The energy industry regulator Ofgem is set to compel suppliers who offer 'green tariffs' to spend more on developing renewable energy sources.

Currently, around 350,000 UK households are signed up to a variety of green tariffs, though concerns have been expressed over recent months that they may often be paying a premium for such products to fund renewables initiatives, despite the fact that companies are legally required to invest money into green power anyway.

Under the new code of conduct to be launched by the watchdog this week, suppliers will be encouraged to demonstrate extra commitment to green energy projects so as to justify higher tariffs and, though the initiative will be voluntary at first, it has not ruled out making it compulsory within the next few months.

Alistair Buchanan, chief executive of Ofgem, explained: "We intend to shine a light on to suppliers' green offerings to show the customer why a tariff is green. We want suppliers to stop re-packaging their existing environmental activity as green immediately and to align their marketing with our guidelines."

Ofgem also has plans in place to appoint an independent body taked with accrediting green tariffs before the end of the year.