Green vs Tracker Tariffs: Which Is Best for Your Business in 2025?
As UK businesses face increasing pressure to cut costs and reduce their carbon footprint, choosing the right energy tariff has never been more important. Two options gaining traction in 2025 are green tariffs and tracker tariffs. But what do these tariffs actually mean for your business, and how do you decide which is right for you?
Follow our Energy Tariffs Explained blog series to find out more.
What Are Green Tariffs?
Green energy tariffs guarantee that some or all of the electricity you use is matched by renewable sources, such as wind, solar, or hydro. Suppliers either invest directly in renewable generation or purchase Renewable Energy Guarantees of Origin (REGOs) to “match” your usage. However, not all green tariffs are created equal, some are more genuinely sustainable than others.
Benefits for Businesses:
- Demonstrates your commitment to sustainability, which can enhance your brand reputation.
- May help you meet regulatory or supply chain requirements for carbon reduction.
- Some suppliers offer additional perks, such as carbon offsetting or investment in new renewable projects.
What to Watch Out For:
- Some tariffs are “greenwashed,” relying solely on certificates rather than actual renewable investment.
- Prices can be slightly higher, though competition is driving costs down.
What Are Tracker Tariffs?
Tracker tariffs link your business’s energy rates directly to wholesale market prices, which can fluctuate daily or monthly. This means your costs can go up or down in line with the market.
Benefits for Businesses:
- Potential to benefit from falling wholesale prices.
- Transparent pricing that reflects real market conditions.
- No long-term lock-in, offering flexibility.
What to Watch Out For:
- Exposure to price spikes, especially during periods of high demand or market volatility.
- Budgeting can be more challenging due to unpredictable bills.
Green vs Tracker: Which Should You Choose?
- Choose a green tariff if your business prioritises sustainability, wants to appeal to eco-conscious clients, or needs to meet environmental targets.
- Choose a tracker tariff if you’re comfortable with some risk and want to potentially save money when market prices fall.
Both green and tracker tariffs offer unique advantages for UK businesses in 2025. The best choice depends on your company’s values, risk appetite, and operational needs. Always compare the fine print and ask suppliers about the true source of their “green” energy before making a decision.
Think your business may have overpaid on energy bills? A recent court ruling means you could be entitled to reclaim hidden broker fees or mis-sold contracts.
Contact Business Energy Claims today to find out if you’re eligible to make a claim.