But the report shows that the level of premium is crucial. While most UK green tariffs carry a premium of at least 5%, more than half (52.4%) say they would be unwilling to pay a premium of over 4%. Nonetheless, the overwhelming majority (90%) are well disposed to green tariffs, saying they would be happy to switch to one if no extra cost was involved.
Altogether, the report claims that just over 4.3 million customers are looking to switch suppliers in the newly liberalised UK electricity market. This means a potential yearly business of over £1 billion. Price is the most important differentiating factor between two different green tariffs, but endorsement by an environmental group and help with energy efficiency are also important.
The report finds that the level of interest in green tariffs varies across the country, but is highest in the more affluent south-enough to justify several competing tariffs. The key challenge for suppliers, says the report, will be how to differentiate their offerings from competitors, especially as more companies join in.