Green business energy UK: renewable tariffs, REGOs and what SMEs should check (October 2026)

Last updated: Thursday 8 October 2026 (Europe/London).
Next update: when HMRC’s Climate Change Levy rates change on 1 April 2027 or Ofgem changes REGO rules.
By: Switch Editorial Team, Switch Squid Ltd

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As of 8 October 2026, a green business electricity tariff usually means your supplier matches the electricity you use with Renewable Energy Guarantees of Origin (REGOs), certificates that Ofgem issues at one per megawatt hour of renewable output. A green tariff does not remove the Climate Change Levy: a business using 20,000 kWh of electricity a year still pays about £160.20 in levy at HMRC’s main rate of 0.801p per kWh from 1 April 2026. SwitchSquid explains what green business energy really buys you, the evidence to ask for and how to compare quotes; we may be paid by suppliers if you take a contract through our form, and we tell you how before you agree to anything.

Sources: Ofgem — Renewable Energy Guarantees of Origin, HMRC — Climate Change Levy rates, Ofgem — Climate Change Levy exemption and Ofgem — energy advice for businesses.

What makes a business energy tariff green

Electricity from the grid is a mix of sources, and the electrons reaching your premises are the same whichever supplier you choose. A green tariff works on paper: your supplier buys or produces enough renewable electricity, or the certificates that prove it, to match what you use. For electricity, the proof in Great Britain is usually a REGO.

Suppliers describe this in different ways, such as “100% renewable”, “renewable-backed” or “green”. The words matter less than the evidence. A tariff that is fully matched with REGOs for every kilowatt hour you use is a different product from one that only promises a renewable share across the supplier’s whole customer base.

For gas, the picture is different. Most business gas is natural gas, so “green gas” offers usually rely on carbon offsetting or certificates for a share of biomethane. Ask exactly what proportion is covered and by which scheme before you treat a gas contract as green.

How REGO certificates work

Ofgem runs the REGO scheme in Great Britain on behalf of the Department for Energy Security and Net Zero, and in Northern Ireland for the Utility Regulator. Renewable generators receive one REGO certificate for each megawatt hour of eligible output. Suppliers then use those certificates to show how much renewable electricity they have supplied.

The main use of REGOs is Fuel Mix Disclosure. Licensed electricity suppliers must tell existing and potential customers the mix of fuels used to generate the electricity they supply: coal, gas, nuclear, renewable and other. Asking a supplier for its latest fuel mix, and for the share of your contract backed by REGOs, is the quickest way to test a green claim.

Two rules have changed in recent years. Ofgem says the EU stopped recognising UK REGOs from 1 January 2021, and from the disclosure period starting 1 April 2023, EU Guarantees of Origin are no longer recognised for fuel mix disclosure in Great Britain. If a supplier’s green claim relies on certificates from abroad, ask how it is reported now.

Green business energy options compared (checked 8 October 2026)

Option	How it works	Evidence to ask for	Effect on cost	Best for
REGO-backed renewable electricity tariff	Supplier matches your usage with REGO certificates	Share of your usage matched, and the supplier’s fuel mix disclosure	Set by each supplier; compare the full contract cost	Most small and medium businesses
Standard tariff from a supplier with a high renewable mix	No contract-specific matching; you buy the supplier’s overall mix	Latest fuel mix disclosure	Priced like any other quote	Businesses that want a simple contract
On-site generation, such as rooftop solar	You generate part of your own electricity	Installer quote and expected yearly output	Upfront cost; lower grid usage	Owners of suitable premises with daytime usage
Green gas or offset gas	Certificates for some biomethane, or carbon offsets	Proportion covered and scheme used	Set by each supplier	Businesses that want to address gas emissions too

No option in this table removes the Climate Change Levy on electricity or gas supplied to a business. Prices for every option depend on your meter, usage, contract length and credit check, so the only reliable comparison is a set of quotes for your own premises.

Does green electricity avoid the Climate Change Levy?

No. Renewable electricity used to be exempt from the Climate Change Levy, but the exemption was removed for electricity generated on or after 1 August 2015. Today, business electricity pays the levy whether it is green or not, at HMRC’s main rate of 0.801p per kWh from 1 April 2026, rising to 0.827p from 1 April 2027.

That means a business using 20,000 kWh of electricity a year pays about £160.20 in levy at the current rate, and about £165.40 at the April 2027 rate. Gas has the same main rates. Businesses with a climate change agreement can get a large percentage discount, and HMRC does not charge the levy on supplies to domestic users or charities for non-business use. Our Climate Change Levy guide covers the reliefs.

Questions to ask before you sign a green contract

1. What share of my electricity is matched with REGOs? Ask for the percentage for your contract, not just the supplier’s overall mix.
2. Can you show the latest fuel mix disclosure? Every licensed electricity supplier must publish one.
3. Is the green element fixed for the whole contract? Check that the renewable share cannot be reduced part way through.
4. Does gas count? If you also buy gas, ask whether any green claim covers it and how.
5. What is the full contract cost? Compare unit rates, standing charges, contract length and any deposit, as you would with any quote.
6. How is the quote paid for? If someone arranges the quote for you, ask how they are paid. Our broker fees guide explains what to look for.

When to switch to a green business tariff

The best time to change is when your current contract is coming to an end, because leaving early can mean exit fees. Check your renewal window and notice period first; our contract end date guide explains how. If you are already out of contract, you may be on higher rates and can usually move sooner.

Gather your meter numbers, recent bills and yearly usage before you ask for quotes. That lets suppliers price your exact meter and makes it easier to compare green and standard tariffs side by side. Our business energy quotes guide walks through what to prepare.

Fit summary

• Good for REGO-backed tariffs: small and medium businesses that want a credible, simple way to buy renewable electricity and report it.
• Good for on-site solar: businesses that own or have long leases on suitable premises and use most electricity in daylight hours.
• Consider a standard tariff: if the green option costs more than you can justify and your supplier’s overall mix already suits you.
• Consider asking about gas separately: if most of your emissions come from heating rather than electricity.

Important conditions

• This guide covers business premises and non-domestic meters only.
• A green tariff does not change the electricity that physically reaches your premises; it changes what your supplier matches on your behalf.
• The Climate Change Levy applies to business electricity and gas whether or not the supply is green.
• Each supplier sets its own prices, credit checks and contract terms, so quotes vary.
• Levy figures use HMRC’s main rates from 1 April 2026 and 1 April 2027 and exclude VAT.

Final decision card

Want renewable electricity you can evidence? Ask for a REGO-backed tariff and the share of your usage it covers.
Want the lowest total cost? Compare green and standard quotes for the same meter and contract length.
Planning the budget? Include the Climate Change Levy, about £160.20 on 20,000 kWh a year at the current rate.

FAQ

What is green business energy?

Green business energy is a contract where your supplier matches the electricity you use with renewable generation, usually evidenced by REGO certificates. Some suppliers also offer gas with offsets or biomethane certificates. The electricity reaching your premises is the same grid mix; the difference is what your supplier buys and reports.

What is a REGO certificate?

A Renewable Energy Guarantee of Origin is a certificate Ofgem issues to renewable generators for each megawatt hour of eligible output. Suppliers use REGOs to show how much of the electricity they supply comes from renewable sources. They are the main evidence behind most green electricity tariffs in Great Britain.

Is green business electricity more expensive?

Not always. Prices depend on the supplier, your meter, usage and contract length, and some green tariffs are priced close to standard ones. The fair test is to compare quotes for the same meter and term side by side.

Do I still pay the Climate Change Levy on a green tariff?

Yes. The levy exemption for renewable electricity was removed for electricity generated on or after 1 August 2015. Business electricity now pays the main rate of 0.801p per kWh from 1 April 2026, whatever its source.

How can I check a supplier’s green claim?

Ask for the supplier’s latest fuel mix disclosure, which licensed electricity suppliers must provide. Then ask what share of your own contract is matched with REGOs and whether that share is fixed for the whole term. Get the answers in writing.

Can a small business get a green energy contract?

Yes. Many suppliers offer renewable electricity to small and medium businesses on standard contract lengths. Have your meter numbers and yearly usage ready so suppliers can quote for your exact premises.