What does US politics have to do with the price of REGOs?
Discover the three factors behind the recent REGO price drop.
For years, Renewable Energy Guarantees of Origin (REGOs) have been a quiet but critical part of the UK energy market. They sit behind the “100% renewable” claims on electricity tariffs and play a role in how energy suppliers evidence their sustainability credentials.
But recently, REGO prices have taken a dramatic turn. From highs of more than £15/MWh in October 2023, prices have collapsed to around £0.30/MWh just two years later – a staggering 97% drop between the two compliance years.
So what happened? Why did prices spike so sharply, why have they fallen so far, and what does any of this have to do with US politics? More importantly, what does this mean for renewable tariffs and the future of the market?
The rise and fall of REGOs over the years
Why did REGO prices rise so much in 2023?
The sharp increase in REGO prices in 2023 was driven by a perfect storm of policy, supply constraints and surging demand.
First, the failure of Allocation Round 4 (AR4) of the Contracts for Difference (CfD) scheme created uncertainty about the future pipeline of renewable generation in Great Britain. AR4 secured far less new capacity than previous rounds, while several projects from earlier rounds were delayed in coming online. The result was growing concern that future REGO supply would be tight relative to demand.
Second, a major rule change came into effect on 1 April 2023: suppliers were no longer allowed to use EU Guarantees of Origin (GOOs) to meet UK Fuel Mix Disclosure requirements. Overnight, a large source of supply disappeared, forcing suppliers to rely solely on UK-issued REGOs. This sudden tightening of supply created a significant market shock.
Finally, demand was strong. Consumer and corporate appetite for renewable energy was high, with suppliers under pressure to substantiate green tariff claims. For every megawatt hour of “green” electricity sold, a REGO was required. Scarcity met enthusiasm, and prices surged.
Why did REGO prices fall so far in 2025?
The reversal has been just as dramatic, driven by three main factors.
The first is weakening demand. In a tougher economic climate, consumer interest in green tariffs has softened. At the same time, many large corporations are rethinking how they decarbonise. While REGOs are a UK scheme, corporate behaviour is global. Shifts in US climate politics have influenced multinational sustainability strategies, with some firms scaling back voluntary green commitments. Many of these US-headquartered companies operate in the UK, so changes driven by US political signals can directly reduce UK demand for REGOs, even without any formal policy link.
Second, supply has improved. Allocation Round 6 (AR6) restored confidence in the renewable pipeline, and overall renewable generation capacity in Great Britain continues to grow. Every eligible MWh of renewable electricity generates a REGO, and as more projects come online, the market has moved into oversupply. This imbalance is expected to persist into 2026.
Third, businesses and suppliers are increasingly choosing alternatives to REGOs. Direct Corporate Power Purchase Agreements (PPAs) with renewable generators are seen by many as more transparent and impactful. As a result, REGOs are no longer the default route for making green claims, further depressing demand. The outlook for prices remains flat to bearish.
What do falling REGO prices mean for “100% renewable” tariffs?
Low REGO prices have consequences. When certificates are cheap, it becomes easier – and cheaper – to badge largely non-renewable supply as “100% renewable” on an annual basis. This provides less financial support to renewable generators and further undermines the original purpose of REGOs as an accounting mechanism linked to real generation.
This could signal a return to more widespread greenwashing. More tariffs can legitimately claim to be “100% renewable” on paper, even if the electricity supplied is poorly matched to renewable generation in real-time. Independent analysis, such as by the newly published Matched Clean Power Index, increasingly highlights the gap between annual claims and half-hourly matching, exposing how misleading some green labels can be.
At Good Energy, we continue to buy REGOs alongside the power we supply, ensuring genuine support for over 3,000 independent renewable generators. We also pay a premium above the market rate – currently an additional £0.20 per REGO for bioenergy technologies and £0.30 for wind, solar and hydro. Despite this commitment, falling REGO prices still hurt generators, particularly smaller ones without long-term contracts, as they reduce income and can affect project viability.
How should the renewable energy market be reformed?
We believe reform is essential to provide the transparency that consumers and businesses deserve – and to help build a low carbon grid that truly reflects how people are using energy.
Firstly, REGOs should be re-coupled with the renewable power they represent, rather than traded as detached certificates.
And secondly, suppliers should be required to publish time-matched scores that show how well customer demand aligns with renewable generation on a half-hourly basis. Tools like the Matched Clean Power Index are a strong step forward, but voluntary initiatives are not enough. Regulation is needed so consumers and businesses can clearly understand what they are buying without having to do their own additional research.
The collapse in REGO prices reflects deeper political, corporate and structural issues in how “renewable” electricity is defined. While reform is needed to restore trust, businesses can act now by choosing suppliers that back renewable power with real generation and transparent time-based reporting.
For those seeking genuinely green power – not just low-cost certificates – Good Energy provides a credible way to cut emissions and support UK renewable generation.
