Renewable energy deals don't have to cost the earth: Households could save £272 a year by switching to a greener tariff

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Households can slash their energy bills by up to £272 and cut down their impact on the planet at the same time, by switching to a renewable energy tariff.

The average household will pay just £8 (around 2p-per-day) more to go green compared to the overall cheapest tariff on the market, according to comparison site uSwitch. 

Tonik Energy currently offers the cheapest renewable deal at £866 a year on average. 

These deals reduce the amount of fossil fuels that are burned to provide a household's electricity supply. 

The news comes as 16 cheap fixed-rate energy deals come to and end this month, risking bill shock for those who don't switch away before they are move onto one of these out of contract deals.

Green electricity: Most green tariffs match the amount you use with energy from renewable sources

This year, five of the energy giants have upped the cost of their standard variable rate deals, affecting two thirds of the UK’s families languishing on these already expensive out of contract deals. 

Thousands of families therefore risk being shifted on to these deals this month, if they don't act soon, as 16 fixed-rate tariffs are due to end (see below).

Now could be the perfect time for these customers to switch to a renewable tariff, according to uSwitch, with hundreds of pounds worth of savings up for grabs. 

Claire Osborne, uSwitch energy expert, says: 'Green energy tariffs are now within easy reach of consumers who want to limit their carbon footprint but don’t want to break the bank. It currently costs just 2p a day to go green when compared to the cheapest deal on the market.

'If your fixed deal is coming to an end this month, a green energy tariff could not only help mitigate your carbon footprint but could also save you some money. The seven in ten Brits languishing on an expensive standard variable tariff could cut their annual energy bill by an average of £272 by switching to a green tariff. Suppliers are offering more and more renewable energy options, so there’s now even more choice in the market.' 

Green Energy deals are getting cheaper 

Traditionally energy companies charge a premium for green tariffs, but they are now much more affordable compared to the rest of the market, with 24 deals costing less than the average Big Six’s standard variable tariff.  

The cheapest renewable deal from Tonick Energy costs £866 per year, for the average household, £8 cheaper than the overall cheapest and non-renewable deal on the market from Green Network Energy at £858.

Tonik has the benefit of offering no exit fees and a £40 dual-fuel discount plus it pays customers 3 per cent interest on any in-credit balances - more than any savings account on the market. 

The company guarantees to replace each unit of electricity you draw from the grid with the same amount of renewable electricity. 

Households are increasingly looking towards greener sources of gas and electricity.

Source: uSwitch.com, correct as of June 19 2017.

According to research from uSwitch, 24 per cent of bill payers would consider going green even it was more expensive, with 18 per cent willing to add £50 to their annual bills for a clearer conscience.

These green tariffs used to be more popular with suppliers in the past, however rules imposed by the regulator in 2010 slimming down the number of deals each provider could offer to just four meant that many suppliers dropped their renewable tariff options. 

But the last year has seen environmentally-conscious households options bolstered again as the number of green tariffs has more than doubled in the past year, from just 13 to 30. 

How do they work? 

There are several different types of renewable deal on the market.

As all of our energy comes from the national grid, it’s impossible to only draw energy created by green sources.

Instead, most companies pledge to put back the same number of units of electricity or you use back into the grid from a renewable source.

This will typically be produced by wind farms, hydro-electric power stations, bio-gen and solar power.

It is possible to produce renewable gas, biomethane, from organic matter such as manure which according to Good Energy is 'chemically identical to natural gas but can be created and used with less impact on the environment.'

However it is slightly harder to get hold of and so there tends to be fewer companies offering renewable dual fuel tariffs - any that do tend to only offer a small percentage of green gas as part of their tariffs. 

Bulb for example offers 10 per cent and promises to repay any exit fees you are charged if you switch to one of it's deals before the end of your current contract. 

There are also a handful of companies which produce their own green energy too rather than buying it from green generators.

Good Energy promises 6 per cent of customers' gas use will be replaced from renewable sources, plus it boasts investment in renewable initiatives and is building its own wind farm and solar farms. 

Similarly Ecotricity, already offering 5 per cent renewable gas and produces 30 per cent of its renewable electricity, is in the planning stages of new grass-powered gas mills, which will put energy directly back into the grid.  

Source: uSwitch.com correct as of June 19 2017. 

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