The Cost of Green Energy Tariffs
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Green energy is the newest energy craze, and it needs to be if we want to protect our planet from the effects of increased carbon production. But where exactly does green energy come from and will it be more expensive than your usual energy tariff? Read on to find out more.
What is a green energy tariff?
A green energy tariff means that your energy supplier purchases more electricity made with renewable sources on your behalf. It doesn’t mean that all of the electricity supplied to your home will be green, however, it does mean that your energy provider will be requiring more renewable energy and must source this from somewhere.
How do green energy tariffs work?
When electricity is generated, no matter whether it’s through the burning of fossil fuels (also known as brown energy) or via renewable sources such as solar panels, it all goes to the National Grid. Here, it is mixed together and then sent off to all different areas of the country to be used by homes and businesses. This means that there isn’t a set supply for green energy and another supply for brown energy.
However, as more and more people request green energy, the National Grid will be forced to create a higher percentage of renewable electricity. So, although some of the electricity used by you will be generated from fossil fuels or nuclear power, you can be assured that the grid will be generating more green energy. If everyone in the UK was on a green energy tariff, the National Grid would need to source all of their electricity from solar, wind and hydro. It is for this reason that being on a green energy tariff is so beneficial to the planet.
When you make the switch to a green tariff, your energy provider should let you know what percentage of your energy is green. If they don’t provide this information automatically, you can ask for it by law. Some tariffs advertise as 100 per cent renewable, so you know that every bit of electricity you use isn’t affecting the planet. Others might state that you’re using part green energy and part standard energy.
Is green energy more expensive?
It’s often thought that green energy is more expensive, because it certainly used to be in the past. It can be very costly to set up new solar and wind farms that generate electricity in a green way, and then there’s the cost of renting or purchasing the land that the panels or turbines are on. However, the cost to set up these farms has reduced in price. Historically, there weren’t very many solar panel manufacturers, making the technology unique and very expensive. But as the technology has become more accessible and improved over the years, these farms are now easier and cheaper to set up.
The more farms there are producing renewable energy, the cheaper green energy will become. Once the farms have produced enough electricity and have generated more profit than the cost of setting the site up, the price may come down again, making green energy cheaper once more. There’s already been a decrease in the cost of green energy in the last few years, and so you may see no price difference at all when switching to a green energy tariff.
Therefore, it does seem that green energy is becoming cheaper. This is particularly the case in the US, where electricity produced from renewable sources costs considerably less than fossil fuel-generated electricity.
How much does green energy cost?
The cost of green energy can depend on the size of your home or business, as well as your heating and hot water demands. However, gas and electricity have a set price per kWh you use. For instance, the average cost of gas per kWh is around four pence, whereas electricity is slightly more expensive at around 14 pence. In comparison, wind power costs around four pence, the same as gas, and solar power around eight pence. This means that your green energy tariff could actually cost less than your brown energy one.
But as with any tariff, this will depend on your supplier, as costs for energy can vary wildly. This is why it’s important to shop around instead of choosing the first tariff you find. You could save hundreds of pounds a year by comparing deals, so do take the time to do this.
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