EV owners miss out on savings & green benefits amid tariff confusion

Electric vehicle (EV) drivers in the UK are missing out on both financial and environmental benefits associated with specialist electricity tariffs, new research indicates. Analysis shows that not all tariffs marketed as '100% renewable' consistently deliver on their environmental claims, while a significant number of drivers are paying more than necessary to charge their vehicles at home.

Tariff gaps

EV-specific tariffs typically offer low off-peak rates overnight, allowing motorists to reduce running costs by charging when demand on the national grid is lower. These tariffs typically require a smart meter, allowing for price differentiation through time-of-use pricing.

However, recent findings show that 15% of EV drivers are not enrolled in such tariffs and are missing out on the associated cost savings. A further 7% of drivers are unaware of the tariff they are using. Charging a vehicle during peak hours can cost high-mileage drivers up to GBP £372 extra per year, according to industry research. Specialist EV tariffs can save motorists as much as GBP £1,240 annually compared to petrol-powered cars, with savings rising to GBP £1,780 for those with higher mileage.

Renewables claims

Not all electricity tariffs labelled as '100% renewable' source their power directly from renewable generators at all times. Some suppliers use Renewable Energy Guarantees of Origin (REGOs) certificates, trading them on a secondary market to justify these claims, even if the actual electricity supplied may include a mix of fossil fuel-generated power during specific periods.

An analysis using the Matched Clean Power Index indicates that out of eleven major providers of EV tariffs, seven supply renewable electricity less than 33% of the time. Some are listed as supplying no renewable electricity at all during certain hours. Current regulations only require suppliers to match the annual volume of certificates with total consumption, potentially resulting in consumers using fossil fuel electricity at times of low renewable generation, despite advertised green credentials.

New tariff details

A new time-of-use tariff targeting EV owners offers overnight charging at 6.6p per kWh between midnight and 5 am. The supplier reports that all energy for this tariff is matched with renewable electricity purchased directly from a network of 3,000 generators across the UK.

"Electric vehicle drivers are motivated by environmental concerns and financial savings, but many of them are missing out on both. There is a large disparity between the best and worst rates on the market if they want to capture the benefits of charging their car off-peak. And there is an even bigger disparity between the providers genuinely buying renewable electricity from generators, and those relying on a system using certificates and middlemen that can enable energy suppliers to buy most of your power from fossil fuels and sell it to you as '100 per cent renewable'," said Donna Slater, Head of Propositions and Pricing, Good Energy.

Slater added, "Our new EV tariff is for motorists who want peace of mind that their electricity is as renewable as it can be under the available infrastructure, and be able to charge their car overnight as cost-effectively as possible."

"Customers deserve more transparency around how suppliers source renewable electricity, which is one of the major roadblocks preventing British households and businesses from being able to play an active part in our net zero ambitions. We'd like the Government to mandate a much higher level of transparency so that people and businesses can be assured that choosing a green supplier helps to create a greener energy system," said Slater.

Consumer confusion

Research suggests that over half of consumers who are marketed tariffs as 100% renewable believe that all of their electricity comes from green sources. Three-quarters say there should be stricter rules for transparency in how suppliers market their green claims. Motivations for choosing an EV are divided between environmental reasons and cost savings, with each accounting for 48%. Convenience, vehicle performance, and access to low-emission zones also feature among the top reasons.