Stop Buying Green Energy. Generate Your Own Instead.
- Gary Carter
- Feb 16
- 5 min read
Most organisations genuinely want to reduce their carbon footprint. Many of them start by picking a “green” energy tariff; the idea being that if you buy renewable power from your supplier, you’re doing your bit for the planet.
It sounds logical. It feels virtuous. It even looks good on a sustainability report. And many organisations do it.
But here’s the uncomfortable truth: choosing a green tariff isn’t the same as using green energy and for many organisations it’s a deeply inefficient way to pursue carbon reduction or cost savings.
Generating your own renewable energy means producing electricity on-site through technologies such as solar panels and battery storage, reducing reliance on grid power and lowering long-term energy costs.
The hypocrisy of buying “green” power
As reported in several newspaper outlets such as The Times and Daily Mail in early February, a recent Freedom of Information investigation revealed something striking about the UK’s Department for Energy Security and Net Zero, the very department tasked with leading the nation’s climate efforts. Despite its mission, its headquarters is powered primarily by standard grid electricity, which still carries a heavy fossil-fuel component.
That may seem like a political story, but the wider point is structural: public sector bodies and businesses are increasingly reluctant to pay a premium for “green” tariffs that often deliver symbolic rather than material decarbonisation. In fact, many agencies explicitly refuse to switch to renewable tariffs because:
they cost more, and
the way they guarantee “green” doesn’t always reduce fossil fuel use in a measurable way.
This isn’t just about government hypocrisy, it’s evidence of a broader truth: paying a premium for green energy can be poor value, and it distracts from the real work of reducing emissions and energy spend.
The freedom of information requests that formed the basis of the newspaper articles on this uncovered that nearly half of councils used more expensive green or “no carbon” electricity, paying an extra £10-£20m extra each year than standard tariffs.
Why many green tariffs don’t deliver what people think
Green energy tariffs typically work by matching your energy usage with renewable generation certificates (REGOs). Suppliers can buy REGOs and still source most of your electricity from the wholesale grid which, in the UK, still draws power from fossil-fuel plants most of the time.
Even more confusingly:
Suppliers often sell REGOs cheap, sometimes for a few pounds per customer per year, while still sourcing power from the general grid and calling it “100% renewable”.
Standard tariffs and renewable tariffs both track the same wholesale price because electricity is priced on a marginal system where gas-powered generation still sets the price most of the time.
So what you’re paying extra for on a “green” tariff is often less a new generation of renewable power and more an accounting exercise some suppliers use to signal sustainability.
If you’re spending more money without actually changing how your organisation uses, procures or generates energy, you’re playing at sustainability, not delivering it.
The real alternative: actual energy generation
Here’s the punchline: if your goal is to use truly green energy, the best way to do it is to generate it yourself. Doing that ensures you have traceability of energy origination and critically, self-generation opens up the possibility of a transformative reduction in energy costs. All that might sound obvious, but it’s surprising how few organisations have seriously pursued it.
Why?
The biggest barrier isn’t technology, it’s capital cost. Solar panels, battery storage systems, micro-generation and other on-site zero-carbon technologies have become significantly cheaper in recent years. But upfront investment still remains a barrier for most companies: many simply can’t afford the capex to install them or would rather deploy their capital elsewhere even when they will generate measurable cashflow improvements over time.
This barrier is real and understandable. And it is exactly where traditional thinking fails companies: you don’t start with the tariff you start with the installed asset.
When you generate your own energy:
You insulate your organisation from volatile wholesale prices.
You own the electricity your business consumes and it doesn’t matter what your supplier claims.
You capture value on site, instead of paying for someone else to take credit for offsetting your usage.
Our video below explains how Optify's energy transformation approach identifies effective ways of minimising energy consumption and expenditure, making meaningful contribution to scope 2 carbon emission reduction
Why most organisations still buy instead of make their own
There are a few obvious reasons:
1. Green tariffs are easy and generation is hard
Switching an energy tariff is a click or phone call. Installing and managing energy generation requires planning, skills, analysis, and capital. Most companies avoid complexity.
But complexity isn’t the challenge, cost is.
2. Capital affordability is a myth
Yes, installing renewable generation and storage costs money. But what most organisations fail to do is look at it through a cash flow lens rather than a capex budget.
If the savings from the energy you generate are equal to or greater than the financing cost, the project isn’t an expense, it’s a cashflow lever. And if you can structure it so that funding is paid for by the energy savings you realise, you turn an unaffordable project into a self-funding investment.
This is the critical insight: you don’t need to pay for energy generation, you need to unlock it economically.
The problem with buying green energy
There’s a persistent belief in some business circles that:
“We’ll just buy green energy, that’s our contribution”.
But this has major limitations:
You are still part of the same grid pricing system driven by gas-powered marginal pricing.
You often pay a premium for certificates, not actual electrons.
You have no control over the volume of renewables actually generated.
Which is exactly why so many organisations stick with fossil-fuel-heavy non-green tariffs, even government departments supposedly dedicated to decarbonisation.
Why generating your own energy is always superior
When you invest in on-site renewable energy like solar PV, battery storage, even combined heat and power or other distributed assets, you accomplish three crucial things:
✔ You reduce reliance on the grid
That means you are no longer at the mercy of wholesale pricing spikes.
✔ You guarantee actual green energy production
Not certificates. Not accounting. Real generation on site.
✔ You unlock cost reduction and resilience as one combined outcome
And critically, that outcome can fund itself through sensible financing strategies. That’s what we call energy cost transformation: aligning Finance, Operations and ESG so that investment in energy becomes a strategic business lever not a discretionary cost.
So what’s the right strategy?
If you care about sustainability and cost reduction, then:
Stop paying someone else to claim you’re green. Start making your own energy, on your own terms.
Not because it looks good in a report. Not because a supplier tells you it’s “100% renewable”. But because you actually produce it. You control it. And you benefit from it financially, operationally, and environmentally.
Green tariffs are a stopgap, useful if you can’t generate, but expensive and often symbolic. Real energy transition happens when companies stop buying green electrons and start owning their own generation.
That’s not just a better way to reduce carbon. It’s a better way to cut costs.
And it doesn’t have to cost you anything, it’s far more strategic and puts you firmly in control of your own destiny.
Need help making this shift?
For many organisations the biggest obstacle isn’t ambition, it’s economics. If you’d like to explore how energy generation can be structured to be self-funding and cashflow positive, we can help you design a strategy that moves you from buyer to producer.
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