Green Energy Tariffs
A green energy tariff provides a guarantee that the energy has been sourced renewably. This is usually purchased by firms pursuing an environmental strategy. Rates are higher than standard energy tariffs. A green business energy tariff is based on agreements between energy providers and suppliers.
The supplier has been certified as being environmentally friendly by an independent third party, which ensures that there are no carbon emissions of pollutants from production to product delivery. To become one of these suppliers, they must have been monitored for at least three years and have attained certification from third party organisations. Green energy tariffs are usually applied based on kWh consumption, with fixed monthly tariff prices per kWh of green energy used.
Companies use green energy tariffs to align their companies with their values, becoming increasingly popular with consumers. It also gives opportunities to distinguish themselves.
The qualitative benefits of the switch to green energy tariffs include:
- Environmental Protection: Going green can help protect our environment by using renewable energy sources. This will reduce your carbon footprint and minimise the pollution you produce.
- Financial Benefits: There are many great financial benefits of switching to clean energy, like tax incentives, increased property values, and a stable cost of power over time.
- Improved Employee Morale: Perhaps one of the most overlooked benefits of switching to clean energy is how happier employees know that their company cares about them and the environment. This can improve productivity and morale and reduce staff turnover.
- Brand Image: Many consumers consider a company’s environmental record in their decision-making process regarding purchases. By implementing green practices, your company will place itself ahead of the competition. Businesses that use renewable energy sources will set themselves apart from the crowd and attract new customers who want to be seen as promoting environmental sustainability.
According to research by world-famous sustainability analyst John Sterman of MIT Sloan School of Management, ‘the difference between greenest companies are about twice as big as the difference between greenest companies and everyone else’s.
This demonstrates the importance of a green energy tariff for a company for a number of reasons:
- It can enable your company to maintain a high ethical reputation.
- It may push you to implement many other environmentally friendly measures that have been shown in some studies to increase profitability.
- It also leads to an improvement in your share price and wealth because companies with strong environmental values can get investor attention and get more investment from companies with weaker environmental values by handing out generous green tariffs.
The cost of green energy is higher than what most people are used to, but that’s because it means fewer external costs like CO2 emissions. So while green energy tariffs are more expensive, they provide a more environmentally responsible route for businesses. Renewable sources include wind power, hydroelectric power, biomass, solar, tidal, geothermal, and biofuel. Wind power promises to be the fastest-growing source of energy in the coming years. According to industry experts, it is possible that in Italy, wind could produce more than 33% of the country’s electricity needs by 2030.
A green business energy tariff cannot always guarantee that your electricity comes from renewable sources. Some providers state that a percentage of electricity comes from coal power stations, gas turbines, nuclear power stations or thermal power stations. These are the “dirty” forms of electrical generation that contribute heavily to CO2 emissions. The reason for this is that there are not enough green energy sources to meet the current demand.
If the price of green power is too high and there isn’t affordable enough renewable energy in the area, this could cost your company more. As demand for environmentally responsible energy rises, prices will also go up unless countries produce more renewable energy. There are many solutions to solve this problem – for example, more significant subsidies to boost wind power production or reduce CO2 emissions to reduce the impact on the environment.
Critics of green tariff’s say there is no need for them as any energy tariff can be made ‘clean’ with carbon offsetting. Under this system, companies that use dirty electricity can pay other organisations to reduce the amount of CO2 released into the atmosphere; however, these organisations can charge companies for this service. Proponents of green tariffs say that carbon offsetting makes it very difficult to guarantee that your electricity comes from renewable sources because you do not directly control your power source. This means you cannot be 100% sure your energy comes from renewable sources.
Energy companies are not required to offer green tariffs. However, some companies perform better when they do. The “Big Six” energy companies – AGL, Origin, EnergyAustralia, EnergyAustralia, Origin Energy, and AER- have made their power supplies more environmentally friendly in recent years. These companies use less polluting sources of electricity, such as hydroelectricity and wind power. They also promote their environmental credentials by using green energy tariffs and advertising their environmental achievements to the public.
There is still a lot of research to be done on the effects of green tariffs on businesses. For a business to make an environmentally friendly decision, it must first understand whether or not a green tariff is worth investing in. Essentially, businesses must choose between investing in a green tariff or investing in their company overall.
If a company purchases a green tariff for their energy use, will their profitability increase? Will it have any effect on the long-term financial sustainability of the company? Businesses that want to be fully sustainable should do more research into green tariffs (and all other environmental factors such as recycling and reusing) to make sure they are making the best decisions possible. This will lead to better, greener results.
In summary, switching from standard tariffs can be difficult, but doing so will protect the environment and improve the company’s image – two significant benefits of going green. If you combine it with carbon offsetting and green energy tariffs, you will make your company as environmentally friendly as possible. You can find out more about green energy tariffs here.
Other useful links about Business Energy
5 Products and Services Dual Energy Can Provide for Your Business
Switching to Scottish Power
What is a Fixed-Rate Business Tariff?
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