By the PPA Funding team Last updated
A green energy tariff makes the electricity you buy from the grid renewable, but it doesn’t make it cheaper — you still pay grid prices. A solar PPA generates your own power on site at a fixed rate below the grid, so it cuts both carbon and cost. Many businesses use both.
On-site solar PPA vs a green energy tariff at a glance
| Consideration | On-site solar PPA | Green energy tariff |
|---|---|---|
| Where the power comes from | Generated on your own roof | Bought from the grid, matched to renewables |
| Cost vs the grid | Fixed rate at least 30% below the grid | Usually at or above standard grid prices |
| Price certainty | Fixed for the term (~20 years) | Moves with the market at each renewal |
| Carbon claim | Physical, metered on-site generation | Contractual matching (quality varies) |
| Upfront cost | £0 — the funder pays for the system | £0 — it is only a tariff |
| Best for | Cutting cost and carbon with your own generation | Covering the grid power you still buy |
What a green tariff does
A green or renewable tariff means your supplier matches your usage with renewable generation, usually backed by certificates. It supports renewables and improves your reporting, but you still buy all your power from the grid at market-linked prices — so it does little for your bill.
What a solar PPA does
A solar PPA generates electricity on your own roof and sells it to you at a fixed rate guaranteed below the grid. That reduces both your carbon and your cost, and shields part of your bill from market volatility — with no upfront outlay.
They work well together
On-site solar covers a share of your demand cheaply; a green tariff can cover the rest of your grid draw with renewable supply. Together they give the strongest combination of cost savings and genuine decarbonisation.
This guide is general information, not financial or tax advice. Your circumstances determine what applies — please confirm with your accountant or advisor. Get a tailored proposal →
Frequently asked questions
Isn’t a green tariff enough to be sustainable?
It helps your reporting, but it doesn’t reduce how much energy you buy or what you pay. On-site solar physically generates clean power and cuts your cost — a more tangible step, and stronger evidence of real action.
Can I have both solar and a green tariff?
Yes, and many businesses do. Solar cuts the power you buy; a green tariff can make the remaining grid supply renewable. Together they maximise both savings and decarbonisation.
Related guides
- Commercial solar payback period: what to expect
- Is my business suitable for commercial solar?
- Understanding your business electricity bill
See our funding options, commercial solar and solar by industry pages.