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Green Energy

MoneySupermarket is always looking at ways to save you money, be that through savings on insurance, loans, mortgages or even holidays. However, when it comes to making savings on your energy bills then an emphasis is placed upon saving the planet as well as saving the pounds.

Many of us are now becoming more environmentally aware and appreciate the importance of utilising renewable energy sources and reducing our carbon footprint. And the urgent need to reduce our carbon footprint is put into sharp focus when you consider that, with just over 60million inhabitants, the UK is home to less than 1% of the world's population but is responsible for over 2% of the planet's CO2 emissions.

And although the UK has a wealth of energy resources to draw upon, the depletion of domestic fossil fuel reserves coupled with the projected increase in energy demand means that our energy supply is at risk.

In order to combat this problem, the government has set energy targets to aid the development of renewable energy sources as well as carbon capture and storage, all of which will help to reduce the production of harmful greenhouse gases.

For instance, the 2009 Renewable Energy Directive has set a target for 15% of the UK's energy consumption to come from renewable sources by 2020, which may not sound like much until you consider that in 2009 this stood at just 3%.

Another initiative aimed at reducing greenhouse gas emissions is the Carbon Emissions Reduction Target (CERT). This requires all suppliers of domestic gas and electricity with a customer base of over 250,000 to promote an uptake of low carbon energy solutions amongst customers to reduce their carbon footprint by limiting the amount of CO2 they emit.

And if you're unsure what a 'carbon footprint' is, it is a way of measuring the amount of CO2 emissions that are produced by an individual, organisation or even a nation when going about their business during a certain time frame.

The government is also planning to begin a mass roll-out of smart meters in 2014, the idea being that every UK home and business will have one installed by 2019. The government is keen to push smart meters as a way for us all to monitor our energy usage and find areas where we can reduce consumption and save money.

So what exactly is green energy?

Green energy comes from natural resources and differs from fossil fuels in that it is naturally replenished and so will never run out. There are four main types of renewable energy, also known as green energy, which are; solar, wind, hydroelectric and biomass.

Solar power is that which converts the sun's energy into electricity and heat. Energy is harnessed via solar panels that capture the sun's energy using photovoltaic cells which then convert sunlight into electricity. This is becoming an increasingly popular way to generate domestic energy and can be used to both generate electricity and heat water.

Electricity generated from wind energy is done so through wind turbines and the UK's offshore and inland wind farms are now the largest renewable energy resource in Europe. In addition, 'microwind' or 'small wind' turbines can be fitted to domestic or business premises to generate electricity to power light and electrical appliances.

Hydroelectric energy harnesses the power generated by tides and flowing water and, in addition to large-scale hydroelectric plants, anyone that lives near a body of flowing water can install a smaller system that can produce enough energy to power domestic lighting and electrical appliances.

Biomass energy is generated through the burning of natural materials and although this sounds as unsustainable as the burning of fossil fuels, biomass energy comes from continuously replenished crops which take carbon out of the atmosphere while growing then return it as it is burned for fuel, making it a sustainable, carbon neutral energy source.

In addition to harnessing the power of the sun, geothermal energy is a green energy source that taps into the internal heat generated by the Earth. This energy is made up of around 20% of matter from the original formation of the planet and the remaining 80% from the radioactive decay of minerals.

How will green energy help the environment?

Global warming is a constant threat to our environment and the production of electricity is thought to be the biggest contributory factor in the release of emissions that cause climate change. In addition, the burning of fossil fuels, such as coal, oil and natural gas, produces large volumes of CO2, the primary gas responsible for global warming.

Nuclear power is considered to be a 'clean' alternative to fossil fuels yet this is often met with protests from campaigners who argue that nuclear reactor by-products are harmful to the environment and radioactive waste may not degrade for thousands of years.
However, renewable energy has no by-products and there is an infinite supply of solar power, wind and water. Furthermore, this type of energy produces very little waste.

So in utilising the green energy that is at our disposal we can still produce the power we need but lessen the impact upon our planet. We also need to reduce the reliance we have on fossil fuels as they will eventually run out.

Can green energy also help the economy?

There is a good chance that by harnessing the energy provided by our natural surroundings can not only provide a boost for the environment but the economy too. In addition to, hopefully, saving us money on our energy bills and thereby giving us more disposable income, an investment in renewable energy sources can also help to create jobs.

This is because, in the main, renewable energy investment is spent on materials and labour used to build and maintain the facilities rather than on expensive imports.

What are energy companies doing to help?

As well as providing smart meters, many energy companies now offer 'green tariffs', which generally take on two forms; a green power supply or a green fund.

If you opt for a green power supply then for every unit of electricity you use, an identical amount of green energy is produced. A green fund, on the other hand, will cost you extra each month but the energy company then invests this into renewable energy projects.

You can switch to a green energy tariff without any disruption to your normal supply and can pay by direct debit, which can get you a further discount on your energy bills.

Let's take a look at some of the companies that offer nothing but green energy tariffs...

  • Good Energy supplies 100% renewable electricity and will match every unit of energy used with one generated from a renewable energy source.
  • Green Energy UK offers two tariffs; Pale Green and Deep Green. Pale Green is a low-carbon tariff that harnesses and re-uses the heat generated when power plants make electricity while Deep Green uses 100% renewable sources such as water, wind, solar power and organic waste material.
  • Green Energy 100 will buy one unit of green electricity for every unit of electricity bought by a consumer and 50% of profits are invested into green electricity generation.
  • Ecotricity generates 40% of the energy it provides from its 16 wind farms and as the company's customer base grows so it promises to build more windmills.

In addition, some of the big six energy providers also offer green energy tariffs if you are prepared to pay a small premium on your electricity bills.

For instance, EDF Energy will match any customer contributions and use the money raised to help support renewable energy projects across the UK.  Scottish Power offers a similar deal as its 'Green Energy Fund' invests up to £15.75 per customer per year into green energy schemes and then matches this donation.

E.ON offers GreenPlan which guarantees to match every unit of electricity supplied to customers with one from a renewable energy source while npower offers the 'clean and green' service which supplies one unit of green energy for every unit of electricity you buy.

What if I can't afford a green energy tariff?

If you can't budget for the extra money needed to switch to a green energy tariff but want to ensure you're doing your bit for the planet then you can examine the mix of fuels used by the domestic energy suppliers and go with the most environmentally conscious provider.

From April 1, 2004, all energy suppliers have had to ensure that at least 4.9% of all energy provided comes from renewable sources. Unfortunately, this target has still not been met by some companies, a situation which has led to the underhanded practice of buying certificates from smaller companies who have either surpassed this figure or who only offer green tariffs.

But don't despair, as of October 1, 2005 electricity suppliers have had to provide information on CO2 emissions and any high-level nuclear waste that is produced so you can still carry out checks to see which providers are the most environmentally aware. And you can find out all of the information you will need by clicking on the following link: http://www.electricityinfo.org/suppliers.php

Compare gas and electricity prices to make savings

If you really do want to get yourself on a green energy tariff but can't afford the extra contribution on top of your monthly gas and electricity bills, then it may be a good idea to see if switching provider could save you money.

Any extra money you then have at the end of  each month could be put towards helping the environment via a green energy tariff.

Any extra money you then have at the end of each month could be put towards helping the environment via a green energy tariff.Any extra money you then have at the end of each month could be put towards helping the environment via a green energy tariff.

The simplest way to compare the deals offered by energy companies is to use MoneySupermarket's comparison tool. Here you can instantly compare quotes from every UK energy supplier and, if another provider offers a cheaper deal, you can apply to switch online, saving phone calls, paperwork and postage costs.

You can also use MoneySupermarket to compare green energy deals and also take a look at some energy saving tips to see if you can save yourself even more money.

Is it true I can make money from green energy?

Yes, you can make money from green energy thanks to Feed-in tariffs, a government initiative that aims to encourage householders and small businesses to generate and use their own electricity. The most popular way of going about this is to install solar panels on the roof of your house or business premises.

Under the scheme you will be guaranteed a minimum payment for all of the electricity you generate, via solar panels for instance, and this even includes the energy that you use yourself. Any energy you generate that your household does not use is then exported to the national grid and you will receive a separate payment for this as well.

These payments are split into two parts; generation and export.

Generation is the payment you receive for every unit of electricity you generate, even if you use it yourself. The rate of payment that you receive is dependent upon the technology as well its capacity, that is, its maximum possible hourly output.

Anyone that had solar panels fitted prior to December 12, 2011 should benefit from a Generation tariff payment of 43.3p per kWh but those that had panels installed and registered after this date will get just 21p per kWh after the government slashed the subsidy.

For many this means that instead of the solar panels taking around 10 years to pay for themselves, they will now take nearer to 20 years.

The good news is that the Export payment, that is, the money you receive for the excess units you produce that go back into the national grid, has remained unchanged and still stands at 3.1p per kWh.

For more information see our page on feed in tariffs.

And if you don't fancy fitting solar panels to your roof or having a wind turbine in your garden then you can install a wood-fuelled or biomass heating system, ground or air source heat pumps to heat radiators and hot water or, if you live near water you could produce electricity via a small hydroelectricity system.

What to do next

Now you are clued up on what renewable energy is, what the energy companies are doing to harness the natural resources at our disposal and what sort of green energy tariffs are on offer, you can make an informed choice and decide which is the best green option for you.

Use our comparison tool to find the best energy tariff, green or otherwise, to suit your needs.