More than three in five households in Britain are now supplied by green energy companies, new research has revealed.
Homes with “green” suppliers – those who only offer electricity rates backed by guaranteed-of-origin renewable energy certificates – soared less than 20% in 2017, according to data from Cornwall Insight .
The main reason this figure has exploded, according to energy analysts, is the rebranding of a few big suppliers as 100% green energy in recent years, like Shell Energy.
Could the number of homes now with green suppliers just be the result of greenwashing?
He said the boom in green tariffs has been in part because consumers are doing their part to reach net zero.
He says some are increasingly taking renewable credentials into account when switching energy providers.
At the start of 2019, 9% of respondents to an Ofgem survey on perceptions of the energy market cited green energy as the main reason for switching supplier. By the end of last year, that figure had risen to 19%.
Oliver Archer, Senior Analyst at Cornwall Insight, said: “Changing trends don’t tell the whole story.
“Almost 80% of the increase observed between 2019 and 2021 can be attributed to the rebranding of a few large suppliers as 100% green until 2019 and 2020.
“It is also difficult to determine the relative contributions of prices, services and renewable tariffs to the rapid growth of green challenger brands such as Octopus Energy and Bulb.”
The surge in households joining green suppliers could also be due to the practice of greenwashing which is becoming widespread.
This is where the suppliers say their energy is renewable, but in some cases the fuel is not actually obtained sustainably.
Instead, an energy tariff can be labeled as green or renewable if a supplier purchases Rego certificates for a nominal fee, but that does not require them to purchase electricity directly from renewable generators.
In fact, the Rego system requires licensed suppliers to disclose to potential and existing customers the mixture of fuels used to generate the supplied electricity.
The number of customers with green suppliers has exploded over the past two years
Ofgem issues a Rego certificate per megawatt hour of eligible renewable production to renewable electricity producers.
However, there is an oversupply of these certificates, as there have been times when excess renewable energy has been produced.
These additional certificates can be purchased cheaply by suppliers, whether their electricity comes from renewable sources or not, leading critics to argue that “green” tariffs do not encourage renewable energy production.
Archer added, “Rego’s low price allowed it to be labeled as a green supplier without heavily sacrificing the primary tool to attract new customers – cheap rates.
“As a result, more than half of the suppliers in the market are now green.
“Critics would say that the current system makes it difficult for consumers to understand which suppliers are providing really additional support for green production.
“As green tariffs become increasingly ubiquitous, the government plans to consult this year on reforms to provide consumers with more transparent information, including quantifying the added benefit of tariffs marketed as green.”
Therefore, while many consumers believe they are receiving a green tariff, they may wish to verify their supplier’s credentials.
The surge in households joining green suppliers could be due to the practice of greenwashing
The best green offers on the market
There are currently a number of green energy offerings on the market.
The best rate currently is from the challenger supplier, PFP Energy, on its Green Variable s2 Paperless contract which costs an average of £ 844.61 per year.
The supplier appears three more times in the list – totaling two fixed offers and two variable rates.
Neo Energy has the second cheapest tariff on its variable NEO 4.1 offering which costs £ 858.59.
Meanwhile, Eon Next is the only Big Six vendor to make the list with its Next Exclusive v2 deal.
The flat rate will cost customers an average of £ 942.10 per year.
Several of the top ten are also variable rates, which is unusual as fixed offers are usually much cheaper thanks to their fixed cost.
|Name of supplier||Supplier rate name||Annual invoice value (£)||Fixed or
|1||PFP energy||Green variable s2 without paper||844.61||Variable||Yes|
|2||Neo Energy||NEO 4.1||858.59||Variable||Yes|
|3||PFP energy||Variable green paper billing s2||884.61||Variable||Yes|
|4||The energy of the people||Fixed price East Lothian on March 21||909.92||Fixed||Yes|
|5||PFP energy||Price for s1 paperless protection||918.70||Fixed||Yes|
|6||GOTO Energy||Standard variable||932.28||Variable||Yes|
|7||E.ON Next||Next Exclusive v2||942.10||Fixed||Yes|
|9||Outfox the market||Summer 21 Variable v2||956.92||Variable||Yes|
|ten||PFP energy||Pricing for paper billing Protection s1||958.70||Fixed||Yes|
|Source: Compare the Market (prices correct as of June 18, 2021)|
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