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More than 65% of households are now supplied by green energy companies

More than three in five households in Britain are now supplied by green energy firms, new research has revealed.

Homes with ‘green’ suppliers – those only offering electricity tariffs backed by Renewable Energy Guarantee of Origin certificates – rocketed from less than 20 per cent in 2017, according to data from Cornwall Insight. 

The main reason the figure has ballooned is thanks to a few large suppliers re-branding as 100 per cent green energy in recent years, such as Shell Energy, according to the energy analysts. 

Could the number of households now with green suppliers just be a result of greenwashing?

It said the boom in green tariffs has been partly driven by consumers doing their bit to reach net zero. 

It says some are increasingly factoring in renewable credentials when switching energy providers.

At the start of 2019, 9 per cent of respondents to an Ofgem survey over perceptions of the energy market gave green energy as a main reason for switching supplier. By the end of last year, this had risen to 19 per cent.  

Oliver Archer, senior analyst at Cornwall Insight, said: ‘Switching trends do not tell the whole story. 

‘Nearly 80 per cent of the increase seen between 2019 and 2021 can be attributed to a few large suppliers re-branding as 100 per cent green through 2019 and 2020.

‘It is also difficult to tease out the relative contributions of price, service, and renewable tariffs to the fast growth of green challenger brands such as Octopus Energy and Bulb.’

The soar in households joining green suppliers could also be down to the practice of greenwashing which is becoming rife. 

This is where suppliers say their energy is renewable but in some cases, the fuel is not actually being sourced sustainably.

Instead, an energy tariff can be labelled as green or renewable if a supplier purchases Rego certificates for a small fee, but this does not require them to purchase power directly from renewable generators.

In fact, the Rego scheme requires licensed providers to disclose to potential and existing customers the mix of fuels used to generate the electricity supplied.

The number of customers with green suppliers has rocketed in the past couple of years

The number of customers with green suppliers has rocketed in the past couple of years

Ofgem issues one Rego certificate per megawatt hour of eligible renewable output to generators of renewable electricity.

However, there is an oversupply of these certificates, because there have been times when an excess of renewable energy has been produced.

These additional certificates can be bought cheaply by suppliers whether their power is sourced renewably or not, leading critics to claim that ‘green’ tariffs do little to encourage the generation of renewable energy. 

Archer added: ‘The low price of Rego’s has made it possible to be labelled a green supplier without heavily sacrificing on the main tool for attracting new customers – cheap tariffs. 

‘As a result, more than half the suppliers in the market are now green.

‘Critics would say the current system makes it hard for consumers to understand which suppliers provide truly additional support for green generation.

‘As green tariffs become more ubiquitous, the government plans to consult this year on reforms to give consumers more transparent information, including quantifying the additional benefit of tariffs marketed as green.’

Therefore, while many consumers believe they are on a green tariff, they may wish to check what credentials their supplier actually holds. 

The soar in households joining green suppliers could be down to the practice of greenwashing

The soar in households joining green suppliers could be down to the practice of greenwashing

Best green deals on the market

There are a number of green energy deals on the market at the moment.

The best one tariff is currently with challenger supplier, PFP Energy, on its Green Variable s2 Paperless deal costing an average of £844.61 a year.

The provider appears three other times in the list – totaling two fixed deals and two variable tariffs. 

Neo Energy has the second cheapest tariff on its variable NEO 4.1 deal costing £858.59.

Meanwhile, Eon Next is the only Big Six supplier to feature on the list with its Next Exclusive v2 deal.

The fixed tariff will cost customers an average of £942.10 a year. 

Several found in the top ten are also variable tariffs which is unusual as fixed deals are typically much cheaper thanks to their fixed cost.  

Supplier Name Supplier Tariff Name Annual Bill Value (£) Fixed or
1 PFP Energy Green Variable s2 Paperless 844.61 Variable  Yes
2 Neo Energy NEO 4.1 858.59 Variable  Yes
3 PFP Energy Green Variable s2 Paper Billing 884.61 Variable  Yes
4 People’s Energy East Lothian Fixed Tariff March 21 909.92 Fixed  Yes
5 PFP Energy Priced for Protection s1 Paperless 918.70 Fixed  Yes
6 GOTO Energy Standard Variable 932.28 Variable  Yes
7 E.ON Next Next Exclusive v2 942.10 Fixed  Yes
8 Green Redwood 947.23 Variable  Yes
9 Outfox the Market Summer 21 Variable v2 956.92 Variable  Yes
10 PFP Energy Priced for Protection s1 Paper billing 958.70 Fixed  Yes
Source: Compare the Market (prices correct as of 18 June 2021)