TL;DR:

  • Most “green” business energy tariffs are backed by REGOs — certificates that don’t guarantee the electrons you use were renewable
  • Direct Power Purchase Agreements (PPAs) offer genuinely additive renewable supply, but typically require 50,000+ kWh annual consumption
  • Aggregated PPAs and sleeved deals are making direct renewable procurement accessible to smaller businesses from 2025–2026

If you’re a UK small business owner trying to make your energy supply genuinely green — not just paperwork-green — the current landscape is more complicated than it looks. Most supplier “green tariffs” are backed by Renewable Energy Guarantees of Origin (REGOs), certificates that confirm renewable electricity was generated somewhere in the UK grid. What they don’t confirm is that the actual electrons flowing into your premises came from a solar farm or wind turbine.

That distinction matters more to some businesses than others. If you’re making a sustainability commitment to customers or working toward a Net Zero target, understanding what your green tariff actually represents is the starting point.

The REGO System: What It Does and Doesn’t Mean

REGOs are issued by Ofgem to renewable generators for each megawatt-hour produced. Suppliers buy these certificates and retire them to back green tariff products. When your supplier says your electricity is “100% renewable,” they mean they’ve retired enough REGOs to match your consumption.

The problem is that REGO prices are very low — typically £1–3 per MWh — which means any energy supplier can make almost any tariff look green at minimal cost. The certificates are often purchased in bulk from large hydro or wind generators, not necessarily matched to when and where you’re consuming power.

This isn’t fraud — it’s the design of the system. But for businesses that want additionality (funding new renewable capacity) or time-matched generation (consuming renewable power when renewables are actually generating), standard green tariffs don’t deliver either.

Power Purchase Agreements: The Direct Alternative

A Power Purchase Agreement (PPA) is a contract directly with a renewable generator (or a developer/aggregator) that gives you the output of a specific project at a fixed or indexed price over a defined term — typically 5–15 years.

PPAs offer several advantages over standard green tariffs:

  • Price certainty: fixed-rate PPAs lock in your per-unit price for the contract term, hedging against wholesale price volatility
  • Additionality: many PPA structures specifically fund new generation capacity rather than buying certificates from existing assets
  • Traceability: you can typically identify which specific project your power comes from

The traditional obstacle for small businesses: generators and developers prefer large, creditworthy counterparties. A 200kW annual consumption business (a small office or retail unit) isn’t interesting to a wind farm operator. Historically, direct PPAs have been accessible only to large energy users (typically 500,000+ kWh per year or higher).

Aggregated and Sleeved PPAs for Smaller Businesses

From 2025 onward, aggregated PPA structures have brought direct renewable procurement within reach of significantly smaller businesses.

Aggregated PPAs pool the demand of multiple small businesses so that the combined volume is large enough to contract with a generator. Your individual consumption is too small to interest a wind farm directly; a portfolio of 50 similar businesses, aggregated by a broker or platform, is not.

Sleeved PPAs use a licensed supply company as an intermediary — the generator sells power to the supplier under a PPA, and the supplier “sleeves” that supply through to your contract. You get the economic and environmental characteristics of the PPA without the legal complexity of contracting directly with a generator.

Providers operating in this space for UK SMEs include:

  • Squeaky — focuses on PPAs for businesses with lower consumption floors than traditional brokers
  • Power Shout — aggregated PPA broker for smaller commercial users
  • Beond (part of the Limejump group) — time-matched renewable supply with half-hourly granularity
  • Opus Energy’s green product range — sleeved PPA options for commercial customers

Minimum consumption requirements vary by provider and product, but from 2025 some products are accessible to businesses consuming from 50,000 kWh per year upward.

What to Compare When Choosing

When evaluating green energy options, the questions to ask your supplier or broker are:

On the green credentials:

  • What certificates back this tariff? (REGO, Guarantee of Origin, or direct PPA)
  • Which specific projects are certificates sourced from?
  • Is the power time-matched to generation (half-hourly matching)?
  • Does this funding support new renewable capacity (additionality)?

On the commercial terms:

  • Fixed or indexed price? If indexed, indexed to what?
  • Contract term and break clauses?
  • What happens at the end of the term — automatic rollover?
  • Are there termination fees if you move premises or change your consumption significantly?

On supplier reliability:

  • Is the supplier directly licensed by Ofgem, or do they use a licensed intermediary?
  • What’s their financial stability track record? (The SME energy market has had notable supplier failures.)

On-Site Generation as an Alternative

For businesses that own their premises, installing solar on the roof sidesteps the tariff debate entirely. Generation you use directly offsets grid purchases at retail price — effectively the best “green tariff” rate available. Surplus generation can be sold back via the Smart Export Guarantee.

For leasehold businesses, emerging options include shared generation schemes, plug-in solar for low-power applications, and group purchasing arrangements through trade associations or landlord-tenant energy agreements.

The Simplest First Step

If you’re not ready to evaluate PPAs, the minimum useful action is to check your current green tariff against the Ofgem fuel mix disclosure data. Every licensed supplier publishes their actual fuel mix annually. If your “100% renewable” supplier’s fuel mix shows significant gas or nuclear in the disclosure, the green claim is being supported purely by REGO retirement rather than physical renewable supply — a starting point for a more informed conversation with your broker or supplier.