Blog Post

Green Energy Tariffs rise in importance for consumers, cost of energy bills remains top concern

Richard Simmonds • Sep 14, 2020

The number of consumers choosing a new energy supplier solely for their green energy tariffs was shown to have increased strongly from the first quarter of 2019 to the second quarter of 2020.

Increasing importance

With the constant barrage of climate change scare stories and the bizarre and highly disruptive activities of the likes of Extinction Rebellion, its little wonder that the issue of ‘green energy’ has been pushed to the fore of many people’s minds.


While making people more environmentally friendly aware can only be a good thing energy suppliers should see this changing mindset as an opportunity to attract more customers.


According to Ofgem’s Household Consumer Perception of the energy market survey the importance of green energy tariffs for consumer choice increased from just 9% in 2019 to 19% this year, even with the Covid-19 pandemic and lockdown.

UK and Europe leading the way

Research from Oxford University has shown that the UK and European energy suppliers are leading the drive for green energy tariffs with many firms based in the region being most likely to have invested more into low carbon energy, ‘green’ technology and taking action to shut down older fossil fuel producing power plants.


The study showed that British suppliers are making the biggest strides when it comes to renewable energy. For example, the UK has recorded a record run of coal-free energy generation and this year the UK’s electricity came from record amounts of wind and solar generation.

Losing the Global Green push

Despite more UK and European energy suppliers pushing for green energy and introducing more green tariffs the Oxford study also showed that just 10% of the world’s energy suppliers are actively investing in clean energy alternatives.


The report focused on 3,000 energy suppliers from across the world and discovered that 60% continued to invest heavily in fossil fuels.


With most energy suppliers across the world not bothering to invest in non-fossil fuel alternatives, especially in Asia and the Americas the positive moves by the UK and Europe are effectively cancelled out when it comes to a global scale.


“Utilities are still dominating the global fossil fuel business. And I’m also finding that quite a significant share of the fossil fuel-based capacity owned by utilities has been added in the last decade, meaning that these are quite new assets. But in order for us to achieve the Paris climate agreement goals, they either need to be retired early, or will need carbon capture and storage because otherwise they’re still here to stay for decades,” said the reports lead researcher Galina Alova.


Benefits for energy suppliers

There are a few key benefits of offering green tariffs for energy suppliers, the chief of which includes attracting the growing number of environmentally savvy consumers.


As well as showing that they’re doing their part in the drive for a cleaner environment the introduction of green tariffs is necessary to compete in an ever-competitive market.


Smaller challenger energy suppliers can have a huge advantage over the bigger players when it comes to offering green tariffs as they can often offer cheaper tariffs that are more appealing to consumers. Recent reviews of the market have shown that some challenger energy suppliers are currently hundreds of pounds cheaper than those offered by the Big Six.


Cost of Energy Bills remains top reason for switching supplier

Unsurprisingly, the Ofgem report shows that the majority of consumers place the cost of energy bills as their number one factor when it comes to choosing a new energy supplier.


55% of those surveyed said that they switched supplier due to their new supplier offering a better priced tariff and 48% said that they believed they were now on the best priced tariff. 

Further Reading

2020 Renewable Energy Market Trends


Is ‘Green Energy’ really good for the environment?


Energy supplier Customer Satisfaction was high throughout Covid-19 lockdown says new Ofgem report


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