Exploring Payment Innovations for Sustainable Energy

Many people assume that the biggest challenge in the transition to sustainable energy is a technology and scale problem — better solar panels, cheaper batteries, smarter grids. And while those things matter, they are only part of the story.

Just as critical, and far less visible, is the role that payments play in this journey.

By sustainable energy here, I’m referring to energy sources that can be used long-term without depleting natural resources and with minimal environmental impact — think solar, wind, and small-scale hydro.

How payments are designed and deployed determines who can afford these energy sources, how easily people can switch to cleaner options when they want to, and perhaps most importantly, how everyday financial behaviour can surface and support more sustainable choices. As energy costs continue to rise and volatility in traditional energy markets persists (e.g., in Europe following the disruptions caused by the Russia–Ukraine war), payment innovation is increasingly emerging as a credible lever for accessibility and inclusion.

So why payments?

What most people don’t consciously realise is that payments sit at the centre of daily life. Every household bill, every commute, every business transaction relies on financial infrastructure. Because of this ubiquity, payment systems are uniquely positioned to spread upfront energy costs over time, quietly encourage more sustainable behaviour, and do so without requiring active effort from consumers. Many of the trends we’re seeing today achieve at least one of these outcomes.

Let’s look at how this is taking shape in the UK and globally.

Instalment Payments: Making Energy More Affordable

Energy affordability remains a major challenge almost everywhere. In the EU, up to 16% of people experience energy poverty. In the UK, around 36% of households spend more than 10% of their income on energy, making it the second-largest household expense after housing.

Payment technology is beginning to address this through two main models.

Buy Now, Pay Later (BNPL) and instalment financing have become particularly prominent in recent years. These models allow households to split the cost of solar panels, heat pumps, or home batteries into manageable monthly payments, rather than facing a significant upfront expense. Companies such as Hometree Finance, Heatable (with a BNPL-style approach), and Enpal (with subscription-style solar and heating systems) are leading examples of this shift.

Pay-As-You-Go (PAYG) energy takes a slightly different approach, allowing users to pay only for what they consume, often in small increments. While this model is most established in off-grid markets across Africa, variations are now emerging in Europe through smart meters, EV charging, and flexible energy tariffs.

Together, these models lower the barrier to entry and make clean energy adoption a realistic option for more households.

Green Payment Cards: Nudging Sustainable Behaviour

In the UK, 97% of adults hold a debit card, and around 67% hold a credit card. That level of penetration creates a powerful opportunity to influence behavior at scale.

Green payment cards — typically debit or credit — are designed to encourage more sustainable choices. This can take the form of recycled or bio-based card materials, tree planting linked to spending thresholds, cash back on low-carbon purchases such as public transport or EV charging, or rewards for shopping with sustainable merchants. Examples include bunq (which links tree planting to card spend), Amalgamated Bank (with climate-aligned debit products), and FutureCard (which offers higher rewards for climate-friendly purchases).

While many early green card products struggled to achieve long-term profitability (and I’ll dive into this in another post), they demonstrated something important: payments can meaningfully shape everyday sustainability choices when embedded into familiar financial tools.

Carbon Footprint Calculators in Banking Apps

Around 82% of UK adults recognise that they have a personal role to play in reducing their carbon footprint. Yet many also say they lack the tools to understand the impact of their spending. This is a problem because understanding impact is the first step toward meaningful change.

Banks are increasingly responding by partnering with fintechs to embed carbon footprint calculators directly into digital banking apps. These tools use spend data and machine-learning models to estimate the emissions associated with individual purchases. Providers in this space include Doconomy, Genify, Enfuce, Greenly, and Greenway.

These tools are not without limitations. Much of the data is still based on averages, and significant work is ongoing to improve accuracy and granularity. Even so, this marks an important shift in how people can begin to understand the environmental impact of their everyday purchase decisions.

Carbon Offset Donations Embedded in Payments

Despite growing awareness, only around 11% of UK adults have used a carbon offsetting service, even though many more are familiar with the concept.

This is where payments can help close the gap. By embedding offsetting options directly into the payment flow — for example, adding an offset option at checkout or rounding up purchases to fund carbon removal projects — participation becomes almost effortless. This is personally one of the most interesting trends for me.

Examples range from airlines such as British Airways and Lufthansa, to platforms like Stripe Climate and Adyen specifically offering this service for businesses, Klarna and Shopify for retail, and Mastercard’s Priceless Planet Coalition for card issuers.

The ongoing challenge is ensuring the quality of carbon credits and avoiding greenwashing. But from an engagement perspective, payments make participation in climate action genuinely frictionless.

Embedded Payments in Energy Platforms

Energy companies are also increasingly embedding payments and financing directly into their digital experiences. Embedded payments is a growing trend across the payments industry more broadly, and energy is no exception.

This shows up through in-app or online financing at checkout, subscription-style energy services, and even carbon-linked incentives right within B2B payment platforms. Examples include Cloover, which focuses on embedded finance for electrification, and Octopus Energy, with its integrated financing, smart tariffs, and solar offerings.

When done well, embedded payments make sustainable energy feel simpler and less intimidating — and they offer energy providers a powerful way to increase customer stickiness.

Sustainable Supply Chain Payments

Corporate pressure is also accelerating change. Today, 88% of S&P 500 companies disclose Scope 1 and 2 emissions, and around 70% report Scope 3 (supply-chain) emissions.

This has given rise to sustainable supply-chain payments, where procurement platforms link supplier payments, sustainability ratings, and energy data. The goal is to identify suppliers using renewable energy and reward them through faster payments, better financing terms, or preferential procurement status. Partnerships such as EcoVadis and SAP Taulia, as well as Coupa’s integration of ESG insights into procurement workflows, illustrate how this is taking shape.

This is a trend I find particularly compelling. Payments become an incentive mechanism, not just a reporting tool — and they begin to bring some clarity to the notoriously murky world of Scope 3 emissions (the largest category of emissions for any company).

Closing Thoughts

The energy transition is not only about generation and grids. It is about access, affordability, and behaviour.

Payment innovation — from instalments and embedded finance to carbon tracking and sustainable supply-chain payments — is quietly shaping who participates in the transition and how quickly it happens.

As sustainable energy becomes central to economic resilience, payments will increasingly act as an enabler that turns climate ambition into lived reality.

Done well, payment innovation doesn’t ask people to care more about sustainability. It simply makes sustainable choices easier, cheaper, and more natural. That’s part of what makes this space so compelling. And given how under-explored it still is, we need more payments professionals working in energy — and more energy professionals working in payments.

Bridging that gap gives us a far better chance of taking these ideas from niche to mainstream.

This content was originally shared as a webinar with Energyz Black, a UK-based non-profit organization that supports Black talents to start, grow and thrive in the UK’s sustainable energy industry