Star rating scheme for green energy deals

Customers and businesses looking to reduce their carbon footprint will be able easily to compare the environmental credentials of green energy deals under proposals by energy regulator, Ofgem. Under Ofgem’s proposals all green tariffs would be awarded a rating ranging from 1-5 stars.

Under Ofgem’s proposals for revised guidelines the star rating scheme would apply to green tariffs offered to businesses as well as to domestic customers. The guidelines would also be expanded to cover low-carbon technologies like efficient Combined Heat and Power schemes.

Ofgem and the EST will be working with the energy industry and customer groups to develop their proposals, with the aim of delivering new guidelines by September.

Minister of State for Climate Change and Environment Ian Pearson said: "More and more people want to go green, but they need to be sure that what they're doing is making a real difference. Green tariffs have the potential to be a real force for good, and I'm delighted that the Energy Saving Trust and Ofgem are doing this much-needed work that will give consumers clear, accurate information on the options that are available to them."

Ofgem’s Chief Executive Alistair Buchanan, said: “A star rating scheme will make it much easier for customers to make informed choices when shopping around for an electricity deal which will help cut their carbon foot print. By expanding the guidelines to businesses, which consume two thirds of the UK’s electricity, we are making it easier for firms to become carbon neutral.”

To make sure the star rating scheme gives customers confidence in green energy tariffs the EST is today launching a parallel consultation looking at the issues involved in setting up an independent accreditation scheme. A key concern of the EST is to ensure that when customers buy green energy they are not just paying for the amount of renewable energy suppliers are already required by government to buy, but are actually funding additional supplies.

Philip Sellwood, Chief Executive of the Energy Trust, said: “Our research shows that over one third of all households are interested in signing up to a green tariff, once the concept had been explained to them. We need to make sure they get the best impartial advice to make informed choices.

“One in two people now look for our Energy Saving Recommended label when purchasing household appliances. We need to develop the same level of recognition and confidence in green tariffs so that when customers purchase green electricity they can be sure that they are making a difference.”