Ofgem unveils plans for a green energy rating scheme

Ofgem has outlined plans to apply a ratings scheme to energy companies’ ‘green tariffs’.

The energy regulator and the Energy Savings Trust are jointly proposing a scheme that would give each tariff a star rating based on how eco-friendly it is.

Karen Darby, founder of SimplySwitch.com, the price comparison and switching service, comments: “At the moment, green energy tariffs are very difficult for the customer to understand. Energy companies have a wide range of measures in place that qualify them to advertise their tariff as ‘green’, some of which have a more positive effect on the environment than others. The ‘green issue’ is more of a ‘grey issue’ at present, so introducing a system to objectify the ‘greenness’ of each tariff will be an important step forward.

“According to research by SimplySwitch, less than 9 percent of households choose an electricity supplier based on environmental considerations. This could well be a reflection of how difficult green tariffs are to understand. An easy-to-understand key is exactly what consumers need and should help people to make a better-informed choice when it comes to renewable energy. At the moment, it’s very easy to compare energy tariffs based on price. Once the new rating scheme is in place, it should be equally easy to compare tariffs on environmental grounds.

“While this new scheme should make green energy more accessible to consumers, we would like to see more support from the Government. One of the key problems with green energy is that tariffs are rarely able to compete on price with the best ‘regular energy’ deals. It would be fantastic if the Government took steps to make green energy more affordable. Waiving VAT on the most eco-friendly tariffs would be an excellent way of achieving this.”