Renewable energy for business

More businesses want their energy to come from renewable sources, whether to cut their carbon footprint, meet customer expectations or report progress to investors. But “green energy” can mean very different things, from a certificate-backed tariff to a 15-year contract with a wind farm. This guide explains the main options, what each one actually proves, and the rules to follow when you report or advertise it.

What is a renewable business energy tariff?

A renewable (or green) business electricity tariff is one where your supplier matches the electricity you use with electricity generated from renewable sources, usually evidenced by REGO certificates. The electricity reaching your premises comes from the same grid as everyone else’s. What changes is the renewable generation your supplier accounts for on your behalf.

Green tariffs can differ a lot in what sits behind them, so ask your supplier exactly how the tariff is backed before you sign.

What are REGOs and what do they prove?

A Renewable Energy Guarantee of Origin (REGO) is a certificate that Ofgem issues for each megawatt hour (MWh) of eligible renewable electricity generated in Great Britain and Northern Ireland.

Suppliers mainly use REGOs for Fuel Mix Disclosure. Every licensed electricity supplier has to tell its customers each year the mix of fuels (coal, gas, nuclear, renewable and other) used to generate the electricity it supplied. The disclosure covers April to March and must be published by 1 October. REGOs are the evidence for the renewable share. Since April 2023, EU Guarantees of Origin no longer count towards GB fuel mix disclosure.

REGOs have limits you should know about:

• They can be traded separately from the electricity they certify. A supplier can buy REGOs without buying power from the generator that produced them.
• They don’t necessarily mean new renewable generation. The government’s 2026 review of corporate PPAs noted REGOs currently have low market value and give less demonstrable “additionality” (support for new projects) than a direct deal with a generator.

What does “100% renewable” actually mean?

When a supplier says a tariff is “100% renewable”, it should mean the supplier can show that renewable generation matches all the electricity you use. The Advertising Standards Authority says claims such as “100% renewable electricity” are acceptable if they can be substantiated. Ads mustn’t imply that renewable electricity is delivered directly to the customer, because it goes into the national grid.

Before choosing a 100% renewable tariff, it’s worth asking:

1. Is the tariff backed by REGOs, and for all of my usage?
2. Which technologies and generators do the REGOs come from?
3. Does the supplier buy power from those generators, or only the certificates?
4. Does the tariff support any new renewable projects?

There’s no right answer to each question. It depends on what you want the tariff to achieve and what you plan to say about it.

What is a power purchase agreement (PPA)?

A corporate power purchase agreement is a long-term contract to buy electricity directly from a generator, such as a wind or solar farm. The government describes three main types:

• Sleeved PPAs, the most common type in Great Britain. A supplier delivers the generator’s output to you through the grid as part of your supply contract.
• Private wire or on-site PPAs, where the generator is connected directly to your site. The government calls these the most cost-competitive, as they avoid network charges, but they’re hard to use at scale because of location and land constraints.
• Virtual or financial PPAs, which are more common in other countries.

PPAs often involve 10 to 15 year fixed or indexed pricing, much longer than a standard supply contract. Some bundle the electricity with the matching REGOs.

Can smaller businesses use a PPA? It’s difficult. The government’s July 2026 response found smaller buyers face strict credit requirements, minimum volumes, transaction costs and bespoke negotiation. It is looking at options such as credit support, demand aggregation and standard contract terms. For the public sector, the government’s next energy agreement, RM6390, expected to be awarded in December 2026, includes PPAs that let public bodies sleeve renewable electricity.

For how PPAs sit alongside fixed and flexible buying, see fixed vs flexible energy contracts.

Can your business generate its own renewable electricity?

Yes. You can install solar panels or other renewable generation on your own site, or host a generator owned by someone else under a private wire PPA. Electricity you generate and use yourself doesn’t need to be bought from a supplier.

If you export surplus electricity, you may be able to get paid for it through the Smart Export Guarantee (SEG). The SEG started on 1 January 2020 and covers installations in Great Britain of up to 5MW (50kW for micro-CHP), including solar PV, wind, hydro, anaerobic digestion and micro-CHP. Payments are based on export meter readings. Suppliers set their own rates and terms, so compare offers, but SEG rates must always be above zero.

How should you report renewable electricity in carbon reporting?

Who has to report under SECR?

Streamlined Energy and Carbon Reporting (SECR) applies to UK quoted companies, and to large unquoted companies and LLPs. An unquoted company is in scope if it meets at least two of these tests:

• more than 250 employees
• turnover of more than £36 million
• balance sheet total of more than £18 million

These thresholds are set in the SECR rules themselves. They are different from the general company size thresholds in the Companies Act, which rose to £54 million turnover and £27 million balance sheet for medium-sized companies from 6 April 2025.

A large unquoted company that used 40,000 kWh of energy or less in the UK during the year doesn’t have to disclose the information, as long as its report says why.

Unquoted companies in scope must report their UK energy use in kWh, the related greenhouse gas emissions from gas, transport fuel and purchased electricity, at least one intensity ratio, the methods used, and the main energy efficiency measures taken in the year.

Can you count your green tariff?

Government reporting guidance explains that if you’ve bought renewable electricity through a PPA or by buying REGOs, you can show a reduced emissions figure using a “market-based” approach. It recommends showing this alongside the standard “location-based” figure, which uses the grid average, and saying whether the renewable energy is additional, subsidised and supplied directly.

In practice, that means keeping your supplier’s evidence for the renewable electricity you’ve been supplied.

What are the rules on green claims for your business?

If you tell customers your business is powered by renewable energy, the claim has to be accurate.

The Competition and Markets Authority’s Green Claims Code sets out six principles. Environmental claims must:

1. be truthful and accurate
2. be clear and unambiguous
3. not omit or hide important relevant information
4. make fair and meaningful comparisons
5. consider the full life cycle of the product or service
6. be substantiated

The Code is aimed at claims to consumers, but the CMA urges businesses to apply the same standards to business-to-business claims, which are covered by the Business Protection from Misleading Marketing Regulations 2008.

The stakes are higher than they used to be. Since April 2025, the CMA has had direct powers to enforce consumer protection law, including fines of up to 10% of a company’s global turnover.

In practice:

• Say exactly what you mean, for example “our electricity is matched with REGO-backed renewable generation” rather than an unqualified “carbon neutral”.
• Don’t suggest the claim covers more than it does. A green electricity tariff doesn’t cover your gas, vehicles or supply chain.
• Keep the evidence, including your supplier’s confirmation and your tariff terms.

What about green gas?

Green gas works differently. One route is biomethane: gas produced by anaerobic digestion and injected into the gas grid. The government’s Green Gas Support Scheme pays new biomethane plants for the gas they inject, funded by a Green Gas Levy on licensed gas suppliers.

If a supplier offers a “green gas” or “carbon neutral gas” tariff, ask what backs the claim: biomethane, certificates, carbon offsets, or a mix.

How do you choose green business energy?

1. Decide what you want to achieve. A lower reported footprint, support for new generation, and price stability can point to different options.
2. Ask what backs the tariff. REGOs, which generators, and for how much of your usage.
3. Check the price and terms in the same way as any other business electricity quote. Green tariffs are still fixed or variable contracts with unit rates and standing charges, so compare them on total cost at your usage. Our unit rate vs standing charge guide shows how.
4. Think about the longer term. On-site generation or a PPA may suit larger users with suitable sites.
5. Keep records for your carbon reporting and any claims you make.

For the taxes that appear on business energy bills, including who can get a Climate Change Levy discount, see our Climate Change Levy guide. If you have several premises, our multi-site business energy guide explains how to manage contracts across them.

Frequently asked questions