Green business energy tariffs: All you need to know

One of the easiest ways to make your business greener, is to switch your energy to a green or renewable tariff. In this blog we look at how green energy works and the benefits of switching to a green energy tariff.

Power Purchase Agreements

Power Purchase Agreements (PPA) are a funded scheme where your renewable energy project will be fully funded by an investor.

The investor will recover their investment by selling back to you the energy you generate at a pre-agreed price, which will deliver a saving on your current electrical energy supply contract.

The benefit of a PPA is that you can enjoy reduced low carbon electricity, with no maintenance costs and no concern about the operation of the system. At the end of the contracted term, you choose to purchase the asset, extend the agreement, or have the asset removed.

What are green business energy tariffs?

Multiple energy suppliers offer green business energy tariffs. These tariffs mean some or all of the electricity you use is matched with the amount which the supplier buys from renewable energy generators.

Your business receives the same gas and electricity through the same pipes and wires as if you were on a standard tariff – the only difference is your money is being spent on feeding ‘green’ electricity into the national supply.

How does green energy work?

Green energy is generated from natural resources, such as sunlight, wind or water. It often comes from renewable energy sources.

The key with these energy resources is they don’t harm the environment. In order to be deemed green energy, a resource cannot produce pollution, such as greenhouse gases.

However, not all renewable sources are green. For example, burning organic material from sustainable forests may be renewable, but it is not necessarily green, due to the CO2 produced by the burning process itself.

Green energy sources tend to be naturally replenished, as opposed to fossil fuel sources like natural gas or coal, which can take millions of years to develop.

Types of Green Energy

The six most common forms are as follows:

Solar Power

Produced using photovoltaic cells, solar power captures sunlight and turns it into electricity.

Wind Power

More suited to higher altitude sites, wind energy uses air flow to push turbines which generates electricity.

Hydropower

Aka hydroelectric power uses
the flow of water in rivers,
streams, dams or elsewhere to
produce energy.

Geothermal Energy

This type uses thermal energy, which has been stored just under the earth’s crust, to generate electricity.

Biomass

Power plants use wood waste, sawdust and combustible organic agricultural waste to create energy.

Biofuel

Rather than burning biomass, these organic materials can be transformed into fuel such as ethanol and biodiesel.


What are the benefits?

  • Stable prices: Green energy production is often local and not as affected by geopolitical crises, price spikes or supply chain disruptions, meaning more stable prices.
  • Job creation: Economic benefits also include job creation when building the facilities. Renewable energy saw the creation of 12 million jobs in 2020, with this number set to grow as we strive to meet targets such as net zero.
  • Global cost: Green energy presents a minimal cost solution for the energy requirements of many countries. This will continue to improve as costs fall, increasing the accessibility of green energy, especially in the developing world.
  • Kinder to the environment: Green energy replaces the negative effects on the environment caused by fossil fuels, and offers more environmentally-friendly alternatives. It’s also often renewable and clean, meaning no or few greenhouse gases are released. This is not only beneficial for the planet, but better for the health of people and animals.

Which suppliers offer green business energy tariffs?

The Big Six (British Gas, EDF Energy, E.ON, npower, Scottish Power and SSE) offer green business contracts. Eligibility may depend on your business size.

Additionally, there are some independent suppliers who provide renewable business energy tariffs, such as Engie, Drax, Ecotricity, Octopus Energy, and Total Gas & Power.

GAS can scour the market on your behalf to find which supplier offers the best deal for your business.

How can my business generate renewable energy?

If reducing your business’ carbon footprint is something of high importance to you, consider generating your own renewable energy.
The type of technology you adopt will depend on the size of your business, the location of your premises, and budget:

  • Solar PV panels: One of the most common types of renewable energy for businesses, they are simple to install and capture the sun’s energy using photovoltaic (PV) cells to convert into electricity. Cost – £5,000 to £8,000 for small scale systems.
  • Solar thermal energy: Sunlight heats water stored in a hot water tank. Like solar panels, solar water heating collectors tend to be simple to install on the roof or the side of your building. Cost – £3,000 to £6,000.
  • Wind power: Wind turbines use wind to generate electricity. A large amount of land is required to install this method and to ensure you are generating enough electricity for your business to run. Cost – £1,500 and £6,000 per kW (kilowatt), depending on the type of system. Roof-mounted turbines are cheaper to install but produce less energy.
  • Hydro-electric power: Water flows through a wheel or turbine to generate electricity. Cost – Anywhere from £1,000 to £100,000.
  • Biomass: Energy is generated by burning / fermenting organic material, like wood pellets, with a combined heat and power plant. Cost – dependent on boiler size and fuel type.

Is it worth switching to a renewable business energy tariff?

Switching your energy tariff would enable you to indirectly fund the production of renewable energy and help increase demand for renewable sources. The more businesses switch to green energy tariffs, the more renewable energy is fed back into the grid, and the country’s dependence on fossil fuels decreases.

With an increased number of suppliers claiming to possess green credentials, we recommend you assess their ethos, goals and actions – or contact GAS and we’ll take care of this for you.

To conclude, green business energy tariffs are an easy way to make your business greener and have a positive impact on the environment. They don’t cost extra than a standard tariff and, in some cases, could actually save you money. The energy source is unlimited and theoretically less sensitive to geopolitical crises.

Speak to us for a free, no-obligation chat about green energy business tariffs today.

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Paul JohnsonGroup Financial Director

Paul Johnson is very much a home-grown talent.

He joined Great Annual Savings Group in its infancy, fresh from a youth career as a professional footballer with Hartlepool United.  He quickly established a reputation within the business and aced all required accountancy qualifications in the space of four years to become the Group’s Management Accountant.

Several successful projects later, Paul was promoted to Head of Finance.  When the former FD left GAS, he took on the mantle of the business’ most senior finance professional; boasting a string of incredible achievements all under the age of 30.

Quote:

“I have witnessed phenomenal growth at the Group over the many years I’ve worked here and I’m looking forward to guiding the Group into an exciting new chapter.”

Interesting fact:

Paul made his professional debut for Hartlepool United against Bournemouth in the Football League.  Some say Danny Ings still resides in his pocket to this day.

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