Green suppliers, the energy crisis and rising energy costs

With the need to transition to renewable energy clear, how do green energy suppliers fare? Should you switch to a green tariff now? And what green steps can consumers take to lower energy bills?

What impact is the Iran war having on energy prices?

Since Israel and the US began bombing Iran in February 2026, global energy prices have significantly increased. In the UK, the impact is already being seen in high petrol prices, and are likely to be followed by rising energy bills.

Israel has attacked Iran’s largest gasfield, while Iran is also bombing energy infrastructure in several Gulf States due to the countries’ alliances with the USA. However, the key cause of rising energy prices is Iran’s move to block the Strait of Hormuz – a sea passage between the country and the Gulf, which is one of the largest oil shipping routes worldwide.

Twenty percent of the world’s oil and liquified natural gas (LNG) previously passed through the Strait. But since the war, the number of ships taking the route has dropped from well over a hundred a day to just a small handful.

As a result, the research organisation Cornwall Insight estimates that for UK businesses, electricity costs have increased by between 10% to 30%, while gas prices have soared by between 25% and 80%.
 

Why did energy bills increase so much in 2022 and 2023?

It is not the first time energy costs have rocketed in recent years. Household energy bills soared during the peak of the energy crisis in 2022 and 2023, reaching over £2,500 a year for many UK households in early 2023. Prices are now considerably lower than that peak, but they remain 50% higher than in the summer of 2021, before Russia’s invasion of Ukraine.

The high costs were caused by soaring gas costs: at the worst point, wholesale gas prices increased fourfold over a twelve month period, and they still remain roughly 1.5 - 2 times higher than 2021 levels. 

Russia’s invasion of Ukraine was a significant trigger for the crisis, as Russia had long been the world's largest natural gas exporter. But gas costs were already on the rise before the invasion. 

Gas is traded around the world, imported from country to country. This means that prices are linked to global supply and demand, and vulnerable to volatile world events (such as Russia’s invasion, and Israel and the USA bombing Iran). In the years before Russia’s invasion, demand for gas was already rising in Asia. At the same time, supply was falling as Europe’s gas fields emptied and Russia’s largest gas company cut the amount it sold. 

The energy crisis hit UK households worse than any other country in Western Europe because of our over-dependence on fossil fuels. The vast majority (84%) of UK homes still rely on gas for heating. The UK also generates 33% of its electricity from gas, compared to only about 20% in the EU. 

How much did UK consumers pay for the energy crisis?

Due to these high costs, households have had to spend an extra £59 billion on gas, electricity and road fuels since 2021.

The UK government sets a maximum amount that suppliers can charge you for your tariff, known as the energy price cap. The cap partially protects us from volatile wholesale prices. But in April 2022, the UK government increased the cap by a massive 54% to better reflect the energy market. The government increased it again in 2023 to a whopping £4,279 a year, but offset some of these costs with other measures to ensure the full hike never hit consumers. 

The price cap has drastically fallen since. Between October and December 2025, it is set at £1,755 per year. But experts warn that it is not likely to return to pre-crisis levels any time soon. 

It’s worth noting that this is an average, and not a fixed price for your total bill: if you use more energy than the average household, you will be charged more than this. 

How are green energy suppliers affected by the energy crisis?

Over their whole lifetime, wind and solar energy are now 40-50% cheaper to produce than energy from fossil fuel powered plants. 

However, under the rules that govern the UK energy market, a single price is basically paid for all electricity, which means that the price is set by the unit with the highest running cost – and therefore from gas. 

This means that you’ll likely pay the same for a 100% renewable tariff as for a conventional one. 

In 2022, the UK government said that it was working to break the link between renewable energy and gas prices. But no concrete action has yet been taken, so for now, renewable tariffs are just as affected by the energy price crisis as fossil fuels.

The cost of renewable energy tariffs

The energy crisis is having a real impact on people’s day-to-day wallets. At its peak, the average UK household was expected to lose 8.3% of its spending power from paying higher energy bills. An estimated 12 million households are struggling with the cost of their energy bills.

Finding an affordable green supplier is therefore important. So is it possible?

When you choose a renewable energy supplier, you are not actually changing the electricity that turns on your light. All energy is supplied to UK homes via the national grid. In the grid, all different kinds of energy supply are mixed up and combined: think of it as a pot for wind, nuclear and gas. 

When companies claim to be selling ‘renewable tariffs’ they can mean two different things. Either, they can mean that they buy certificates called REGOs that say their energy came from a renewable supply. This does next to nothing to actually increase the amount of renewable energy we have in the UK, so we consider them to be pretty meaningless. 

We consider these to be slightly more meaningful green tariffs, although it is worth noting two things: firstly, when you use energy at home, the same amount will come from fossil fuels whatever tariff you’re on. And secondly, because subsidies and costs are also shared between all the companies, you may not be providing renewable energy with a huge amount more money. 

Ofgem has given three companies – Ecotricity, Good Energy, and 100Green – an exemption from the energy price cap on the basis that they were making a meaningful difference to renewable development.

All three companies are still tied to high fossil fuel prices, due to the way energy costs are set in the UK. So once you add this to the cost of their investments in renewables, their tariffs can therefore cost more than other price-capped providers (although this is not always the case). 

If the renewable tariff is a bit more expensive, and you can afford it, we think it is worth supporting these or any other companies that are investing in renewables and do not use fossil fuels. You can compare prices of electricity in pence per kilowatt hour on energy companies websites, and what their daily standing charge is. 

However, you may decide that there are better or cheaper ways to spend ethically, given the limitations of the energy market. 

Should I switch to a green supplier?

As explained above, for many people it can feel important to switch to a company that is investing in renewables. Our guide to energy suppliers lists our Best Buy and recommended green providers. 

In the past, switching tariffs has also been one of the easiest ways to save money on your energy bill. These days it’s more complicated, and you’ll need to look at what providers are offering compared to your current tariffs. 

There are two main types of tariff: fixed and standard variable. With a fixed tariff, you are guaranteed a certain price for your energy over a fixed period, usually one year. With a variable tariff, the price of your energy tracks the market (which in the UK is set by the government’s price cap). MoneySavingExpert has a useful article here about whether to choose a fixed or variable tariff. 

Green energy tariffs can sometimes be good value for money. For example, when we checked in December 2025, Ecotricity offered one of the best value fixed rate tariffs, according to MoneySavingExpert. 

Using a price comparison site like USwitch, Go Compare, Money Supermarket or MoneySavingExpert can help you to compare the costs of the best green companies to mainstream suppliers. Citizens Advice also has a step-by-step guide to switching energy suppliers.

Can renewable energy help the energy crisis?

Transitioning the UK’s energy supply to renewables is crucial, from the perspective of both tackling the country’s energy costs and addressing the climate crisis. 

The UN Global Crisis Response Group says, “In the medium-to-long-term, the world needs to double down on renewables to meet net-zero goals, tackle energy poverty, and boost and diversify the global energy mix.”

What can consumers do?

While consumer tariffs cannot drive this change alone, political action will be vital for a fair transition to take place. Luckily, there is much that consumers and campaigners can do to support this political momentum, and we share just a few ideas below. 
 

1. The Climate and Nature bill

This bill would require the United Kingdom to achieve climate and nature targets, and give the Secretary of State a duty to implement a strategy to achieve those targets.

First introduced in Parliament by former MP Caroline Lucas in September 2020, it now has the backing of over 190 parliamentarians representing all major political parties.

Its website (www.zerohour.uk) lists ways to support the campaign – from signing petitions to joining events.
Ethical Consumer is a supporter. We think it is one of the best ways to get formal government support for key actions highlighted in our Climate Gap Report (our annual research into whether consumer action is on target to help meet international climate goals). 

It is building a big coalition outside Parliament with 380+ supporting councils and 960 supporting organisations including:

• Co-operative Bank
• Friends of the Earth
• Greenpeace
• Lush
• National Trust
• Oxfam
• Surfers Against Sewage
• The Wildlife Trusts
• Triodos Bank
• UK Youth Climate Coalition
• Women's Institutes of Northern Ireland.
   

2. United for Warm Homes

Friends of the Earth is running this project to support people to set up local campaigns in their own communities (for England and Wales). The initial focus is based on building support for urgent action on warm homes in each area. 

By working with food banks, housing groups and climate activists, the organisation says that it aims "to build powerful coalitions that force our government to take decisive action on the energy crisis". The project’s website has a step-by-step guide to creating local campaigns and other resources.

See: unitedforwarmhomes.uk

3. The Great Homes Upgrade

Initiated by the New Economics Foundation, the campaign calls for a coherent national retrofit programme for insulation and clean energy. Supporters include local authorities like Bristol and Leeds, businesses like the Carbon Co-op and First Thermal, and civil society groups like Citizens UK and Greenpeace.

They are looking for donations and for supporters to build local coalitions and to eliminate damp in houses, create jobs, and save families money.

See: greathomesupgrade.org
 

4. Consider home generation 

Generating electricity at home won’t be an immediate step to addressing the energy crisis: it’s a big investment, and takes time to pay off. However, for those who can afford it, it’s a great way to make your own energy transition. 

Heat pumps are crucial to decarbonising the UK. They essentially use heat from the air or ground outside your home in order to warm it. Our guide on heat pumps includes steps to consider to help you find an ethical company. We also have a guide to solar panels, which can be a great option for for domestic energy production.

Or you may have a community energy scheme which you could join.

This is an update to the article originally published in 2022.