Choosing Green or Brown Energy, Which Is For You?

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It’s becoming more and more common for energy suppliers to offer the option of brown or green energy contracts to their customers. A good example of this is Apollo Energy, for example, find it best to broker energy contracts for their clients in which they specify that they want green energy options; otherwise many energy suppliers will default to brown energy, and this happens more than you might think. To explain the difference, brown energy is that which most of us are accustomed to – that produced by traditional power technologies such as fossil fuel usage. Green energy is that which comes from renewable sources, like wind or solar.

Why Switch?

The source for green energy can vary; while some green energy suppliers provide power from 100% renewable sources, some is provided by CHP (combined heat and power) plants. How much you’ll spend on green energy depends on your supplier. Most will offer a cost neutral green option; by using green energy, you are no longer liable for a Climate Change Levy, so the cost of the energy is evened out by savings on the levy. Others are offering discounted green energy, which means that you can get green energy at a lower cost than what you pay for your current brown energy. Since each supplier invoices differently, it can be to your advantage to have a utility management consultant to look out for your best interests. For example, while one green energy supplier may charge a premium (CCL equivalent) surcharge, another may build that cost into the unit rate. This can make it difficult to tell which contract is better for your company financially; a consultant or comparison site can make sure that you get a fair comparison of rates.

So What Next?

When you’ve agreed to a contract with a green energy supplier, you’ll most likely receive a certificate that you can display to confirm that you are indeed running your business on green energy, and in the future this will undoubtedly be the badge of any good company. Of course, there are always some that will choose whatever energy contract is the cheapest for them, regardless of whether it is brown or green. Others will be eager to go for green energy, and we’ll work to get it for them at the best price, with the goal being carbon neutrality. It should be noted that depending on different variables like your current exemption, it can sometimes cost less to go with brown energy, not that you should! The amount of cost savings with green energy contracts can depend quite a bit on the type of business you’re running. Some housing associations as well as some commercial sites might not be able to benefit from contracts which are cost neutral. If you aren’t eligible for CCL, then you’ll be paying a green premium on all electricity and therefore will be paying more. However, for some clients the environmental advantages are worth the higher premium.

In the end, it’s up to you as to whether you should switch to green. The decision should be based on your CCL status, your utility procurement strategy, and of course your own business ethics. By signing a green energy contract, you are promoting a more sustainable image, and that’s just good business.

Photo by Luke Jones