I have never been a fan of energy tariffs that proport to be 100% green or 100% renewable energy and with the price collapse in 2025 of the main verification system, REGOs (Renewable Energy Guarantees of Origin), it may be time for such labels to be banned altogether.
The Paradox of The Green Kettle
The truth is that when you switch on your kettle you are causing the same amount of greenhouse gas emissions as your neighbour’s kettle or those in the next town or those used at the local school or those used in local cafes/businesses, even if they are on a “gold standard” eco/green/renewable energy tariff (unless they have their own solar panels, more of which later).
A 2025 study noted that being on a green tariff can lead to a “rebound effect,” with roughly 30% of consumers on green tariffs admitting to feeling less guilty about their energy use. So a “green” label can make some consumers less careful about energy efficiency leading to an increase in total carbon emissions.
Muddying the waters
The analogy that I often use is would you pay extra on your water bill if your water supplier said they were giving you pure, natural, untreated mineral water from every tap in your house, justified by saying that an equivalent amount of pure, natural mineral water drains into one of their reservoirs. You get is the same tap water you have always had but have just paid more for it.
REGOs: Green Energy on Paper Only
So how come many organisations claim they have reduced their impact on the plant by changing their electricity (and even more bizarrely their gas) to a green tariff?
REGO (Renewable Energy Guarantees of Origin) Certificates are the primary reason green tariffs often fail to reduce carbon. According to Cornwall Insight (August 2025), the UK is witnessing a “REGO Reckoning.” These certificates, which verify that a unit of power was generated by renewables, can be “unbundled” and sold separately from the actual electricity.
- The Shell Game: A supplier can buy “brown” electricity from a gas-fired power station and then buy cheap REGO certificates from a wind farm elsewhere to “match” it.
- The 2026 Price Collapse: Recent market data shows that REGO prices have plummeted from peaks of over £15/MWh in 2023 to less than £1/MWh in early 2026 due to oversupply and shifting corporate strategies. This allows suppliers to “green” a standard tariff for pennies without contributing to new renewable projects.
- The Temporal Chasm: A report from the Energy Institute (2025) highlights that REGOs only require annual matching. This means suppliers can stockpile cheap solar certificates from a sunny July to “offset” the gas-powered electricity you use on a windless night in January.
Is your extra money building anything new?
The goal of a green energy consumer is to drive the transition—a concept known as additionality. This means your purchase should lead to the construction of new renewable capacity. Most green tariffs fail this test. Because they rely on secondary markets for certificates from existing wind farms, your bill doesn’t provide the long-term financial certainty developers need for new projects.
How to Be a Truly Conscious Consumer in 2026
If the standard “100% green” label isn’t enough, how can you ensure your money makes a difference? There are some suppliers that use a different approach and there is a third way.
- Look for PPAs (Power Purchase Agreements): Some suppliers (like Good Energy and Ecotricity) bypass the REGO market by signing long-term contracts directly with renewable generators.
- Demand Transparency: Following pressure from consumer groups, Ofgem is increasingly reviewing “greenwashing” in energy products. Look for suppliers that provide half-hourly data on their actual fuel mix versus customer demand. As a consumer or business, don’t settle for a badge. Ask your supplier: “Do you buy unbundled REGOs, or do you invest directly in the UK’s renewable infrastructure?”
But the third way is to save money, buy the cheapest electricity and use the savings to reduce your own electricity use. This will lead to more savings, which can then be invested directly into on-site or off-site renewable electricity generation. The greenest electricity is the electricity you don’t use.
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References:
- Cornwall Insight (2025): “The Rise and Fall of REGO Prices”
- Energy Institute (2025): “UK suppliers’ renewable energy claims are built on a 20-year-old loophole”
- The Guardian (August 2025): “Fewer green energy tariffs offered as British households opt for cheaper deals”
- GOV.UK (November 2025): “What does the Autumn Budget mean for your energy bills?”
- Ofgem (January 2026): “Energy Price Cap Explained and Future Policy Charges”