Offset certificates is that these fund carbon capture projects, such as reforestation in the UK or abroad. Carbon capture (technically, carbon sequestering) benefits the environment by erasing damage caused by climate change. The downside is that non-renewable energy is still being used to generate power.

Customers need to be sure that their tariff includes renewable sources of fuel, and not just carbon offset certificates, as this can be seen by some as greenwashing.

Fuel sources:

• Gas + carbon offset certificates
• Coal + carbon offset certificates
• Wind
• Solar
• Hydro
• Biomass
• Geothermal
• Nuclear

Who is this for?

Businesses with Net-Zero commitments and need to report their Scope 2 carbon emissions as zero will benefit from these green energy tariffs. These businesses need to be sure that carbon offset certificates are eligible within their ESG obligations.

Compare Carbon Offset Business Energy Tariffs

REGO Business Energy tariffs

Energy supplier is buying energy backed by REGO certificates. I.e energy generator has been issued REGO certificates by Ofgem as proof that energy generated is renewable. These tariffs also qualify as low Scope 2 emissions - you'll need to check the supplier's fuel mix document for the CO2 emissions of a REGO tariff.

Who is this for?

Businesses with renewable energy commitments will opt for these tariff types as the REGO certificate guarantees the source of electricity is renewable.

REGO certificates exclude nuclear energy as it is not renewable, despite being a zero carbon fuel source.Tariffs for this energy are usually a little higher than Carbon Offset tariffs due to the stricter criteria this fuel must meet. Scope 2 as zero. Many enterprise and corporate businesses that rely on half hourly meters and energy procurement will see value in these tariffs.

It also means that only renewable sources were used to create the electricity they sell.

• Wind
• Solar
• Hydro
• Biomass
• Geothermal

Compare REGO Business Energy Tariffs

REGO Certificates vs Carbon Offset Certificates

REGO certificates differ from carbon offset certificates in that they both prioritise slightly different things. REGO prioritises renewable energy, and Carbon Offsetting prioritises removing CO2 from the atmosphere.

Additionally, renewable energy does not necessarily mean zero carbon emissions, due to the energy generation being part of a larger system. Many businesses and energy suppliers alike combine REGO certificates with Carbon Offsetting to bring the net CO2 emission to zero.

While renewable fuels achieve both of those aims, a net-zero outlook that uses carbon offsetting can also use nuclear power.

Renewable Energy Prices - Does Renewable Energy Cost More?

Renewable and net zero tariffs generally do cost more, due to the cost of investing in renewable energy generation, and the additional cost of certifying the energy the supplier has purchased. Some suppliers offer renewable energy as standard, while others may offer a promotion where the cost of renewal is standard.

Below is a comparison of renewable tariffs against non-renewable tariffs for suppliers on our panel of 18 that offer both tariff types. You can see that the standing charge is a little higher or the same, and unit rates are a little higher if not the same. Generally renewable tariffs represent a 2% increase in annual costs, although an environmentally minded business can find energy savings through energy efficiency exercises.

Renewable business energy prices above are based on two-year contracts, using 20,000-kWh per year in London for a contract commencing in March 2025 and are for suppliers on our panel that show both. Business energy VAT and Climate Change Levy (CCL) are excluded.

Get A Renewable Business Energy Tariff

How Clean Is The UK’s Energy?

In 2024, renewable energy was about 47%, and the share of low carbon energy rose to 57% when including nuclear power. This is a high point in UK energy production: in 2012, renewable energy counted for a small minority of energy generation. The rise of renewable energy has largely come through the decline of coal power; gas as a fuel for electricity generation has remained quite steady.

 

 

Environmental Impact of Energy Sources

Below table shows environmental impact of different fuel sources

Source: UK Parliament - Carbon Footprint of Electricity Generation (2011)

Renewable Energy By Business Energy Supplier

This table maps out the renewable tariffs offered by each supplier on our panel of business energy suppliers.

 

*Contract renewal only

**TotalEnergies offer carbon offset certificates in addition to a renewable tariff to eliminate a customer's carbon emissions when the tariff itself cannot.

 

Contact Business Electricity Prices to discuss your business’ renewable energy needs.