Renewable Energy for Business: Your Options and What They Cost

From green tariffs to on-site solar and long-term power purchase agreements, there are several ways for a business to buy clean energy. Here is how each option works and what it means for your costs and your carbon reporting.

Renewable Energy for Business – Switching to renewable energy is no longer a niche decision driven by values alone. It has become a mainstream commercial choice, shaped by customer expectations, tender requirements, reporting obligations and, increasingly, the numbers themselves. The question for most businesses is not whether to move towards clean energy, but which route makes sense for their size, their sites and their budget.

There is no single way to buy renewable energy. The options range from a simple switch of tariff through to generating your own power on site or signing a long-term agreement with a wind or solar developer. Each has a different cost profile and a different impact on the carbon figures you report. This guide sets them out.

Why Businesses Are Moving to Renewables

The pressure to decarbonise now comes from several directions at once. Large customers and public-sector buyers routinely ask about carbon credentials in tenders, and a credible renewable energy position can be the difference between winning and losing work. Investors and lenders increasingly expect it too.

There is also a reporting driver. Businesses caught by SECR or pursuing a net zero target need to account for the emissions from their electricity, and sourcing renewable power is one of the clearest ways to reduce reported Scope 2 emissions. Setting that within a wider plan is the purpose of a proper net zero strategy.

Finally, self-generation has become genuinely economic. With grid prices structurally higher than they were, generating your own power or fixing a price with a renewable developer can now protect a business from volatility as much as it cuts carbon.

Green Tariffs and REGO Certificates

The simplest route is a renewable or green business energy tariff. Here your supplier matches the electricity you use with power from renewable sources, backed by certificates. In Great Britain these are Renewables Obligation Certificates for older schemes and, more commonly for tariffs, Renewable Energy Guarantees of Origin.

A Renewable Energy Guarantee of Origin, or REGO, is issued for each megawatt hour of renewable electricity generated, and it is what allows a supplier to label a tariff as green. It is worth understanding the difference between a tariff genuinely backed by additional renewable generation and one simply matched with purchased certificates, as the two are not equal in credibility. The scheme is administered by Ofgem.

Green tariffs are the easiest option to adopt because nothing changes physically at your site. The trade-off is that you remain fully exposed to grid prices and network charges, so while your carbon position improves, your cost exposure does not.

On-Site Generation: Solar and Battery Storage

Generating your own power changes the economics more fundamentally. Rooftop or ground-mounted solar lets a business produce electricity behind the meter, displacing power it would otherwise buy from the grid at full price including all the network and policy charges.

For many commercial sites with suitable roof space, commercial solar panels now offer a payback period well within their operating life, and every unit generated on site is a unit not bought at grid rates. Pairing solar with battery storage lets you use more of what you generate and shift consumption away from expensive peak periods.

The main considerations are the upfront capital, the available roof or land, and how well your demand profile matches daytime generation. A business that operates through daylight hours, such as a factory or warehouse, tends to capture more value from solar than one whose demand peaks in the evening.

Power Purchase Agreements

For larger energy users, a Power Purchase Agreement offers a way to buy renewable power at a fixed price over the long term without owning any generating assets. Under a corporate PPA, a business agrees to buy electricity from a specific wind or solar project, often for ten years or more, at an agreed price.

This gives budget certainty, a genuine claim to additional renewable generation, and insulation from wholesale volatility, which is why large corporates have adopted them widely. The commitment is significant, so PPAs suit organisations with substantial, stable demand and the appetite for a long-term contract. Our guide to the corporate Power Purchase Agreement explains the structures in more detail.

PPAs are more involved to arrange than a tariff switch and need careful structuring around volume, price and contract length, but for the right business they combine cost protection and a strong carbon story better than any other single option.

Does Renewable Energy Cost More

The honest answer is that it depends entirely on the route. A green tariff may cost little or no more than a standard one, since REGO-backed supply is now widespread. On-site solar and PPAs can cost less than grid power over their lifetime, effectively turning decarbonisation into a saving rather than a premium.

What matters is matching the option to the business. A small office may do best with a green tariff, a daytime-operating site with solar and storage, and a large energy user with a PPA or a blend of measures. The wrong choice is paying a premium for a green label that delivers neither cost protection nor a defensible carbon claim.

Building the Right Renewable Strategy

Renewable energy for business works best as a considered plan rather than a single purchase. The strongest positions usually combine measures: a credible tariff for the power you still buy, on-site generation where the roof allows, and a longer-term agreement for larger loads.

Catalyst helps businesses weigh these options against their demand, their sites and their reporting obligations, then procure the mix that delivers the best combination of cost and carbon. If you want to understand which renewable route fits your business, speak to one of our energy consultants today.

Related service: Renewable Energy Procurement, how Catalyst sources clean power and structures on-site and contracted generation for UK businesses.