Its “green energy certified” label is designed to give users a real guide as to who is doing most to source renewable power.
The watchdog says the aim of the move is to reassure householders and small businesses that paying for green energy is actually worth it. Energy companies are committed to using more renewable power.
It adds that before the introduction of this new labelling plan, a supplier could claim to be helping the environment but in fact simply be meeting its existing promise to use renewable energy.
In a statement, the watchdog says: “Now, suppliers will have to demonstrate to an independent panel of experts that they are taking extra steps to cut their use of non-renewable power in order to merit the “green” label.”
Ofgem’s panel chairwoman, Solitaire Townsend, adds: “Only 2% of Britons currently buy green energy, but I hope that a trustworthy label will convince many more to go green.”
Last month, Npower faced a backlash after sending millions of low energy lightbulbs to UK households last week. The energy supplier was criticised by the Green Party for using unsolicited mail-outs of the low-energy bulbs to reach its target of cutting household energy use instead of investing in more effective measures.