With energy prices on the rise and as the UK continues to move toward Net Zero by 2050, you may be trying to quickly familiarise yourself with what green energy options are available and which is best suited to your business.

Green energy options can be summarised into four main categories, and each is best suited depending on particular company objectives and goals. Key questions to ask yourself before beginning include:

• Does energy play a significant (an expensive) part in my operational costs?

• Do I have unique energy requirements? For instance, is it necessary for my operations to run 24/7, such as overnight processes or for the safety of people or animals?

• Do I own my property or will my rented premises allow for long-term green energy contracts?

• How vital is 100% green energy in my Sustainability objectives, and what does this mean for the long-term growth of my company?

Switching to a Green Energy tariff

A Green Energy tariff is when some or all of the electricity you buy is 'matched' by purchases of renewable energy that your energy supplier makes on your behalf.

These can come from a variety of different renewable energy sources (solar, wind, hydro), however, it doesn't guarantee that the energy you are using at the time that you need it is green. It is only a pledge or "credit transfer" that, with the higher tariff that you pay, an equal amount of renewable sources will be brought into the grid on your behalf. This route is suitable for individuals, sole traders or small businesses, particularly those who rent their premises, who aren't necessarily worried about rising energy prices (small businesses with low energy consumption) but want to switch to a more carbon-friendly energy route, fast. Keep in mind this tariff is generally higher than the standard grid tariff and isn't fixed, so it is likely to increase.

Signing on to a Corporate PPA

A Corporate PPA (Power Purchase Agreement) is a contract with a large energy generator (like a Wind Farm developer) to buy your energy exclusively from them for an extended period (anywhere from as low as 5 to as high as 25 years).

Some of the energy developers will offer a slightly reduced energy tariff as an incentive for signing, though often, these are not fixed prices and are likely to go up over the whole contract lifespan.

These large energy developers then take these contracts to banks and investors as proof of customers to secure funding to develop the wind farm. Much like a green tariff, wind farms are an intermittent source, meaning you may need energy when "the wind doesn't blow," and therefore cannot guarantee that your energy is always green. The surplus energy is still coming from the grid, depending on what is available.

This route is an option for small businesses with low energy usage who can commit to a 5-25 year contract through a long-term rented or owned office space. This route suffers from transmission losses or the losses that occur from getting the energy generated on the wind farm to where it's needed in your business or home. The excess energy required for operation must come from somewhere, and it can't currently be guaranteed that this is a renewable source. Therefore, while this is a great option for those who want to see an increased amount of large-scale commercial renewable farms developed, it can't be said that it's 100% green.

Signing on to an On-site Renewable PPA

An on-site renewable PPA is a Power Purchase Agreement where a renewable manufacturer (mainly solar) will size and install panels on your premises for free or at a significantly discounted rate, with the intention that you buy the energy generated from them for the lifespan of the panels.

This route likely benefits from a lower tariff upon signing, but this tariff is unlikely to be fixed and is subject to a long contract at a variable rate, depending on the market. These contracts are often the longest (20-25 years) as they last as long as the lifespan expected from the panels installed. The inefficient panels are yours to "keep" (e.g. your responsibility to dispose of responsibly). Of the paid energy options, this is "greenest" as the energy is generated on your premises, meaning it doesn't suffer from transmission losses and the panels are sized to your site's energy requirements. Depending on the terms of your rental agreement, or if you own your premises, this is a good option for large energy users who lack the capability of investing in their own renewable sources, but who still want to go "go green." Keep in mind, unless a system is designed to include battery storage, you're only using green energy as long as the sun shines, and a network source will be needed for any other, or surplus, energy usage.

Investing in On-site Renewable Development

On-site renewable development refers to the design and installation of renewable energy sources on your business premises. Options include wind turbines and solar panels with the support of battery storage, fuel cells and other storage systems.

On-site renewable energy development is a great option for those with unique energy requirements, high energy usage and those looking to significantly reduce their energy bills, as a system can be designed to fully meet operational requirements with green, self-generated electricity. The system can be designed to future-proof your business, increase property value, and is the greenest option as it avoids transmission losses. On top of this, it also provides the capability of offsetting historical carbon if you decide this is one of your business objectives. Of all the energy options, the on-site development investment can take your energy bills to zero, providing a payback period with energy bill savings.

Which energy option is the most appealing for your business?

“If you are a large energy user who is interested in on-site renewable development to help decrease you energy bills while also achieving sustainability initiatives, read more about how Enspec can help here: https://www.enspecpower.com/sustainability-facilitation/.”