Renewable Energy for Business: On-Site Solar, Green Tariffs and REGOs

Ways a business can use renewable energy

On-site solar

On-site solar is the only option on this list that reduces the electricity you have to buy. What you use as it is made saves your full unit price; what you export can earn a Smart Export Guarantee payment, at rates set by suppliers (Ofgem).

It needs a suitable roof or land, the right daytime use and capital (or a PPA). See how much solar your business needs and commercial solar payback.

Green tariffs and REGO certificates

Ofgem runs the REGO scheme (Ofgem):

• One certificate per MWh. Ofgem issues one REGO per megawatt hour of eligible renewable output to renewable generators.
• What they are for. Their primary use is Fuel Mix Disclosure: licensed suppliers must tell customers the mix of fuels behind the electricity they supply.
• Who can get them. Renewable generating stations in Great Britain and Northern Ireland, through the renewable electricity register.
• Europe. The EU stopped recognising UK REGOs from 1 January 2021, and EU Guarantees of Origin are no longer used for GB Fuel Mix Disclosure from the period starting 1 April 2023.

A green tariff is a way of buying power with renewable certificates attached. It is quick to arrange and needs no roof, but it doesn't change your consumption or, by itself, your price.

Which counts for carbon reporting

The UK Government's Environmental Reporting Guidelines (the guidance for Streamlined Energy and Carbon Reporting) say (guidance, "Reporting renewable energy"):

• Location-based first. Organisations are encouraged to report electricity emissions using location-based grid-average factors, and hour-by-hour factors where available.
• Market-based alongside. Where an organisation has contracts for renewable electricity, such as PPAs or separately bought REGOs, it can show a reduced, market-based figure, presented alongside the location-based figure.
• Say what it is. Organisations should specify whether the renewable energy is additional, subsidised, and supplied directly (including on-site generation) or through a third party.

The guidance's example report lists "renewable electricity generated from owned or controlled sources" separately from "electricity purchased for own use". Power your own panels make and you use simply never becomes purchased electricity. Reporting rules are set out on GOV.UK; your accountant or sustainability adviser will know which apply to you.

PPAs: on-site and off-site

An on-site PPA puts panels on your premises with no capital outlay: a provider finances, installs and maintains them and you buy the power, usually for 10 to 25 years (Solar Energy UK). An off-site, or corporate, PPA is a contract for power from a solar or wind farm elsewhere, usually for large users. See solar PPAs for businesses.

Net zero plans: where solar fits

Most business energy plans follow the same order:

• Use less. Lighting, heating controls, insulation, switching things off.
• Generate your own. Solar on the roof or land, sized to the daytime use that is left.
• Buy the rest renewable. A green tariff or PPA for what solar can't cover, reported on the basis the guidance sets out.

On-site solar is the step that makes a measurable difference to both cost and purchased electricity, which is why it usually comes before buying certificates. The first step to finding out what your site can do is a survey.