What is green energy?

Green energy is better for the environment than fossil fuels, and could help you save money on your energy bill too. Here is everything you need to know about green energy.

Green energy wind turbines

Last updated: 23 October 2020

In this guide you’ll find answers to questions including:

  • What is renewable energy?

  • How much does green energy cost?

  • How can you find a green energy supplier?

  • Is a green energy tariff worth it?

What is renewable energy?

Green energy is generated from natural resources like sunlight, wind and water. Unlike traditional fuel sources, these are renewable, so they will never run out, and they cause less pollution. You can sign up to a green energy deal with a supplier, or you can install renewable technology to create your own power supply.

You can compare tariffs using our energy price comparison tool. This includes a filter for ‘green plans’ that shows renewable energy tariffs, which makes it easier if you want to switch energy supplier to one that supplies green power.

Can you buy green gas?

Yes, but there aren’t many suppliers and if you compare energy deals, you’ll find that 100% green gas is often more expensive than standard gas. A lot of green tariffs use carbon offsetting instead to reduce the carbon footprint of their subscribers’ gas consumption. 

How is green energy made?

The main ways of generating renewable energy are wind and solar power. You can install equipment at home to generate your own green power supply:

  • Solar power: panels fitted to your home use light from the sun to create electricity or heat water. They work best on south-facing roofs which get the most sunlight. Solar panels can cost up to £9,000, so it may take time for you to save on your energy bill.

  • Wind energy: You can install a small wind turbine at your home to generate your own electricity. They work well in the UK because of the windy weather, but they cost upwards of £3,000 and need maintenance checks every few years.

There are lots of other ways to create renewable energy, and many are used on a larger scale, like:

  • Hydroelectricity which converts energy from the movement of water, like rivers or streams

  • Biomass like crops, manure, or wood which can be burned for heat

  • Geothermal uses heat from the earth's core to produce electricity or heat

  • Biodiesel fuel which is made from natural oils and can be used in cars

What is microgeneration?

Microgeneration is where you install equipment or technology that lets you generate your own energy at home, rather than buying all of your gas and electricity from a supplier.

You can even sell the energy you produce back to certain suppliers, so you can get paid for the gas or electricity you generate (see How to make money from renewable energy below).

How much does green energy cost?

If you use an energy price comparison tool, you’ll see that green energy tariffs tend to be more expensive than standard energy, but many specialist suppliers offer competitive deals if you are a new customer looking to switch.

If you install renewable technology in your home, you may be able to benefit from a government grant. You could also get money for the energy you generate from green energy suppliers.

Domestic Renewable Heat Incentive (RHI)

The Renewable Heat Incentive programme is a government scheme that enables you to get money towards the cost of heating your home if you use:

  • A biomass boiler

  • Solar water heating

  • Some types of heat pump

You need to live in England, Scotland or Wales, and you must be a homeowner or a private landlord to claim.

How to make money from renewable energy

You can apply to get payments from your energy company if you generate your own green power with solar panels or a wind turbine. To do this, you’ll need to sign up for a feed-in tariff (FIT).

If your application is accepted, you get a set amount for each unit of electricity you generate depending on:

  • The size of your system

  • What you have installed

  • When it was installed

  • How energy efficient your home is

How can you find a green energy supplier?

Most of the big six energy suppliers now offer some kind of green energy tariff, but while the electricity on most of these plans comes entirely from renewable energy sources, it’s a different picture for gas. Of the big six, only British Gas provides any renewable gas – just 6% if you switch to one of its renewable energy plans - but it does offset the carbon impact of the other 94%  by investing in carbon-emission reduction projects in the developing world. This is similar to the systems that green energy companies like Bulb and Ecotricity use to provide carbon-neutral gas. 

There are lots of green tariffs available from smaller companies, too, and these are worth investigating if you want to switch energy supplier, not only for the potential price savings but because they can provide alternate means of delivery and interesting bundles. Ecotricity, for example, offers a green pay-as-you-go (PAYG) tariff for use with a prepayment meter, while its Fully Charged Bundle plan is aimed at owners of electric vehicles with half-price charging on the Electric Highway and a discount on home electric vehicle charger. 

You can compare energy tariffs in your area with our price comparison tool by entering your postcode and then filtering green and environmental tariffs.

Are green tariffs 100% green?

Not all green tariffs use 100% renewable energy, but most green suppliers get a higher proportion of their power from renewable sources. Usually, 100% of electricity is generated from renewable sources, but green sources for gas are less common. 

Look out for the Ofgem Green Energy Label Scheme, which shows whether renewable energy suppliers are going above the basic requirement to source green power.

Is a green energy tariff worth it?

If it’s time to switch energy plans because you’re at the end of your contract, you could save money with a green energy tariff and support the development of renewable energy sources at the same time.

Installing your own equipment to generate green energy can be expensive and it may take time for you to see any savings, so only do this if you can afford the initial cost and are likely to remain in your home long enough to reap the benefits.