A "100% renewable" business electricity tariff in the UK in 2026 most often means a standard wholesale-market electricity contract paired with Renewable Energy Guarantees of Origin (REGO) certificates retired against the volume consumed. The certificates are real. The additionality, for a buyer who cares about Scope 2 emissions or carbon impact, is often zero. The Climate Change Committee and Ofgem have both flagged the gap; the Greenhouse Gas Protocol Scope 2 guidance acknowledges it directly.
TL;DR
- REGOs are tradeable certificates that prove one MWh of electricity came from a renewable source. They detach from the underlying electricity and trade separately.
- A "100% green" tariff backed only by REGOs typically delivers no additional renewable generation; the underlying electricity flows from the standard wholesale market.
- Corporate Power Purchase Agreements (PPAs) deliver contractual additionality by funding new generation through a long-term offtake commitment, typically 10-15 years.
- On-site solar PV under 50 kWp falls below the planning threshold for many commercial buildings; the MCS register lists certified installers and panel products.
- The GHG Protocol Scope 2 market-based method allows REGO claims, but the location-based method strips the certificate out; mature corporate disclosure reports both.
Last reviewed: May 2026
What a REGO actually is
Renewable Energy Guarantees of Origin are certificates issued by Ofgem under the REGO scheme. One REGO represents one megawatt-hour of electricity generated from a qualifying renewable source (wind, solar, hydro, biomass under defined sustainability criteria). REGOs are issued to the generator, can be traded separately from the underlying electricity, and are retired by suppliers to back the "renewable" content of a green tariff sold to a customer. The scheme is set out on the Ofgem REGO page, and is grounded in the EU Renewables Directive framework that the UK adopted before EU exit and retained in domestic legislation.
The mechanism works at the certificate level. A wind farm in Aberdeenshire generates 1 MWh; Ofgem issues 1 REGO; a supplier in Birmingham buys that REGO and retires it against 1 MWh of grid electricity sold to a customer in Bristol. The customer's bill says "100% renewable." The electron the customer used was identical to the electron used by their neighbour on a brown tariff.
Why REGO-only green tariffs are often greenwashing
The catch is that REGOs trade at a discount that reflects oversupply in the UK market. In recent years REGOs have traded at a fraction of a penny per kWh, sometimes a small number of pounds per MWh, depending on vintage and source type. Because almost all UK renewable generation produces REGOs that are sold separately to the highest bidder, a green tariff supplier can buy enough certificates to back 100% of customer demand without funding any new renewable build. Customers pay a small green-tariff premium; suppliers retire cheap certificates; the renewable generation would have happened anyway under the Contracts for Difference framework, the Renewables Obligation legacy, or merchant wholesale economics.
The CCC and Ofgem have both flagged that REGO-only claims do not deliver additionality. The Greenhouse Gas Protocol Scope 2 guidance, the international standard for corporate carbon accounting, accepts REGO-style certificates under the market-based method but requires reporting the location-based result alongside, which strips out the certificate effect.
What additionality actually requires
Additionality means the renewable generation would not have happened without the buyer's intervention. A corporate Power Purchase Agreement (PPA) is the most defensible additionality route: the corporate buyer signs a long-term offtake commitment, typically 10-15 years, with a developer of a new wind or solar project. The PPA underwrites the project's revenue, which lets the developer secure financing and build new capacity. The REGOs from that project flow to the corporate buyer along with the electricity. The buyer is contractually causing new renewable generation to exist on the grid. On-site renewable generation (rooftop or ground-mount solar PV behind the meter, a small wind turbine, or on-site battery paired with renewable generation) also delivers additionality by definition: the generation exists because the business invested in it.
UK business renewable options compared, May 2026
| Option | Additionality | Cost vs standard tariff | Contract length | Scope 2 market-based impact |
|---|---|---|---|---|
| REGO-only green tariff | Low to none | +0 to +0.5 p/kWh | 1-2 years (matches energy contract) | Counts; weak under disclosure scrutiny |
| Bundled renewable tariff with named generator | Partial; depends on contract | +0.2 to +1 p/kWh | 1-3 years | Counts; stronger story |
| Corporate PPA (physical or virtual) | High | Variable; can be cheaper at scale | 10-15 years | Counts under both methods |
| On-site solar PV behind the meter | High | Capex; payback 6-10 years typical | Asset life 25 years | Reduces purchased electricity directly |
| Self-build wind (small scale) | High | Capex; site-specific economics | Asset life 20-25 years | Reduces purchased electricity directly |
Costs and contract lengths are illustrative of typical UK arrangements as of May 2026 and vary by supplier and project. Verify any specific quote against the named provider.
Drax, SSE, Engie versus Good Energy, Ecotricity and Octopus
Major commercial suppliers offer green tariff products with different sourcing claims. Drax Energy Solutions and SSE Business Energy and Engie sell green business tariffs backed by a mix of own-generation and purchased REGOs. Good Energy and Ecotricity have historically built their proposition around higher levels of own-generation and named PPAs with independent renewable generators, with marketing that emphasises additionality. Octopus Energy for Business markets its green tariffs against its renewable generation portfolio and PPA arrangements. The claims sit on a spectrum: at one end, REGO-only with no traceable generator; at the other, a contracted PPA with a named site. The catch is that the marketing language often does not distinguish between these ends of the spectrum, and the buyer has to read the supplier's annual fuel mix disclosure (a regulatory requirement on the supplier's website) to understand what is actually backing the tariff.
Here is where it breaks for a corporate buyer with a Scope 2 commitment: a "100% renewable" claim from supplier A and supplier B can mean very different things in additionality terms.
Corporate PPAs and how they actually work
A corporate PPA is a long-term contract between a corporate buyer and a renewable energy generator. A physical PPA delivers electricity directly from a specific generation asset to the buyer's site through the grid, with the supplier acting as a sleeving counterparty. A virtual PPA (also called a financial or synthetic PPA) is a contract for difference between the buyer and the generator against a reference wholesale price, without physical sleeving. Virtual PPAs are common for buyers with distributed estates where physical sleeving is impractical. UK corporate PPA activity grew through the late 2010s and 2020s as Contracts for Difference auctions matured and merchant renewable economics improved. Typical UK corporate PPA tenors run 10-15 years; pricing is usually a fixed £/MWh strike or an indexed structure. The PPA delivers REGOs to the buyer, which can be retired against consumption. The PPA also delivers contractual additionality, because the developer's financing case depended on the offtake commitment. For most UK SMEs, a corporate PPA is too large a contractual step; the minimum economic PPA size is typically tens of GWh per year, which excludes most businesses below mid-market scale.
On-site solar PV in 2026: the SME route to additionality
For a UK SME wanting genuine additionality without a corporate PPA, on-site solar PV is the practical route. A commercial rooftop installation under 50 kWp (kilowatts peak) typically falls within permitted development rights for many commercial buildings, subject to listed-building and conservation-area exceptions. The MCS register (Microgeneration Certification Scheme) lists certified installers and certified panel products; MCS certification is a precondition for the Smart Export Guarantee, which obliges large suppliers to pay an export tariff for surplus generation. Payback periods depend on three numbers: installed cost per kWp, annual generation per kWp (typically 850-1,000 kWh per kWp in southern England, less in northern Scotland), and the avoided cost of grid electricity. At May 2026 grid electricity unit rates of 26-30 p/kWh for SMEs and installed costs of roughly £850-£1,200 per kWp for a 30-50 kWp system, simple payback typically sits at 6-9 years before any export revenue. Battery storage paired with solar shifts the economics depending on the time-of-use shape of the business load.
Solar generated on the roof is electricity that does not flow through a green tariff; it is electricity that does not need a tariff at all.
GHG Protocol Scope 2 and what corporate disclosure now expects
The Greenhouse Gas Protocol Scope 2 guidance is the global standard for accounting for emissions from purchased electricity. It defines two methods: location-based (apply the grid average emissions factor to all electricity consumed) and market-based (apply emissions factors that reflect the contractual instruments the business has bought, including REGOs and PPAs). A business reporting under the SECR (Streamlined Energy and Carbon Reporting) framework in the UK uses location-based by default and may report market-based alongside. The DESNZ government conversion factors for greenhouse gas reporting, updated annually, provide the location-based factors. The market-based method is where REGO certificates and PPAs change the reported number. The two-method disclosure, increasingly expected by investors and procurement scrutiny, exposes any gap between a "100% renewable" tariff claim and the underlying grid mix.
A regional example: a Glasgow site in February 2026
A Glasgow-based food production site with 1.2 GWh annual electricity consumption ran a renewable procurement in February 2026. Three options were modelled. Option A, a REGO-only green tariff from a major supplier, added 0.2 p/kWh to the unit rate (£2,400 per year) and produced a market-based emissions number close to zero, with a much higher location-based number reflecting the GB grid mix. Option B, a bundled tariff with a named Scottish wind generator, added 0.6 p/kWh (£7,200 per year) with a clear traceability story. Option C, a 12-year virtual PPA with a Scottish onshore wind project under development, modelled flat-to-cheaper than the standard tariff over the contract life but required a 12-year commitment and balance-sheet treatment review. The business chose Option B for the immediate term and started internal work on a future PPA, on the basis that the contractual additionality of Option C did not yet fit its risk appetite.
What to verify before signing a "green" tariff
Read the supplier's annual fuel mix disclosure, which is a regulatory requirement and is published on the supplier's website. Look for the proportion of renewable electricity, the proportion backed by own-generation or named PPAs, and the proportion backed by purchased REGOs only. Ask the supplier in writing for the additionality position in plain language. If the supplier cannot or will not distinguish between own-generation, contracted PPA and REGO-only sources, the tariff is almost certainly REGO-only with marketing varnish. For Scope 2 reporting purposes, document both the market-based claim and the underlying mechanism so that any future audit or stakeholder query can be answered honestly.
A green tariff that cannot name its generation is a marketing label.
Editorial disclaimer. KaelTripton is an independent UK publisher. This article is editorial, not personal financial or energy procurement advice. Rates, caps, grant levels and supplier offers move; verify any figure with the named primary source before acting on it. KaelTripton does not earn commission from suppliers or brokers mentioned.
Frequently asked questions
What is a REGO certificate?
A Renewable Energy Guarantees of Origin certificate is issued by Ofgem and represents one MWh of electricity generated from a qualifying renewable source. REGOs trade separately from the underlying electricity and are retired by suppliers to back green tariff claims.
Is a 100% renewable tariff actually renewable?
It depends on the backing. A REGO-only tariff typically delivers no additional renewable generation; the underlying electricity flows from the standard wholesale market. A bundled named-generator tariff or a corporate PPA delivers more meaningful additionality.
What is additionality in renewable electricity?
Additionality means the renewable generation would not have happened without the buyer's intervention. A corporate PPA with new-build generation or an on-site solar installation provides additionality; a REGO-only tariff generally does not.
Can an SME sign a corporate PPA?
Most corporate PPAs require consumption in the tens of GWh per year to be economic, which excludes most SMEs. On-site solar PV is the practical SME route to additionality. Aggregated PPAs for smaller buyers exist but are uncommon.
How are renewable tariffs reported under SECR and GHG Protocol Scope 2?
The GHG Protocol Scope 2 standard requires location-based and market-based reporting in many disclosures. The market-based number can reflect REGO and PPA claims; the location-based number applies the grid average emissions factor regardless of contracts.
Is on-site solar PV worth it for a UK SME?
At May 2026 grid electricity rates of 26-30 p/kWh and installed costs of roughly £850-£1,200 per kWp for a small commercial system, simple payback typically sits at 6-9 years before export revenue. Site-specific generation and load shape determine the answer.
Sources
- Ofgem - Renewable Energy Guarantees of Origin scheme, accessed May 2026
- Ofgem - Energy policy and regulation (fuel mix disclosure requirements)
- DESNZ - Greenhouse gas conversion factors and SECR guidance, 2026
- DESNZ - Energy prices statistics collection
- Climate Change Committee - Net Zero progress reports, accessed May 2026
- MCS - Microgeneration Certification Scheme installer and product register
- Ofgem - Energy advice for businesses, accessed May 2026
