Consumers and home workers considering moving to so-called green energy tariffs are being urged to thoroughly assess the environmental validity of their electricity suppliers' schemes after a report last week warned that many green tariffs fail to live up to the environmental benefits claimed.
The study from the National Consumer Council (NCC) and consumer watchdog energywatch said that while interest in green tariffs is growing many of the environmental schemes available are too complex and guilty of overselling their environmental benefits.
The report - entitled Reality or Rhetoric? Green tariffs for domestic consumers - argues that while most energy suppliers now offer a green tariff the effectiveness of these schemes vary enormously.
According to the report, only some schemes work by ensuring all energy bought under the higher tariff is covered by power bought from renewable energy sources – which is what many people would expect from a green tariff.
Meanwhile, other green tariffs work by the supplier investing the premium the customer pays into renewables or energy efficiency projects. In some cases this sum is matched by the supplier, though this is not always the case. Further schemes work through carbon offsetting, where the supplier pledges to offset some or all of the energy the customer is using.
This confusion allows some firms to oversell the "greenness" of their tariffs, according to the report, letting consumers think they are dramatically reducing their environmental impact when their suppliers' ill thought out carbon offset schemes or small scale energy efficiency investments mean this is not the case.
NCC and energywatch said there was an urgent need for energy suppliers to be more transparent about how their green tariffs work.
"With consumers increasingly trying to do their bit for the environment, switching to a green tariff should be a simple way for them to make a difference," said Lord Larry Whitty, the NCC’s chairman. "But our investigation shows that it’s too easy for consumers to be confused and misled… That’s why we’re calling for a shake up in how companies market and sell their green tariffs, and for them to offer bigger environmental benefits. Even the better tariffs would only cut the CO2 emissions of a typical household by around 6 per cent."
Adam Scorer, energywatch director of campaigns, said that the watchdog had launched a new online guide designed to make it easier for consumers to compare the benefits of different suppliers' green tariffs.
But he added that the suppliers still needed to open their schemes up to independent scrutiny if they wanted to encourage greater customer confidence in their new green tariffs. "Together with NCC, energywatch will be pressing energy suppliers to sign up to minimum standards for green claims and have their tariffs and CO2 savings independently audited," he said. "That would mean no more unsubstantiated claims, and clear, accurate, comparable information about the environmental benefits offered and the carbon emissions saved if a customer signs up."
While the report focuses on consumer tariffs the same concerns are also likely to apply to many green tariffs aimed at business customers. As a result recommendations that customers should check the environmental credentials of their green tariffs apply just as much to the corporate world as they do to household customers.
"These are issues that need to be flagged up to the business community," said a spokeswoman for energywatch. "There is not enough transparency in the domestic market and the business market is even more complex. Corporate customers need to ask questions about what they are getting from a green tariff and make sure that everything is in the contract."
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