How energy providers can inspire the switch to green tariffs

Make Great Britain a green energy superpower – that’s what the UK government aims to do by 2030, eventually reaching its net zero target by 2050. Sceptics will say this is an overly ambitious plan, but a recent National Energy System Operator (NESO) report assures that it’s certainly achievable — if urgent action is taken.

As public awareness of climate change and the push for net zero grows, so does the realisation that getting to net zero won’t come cheap. The levies funding renewable energy projects are set to hit £14.8 billion by 2029-30, meaning consumers will certainly feel the pinch on their energy bills as they foot the bill for these decarbonisation efforts.

Getting customers to switch to green energy tariffs is one way to support the transition to greener power and help reduce the UK’s carbon footprint. However, encouraging the switch is easier said than done, especially when it comes at a price. So, how can energy providers address concerns about greenwashing and persuade customers to pay more for their energy bills now, without immediate benefits? Let’s explore…

What is a green energy tariff and how ‘green’ is it?

Research conducted by Ofgem shows that consumer understanding of green energy tariffs remains low. They know it involves renewable energy and it’s better for the environment, but few know what it involves and the potential benefits of this type of tariff. 

Green energy tariffs work in a few ways, not all of them being ‘100% green’…

1. Customers can switch to a specialist green energy company like Ecotricity which generates all their own green energy using wind and solar farms, helping to increase the amount of renewable energy in the UK. 
2. Other providers like Octopus generate some renewables themselves, matching the remaining amount of energy used by consumers by buying renewable energy and Renewable Energy Guarantees of Origin (REGO) certificates from the marketplace. 
3. However, some providers simply buy REGO certificates to match the amount of energy customers use. This doesn’t add any new renewable energy to the grid, it just moves around electricity that already exists — likely still funding fossil-fuelled electricity.

What are the benefits of switching to a green energy tariff?

Ultimately, green energy tariffs cost more than standard tariffs because the operating costs are higher. When paying a premium for a product or service, consumers typically expect something of additional value in return. The benefits of switching to green energy tariffs are less straightforward than that. 

As price is by far the biggest factor for consumers when it comes to considering tariff options, those disengaged from climate issues may be less willing to pay more for a green energy tariff they don’t see immediate benefit or value in. So what are the actual benefits of switching to a green energy tariff for consumers?

Well, there’s the greater good. Switching to green energy is part of a broader, UK-wide ethical commitment to sustainability and climate action. By investing in green energy, they become part of a larger movement of climate-concerned customers, all doing their bit for the environment and future generations.

There are also future cost-savings on the table. Investing in green energy and renewable infrastructure now shows energy providers and generators that there’s greater demand for renewables, which will likely make the cost more competitive in the long term as more and more renewables are generated for the UK to use.

In a time of necessity, green energy is considered a ‘nice to have’. Is the promise of a cost-effective and greener future enough to make consumers leave the provider and tariff they’re already happy with? The answer is likely no. There’s much more energy providers can do to encourage switching behaviour.

How to get customers to switch to green energy:

Consumer behaviour around switching energy providers is often shaped by convenience, status quo bias, and price sensitivity. People are time short so stick with the familiar for ease. As green energy is often pricier, there’s greater resistance to change. Here are a few ways energy providers can communicate green energy as a practical, valuable choice.

1. Simplify the process of switching. Customers are often put off by the complexity and confusion around green energy. Providers can address this by making green energy tariffs as transparent and simple as possible, debunking myths (like “green tariffs are just greenwashing”), and showing customers exactly how and why green energy works for them.
2. Make messaging more positive. People love the idea of upgrading to something better. Highlighting green energy tariffs as a premium, sustainable, and future-proof choice could win over more customers. Take Tesla, for instance, marketing its products as high-performance innovations — not just environmentally friendly alternatives.
3. Personalise engagement and education. Seeing is believing. Showing customers how switching can reduce their carbon footprint in measurable terms, along with personalised insights into their energy consumption can make customers feel more in control and motivated to make the switch.
4. Incentivise the switch. Incentives help bridge the gap between saying and doing. For example, Octopus has a great scheme that rewards customers for reducing their energy consumption and submitting regular readings. Providers could even offer energy-saving products or flexible contracts to reduce risk, making green tariffs more appealing and accessible for hesitant customers.
5. Leverage social proof. Nothing builds trust like seeing others make the same choice. Using loss aversion and social proof tactics like highlighting the number of customers already on green tariffs and sharing testimonials from existing customers can help to make green energy seem less of a change and more of a norm.

Making green energy tariffs a new normal

Getting customers to switch to green energy starts with understanding what they care about and what’s holding them back. By making green tariffs transparent, accessible and rewarding, providers can encourage customers to make the change.

Get in touch with Trinity McQueen today — we help energy companies connect with their customers, making the switch to green energy simple and impactful.