Scope 2 emissions, briefly
Under the GHG Protocol — the global standard for corporate emissions accounting — every organisation’s emissions are categorised into three scopes. Scope 1 covers direct emissions from sources the organisation controls (boilers, vehicles, refrigerants). Scope 3 covers indirect emissions across the value chain (supplier emissions, employee commuting, business travel). Scope 2 covers indirect emissions from purchased energy — primarily grid electricity.
For most UK office occupiers, Scope 2 represents 60-90% of total Scope 1+2 emissions. The driver is the carbon intensity of UK grid electricity, which currently averages around 0.21 kg CO₂e per kWh under location-based methodology — meaning a typical 1 GWh-per-year office generates around 210 tonnes of Scope 2 emissions annually.
On-site solar PV is the single most material Scope 2 reduction available to most offices. Replacing grid electricity with on-site renewable generation reduces Scope 2 emissions by the kWh generated × the grid emissions factor for the relevant year.
Location-based vs market-based reporting
The GHG Protocol Scope 2 Guidance allows two methods of reporting Scope 2 emissions: location-based and market-based.
Location-based uses the average emissions intensity of the grid in the geography where the electricity is consumed. For UK consumption in 2024, this is around 0.21 kg CO₂e/kWh based on DEFRA conversion factors. Every kWh of grid electricity avoided reduces location-based Scope 2 emissions by 0.21 kg.
Market-based uses contractual instruments — REGOs (Renewable Energy Guarantees of Origin), GO certificates, PPAs, on-site generation — to claim specific emissions factors per kWh purchased. A site running on a 100% renewable tariff with full REGO coverage can claim 0 kg CO₂e/kWh under market-based, regardless of the underlying grid mix.
For on-site solar, both methods credit the generation. Location-based recognises the avoided grid kWh. Market-based recognises the on-site generation as zero-emission. The GHG Protocol requires dual reporting (both location and market-based numbers) for full disclosure.
What FTSE-tenant audits expect
We’ve delivered Scope 2 documentation packs for over 60 commercial office solar installations, including builds whose customer has a FTSE-100 tenant requiring Scope 2 disclosure under their own supplier audit. The audit expectations have converged on roughly the following package:
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Location-based emissions calculation: kWh generated × DEFRA conversion factor for relevant year, with citation of the specific factor used and DEFRA publication reference.
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Market-based emissions calculation: kWh generated × zero, with REGO certificate handling explanation (whether the on-site generation is REGO-certified or claimed on the basis of physical traceability).
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REGO handling clarification: Whether the system claims REGO certification (rare for small-medium commercial), whether REGOs are surrendered against on-site consumption (often, for SEG-registered installs), or whether the claim is on physical traceability grounds (common where the generation is consumed entirely on-site).
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Generation evidence: Annual kWh generation from the system’s monitoring software, with monthly resolution and string-level performance data on request.
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SECR-ready narrative: A short paragraph suitable for inclusion in the customer’s SECR mandatory reporting block, covering the system specification, generation, and emissions impact.
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CDP Climate Change response text: Pre-populated text for CDP questions C6 (emissions) and C8 (energy) related to on-site renewable generation.
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SBTi alignment statement: Where the customer has SBTi-validated targets, a statement confirming the install supports the 1.5°C-aligned pathway.
What we provide
For every commercial office solar installation we deliver, the Scope 2 Disclosure Pack is included in the commissioning documentation. The pack covers all seven elements above, with annual updates available on request to reflect changing DEFRA conversion factors and updated generation data.
For customers with multi-site portfolios or particularly demanding tenant audit requirements (large FTSE-100 supplier programmes), we can also provide:
- TCFD disclosure text for premium-listed UK customers
- Carbon Reduction Plan PPN 06/21 input data for customers tendering for UK government contracts >£5m
- Greening Government Commitments evidence for public-sector customers
- B-Corp B Impact Assessment scoring inputs
The reporting work isn’t an add-on — it’s part of how we structure proposals from the outset. Customers who treat ESG reporting as a downstream consideration often find their solar install needs retrofit documentation work months after commissioning. We build it in from day one.
Request a free feasibility study including ESG documentation scoping.
Market-based vs location-based: the reporting choice and its implications
The GHG Protocol Scope 2 Guidance requires companies to report Scope 2 emissions under both location-based and market-based methods — but allows them to present one as the headline figure in sustainability reporting. Understanding the difference matters because the choice significantly affects reported emissions.
Location-based reporting (UK 2025): Grid emission factor: approximately 0.21 kgCO2e/kWh (DEFRA Conversion Factors 2025, electricity purchased) A 1,000 sqm office consuming 200 MWh/year: 200,000 kWh x 0.21 = 42 tonnes CO2e/year (Scope 2, location-based)
Market-based reporting: If the organisation has a 100% renewable electricity tariff with full REGO (Renewable Energy Guarantees of Origin) coverage: emission factor 0.0 kgCO2e/kWh Same office: 0 tonnes CO2e/year (Scope 2, market-based)
If the organisation has a green tariff but without bundled REGOs (common in UK business energy contracts): emission factor reverts to the residual mix factor, approximately 0.29-0.34 kgCO2e/kWh in the UK (residual mix is higher than average because renewable-attributed electricity has been claimed elsewhere)
How on-site solar fits the market-based picture: On-site solar generation is a zero-emission energy source under both methods. Under market-based reporting, self-consumed generation displaces grid electricity at the applicable emission factor. The documentation required to claim zero-emission for on-site generation depends on REGO treatment:
- If the installation is REGO-certified and REGOs are surrendered against on-site consumption: zero-emission claim fully supported
- If REGO-registered but REGOs are sold separately (common where SEG income is via an SEG licensee that holds REGOs): the zero-emission claim reverts to the residual mix factor for that portion. This is a common mis-understanding in corporate sustainability reporting.
- If not REGO-certified (systems below MCS threshold or where REGO registration was not pursued): physical traceability claim under Scope 2 Guidance Annex B applies — acceptable for small systems consumed entirely on-site with documented commissioning records.
For most commercial office solar installations, we recommend pursuing REGO registration and confirming with the SEG licensee that REGOs are surrendered (not sold separately). This provides the cleanest zero-emission claim under market-based methodology.
What RE100, SBTi, and CDP specifically require
The three major voluntary corporate sustainability commitments have distinct requirements for how on-site solar is counted.
RE100. The RE100 initiative (comprising companies committing to 100% renewable electricity) requires electricity claims to be backed by market instruments — specifically REGOs/GOs in the UK/EU, or equivalent instruments globally. On-site solar qualifies if REGO-certified. Unbundled REGOs (REGOs purchased separately from generation) also count. Self-reported physical generation without REGO backing does not count toward RE100 targets under the Technical Criteria.
Science Based Targets initiative (SBTi). SBTi’s methodology for Scope 2 (Corporate Manual v4.1 and FLAG guidance) requires companies to:
- Achieve absolute Scope 2 reductions of at least 4.2% per year to align with a 1.5 degree pathway
- Prioritise actual zero-emission energy sources (on-site generation, energy attribute certificates) over purchased offsets
- Report dual disclosure (location and market-based) with the market-based figure used as the primary compliance metric
On-site solar directly reduces market-based Scope 2 emissions and counts toward SBTi targets when REGO-backed. The SBTi explicitly rates on-site generation as the preferred intervention (over REGO purchase) because it creates new renewable capacity rather than simply attributing existing capacity.
CDP Climate Change questionnaire. CDP requires Scope 2 dual disclosure (mandatory since CDP questionnaire v9, 2017). In CDP C6.3 (Scope 2 emissions), companies report both location-based and market-based totals. In CDP C8.2 (Energy consumption), companies report on-site electricity generation separately.
Specific CDP questions where solar installation data is required:
- C8.2a: Total on-site electricity generation (kWh)
- C8.2b: Renewable generation claimed (kWh) and methodology (physical traceability / REGO)
- C6.3: Location-based Scope 2 (kgCO2e)
- C6.5: Market-based Scope 2 (kgCO2e)
We pre-populate all four data points in the Scope 2 Disclosure Pack delivered at commissioning.
Documenting solar generation for GHG Protocol compliance
The GHG Protocol Scope 2 Guidance (Chapter 7) specifies the evidentiary standard for claiming zero-emission on-site generation. For UK commercial solar:
Required documentation:
- MCS installation certificate (confirms system capacity and installation quality)
- Annual generation data from certified metering (half-hourly meter data from the export/generation meter, or inverter portal data supplemented by independent calibration check)
- REGO certificate evidence (if claiming REGO-backed zero-emission factor): surrender confirmation from Ofgem REGO database
- Self-consumption evidence (demonstration that claimed generation was consumed on-site rather than exported): difference between total generation and export meter readings
Annual process for GHG Protocol compliance:
- January: Retrieve previous calendar year generation data from monitoring system
- February: Download DEFRA Conversion Factors (updated annually, typically published March-April for previous year — use interim estimate for year-end reporting)
- March: Calculate location-based and market-based Scope 2 figures
- March-April: Include in SECR mandatory report (if the organisation meets the qualifying threshold: large/quoted UK companies or companies with >250 employees)
- June: Submit updated data to CDP questionnaire (typical CDP annual cycle)
- Rolling: Update SBTi progress tracking
The annual process takes approximately 4-8 hours of finance/sustainability team time once the initial documentation package is in place.
TCFD framing: physical risk and transition risk
Mandatory TCFD (Task Force on Climate-related Financial Disclosures) reporting for premium-listed UK companies since 2022, expanding to all large UK companies progressively, requires disclosure of climate-related risks in two categories: physical risks and transition risks. Solar installation affects both categories.
Physical risk (climate-related impacts on the building itself): Solar PV systems add climate resilience by reducing dependence on grid electricity for critical building functions. In TCFD physical risk terms, a building with on-site solar + battery storage has reduced exposure to:
- Grid outage risk from extreme weather events (flooding, storms damaging transmission infrastructure)
- Demand-surge risk from heat events (solar generation peaks with cooling demand)
- Energy price volatility from supply disruptions
The TCFD disclosure should note the resilience benefit explicitly in the physical risk section.
Transition risk (regulatory and market changes from the transition to low carbon): The main transition risk for commercial property is MEES 2030 compliance — the regulatory obligation to achieve EPC-B or face unlettability. Solar installation directly reduces transition risk exposure by improving EPC rating and reducing operational emissions. The TCFD disclosure should quantify:
- Pre-solar EPC rating and MEES compliance gap
- Post-solar EPC rating and compliance status
- Scope 2 emissions reduction (a transition risk metric)
For premium-listed UK companies, the TCFD climate-related risk and opportunity section of the Annual Report is increasingly scrutinised by institutional investors. Solar installation is a high-visibility, quantifiable positive action that strengthens the TCFD narrative.
What we provide
For every commercial office solar installation we deliver, the Scope 2 Disclosure Pack is included in the commissioning documentation. The pack covers:
- Location-based Scope 2 calculation with DEFRA factor citation
- Market-based Scope 2 calculation with REGO treatment documentation
- REGO handling clarification and registration confirmation
- Annual generation evidence baseline (first year from commissioning)
- SECR-ready narrative block
- CDP C6.3, C6.5, C8.2 pre-populated response text
- SBTi alignment statement
- TCFD physical risk and transition risk narrative contributions
Annual updates are available at no cost for the first 3 years (updated DEFRA conversion factors, updated generation data) then at a standard annual retainer of 400/year per site for customers with active corporate sustainability reporting obligations.
Key takeaways
- Location-based reporting uses the grid average emission factor (approximately 0.21 kgCO2e/kWh in 2025); market-based uses contractual instruments (REGOs for on-site solar)
- REGO registration and surrender (not sale) is required to claim zero-emission factor under market-based methodology and to satisfy RE100, SBTi, and CDP requirements
- CDP requires dual Scope 2 disclosure (C6.3 location-based, C6.5 market-based) plus separate on-site generation reporting (C8.2)
- TCFD reporting benefits from solar installation on both physical risk (grid resilience) and transition risk (MEES compliance, emissions reduction) dimensions
- Our Scope 2 Disclosure Pack is included in commissioning documentation and covers all seven reporting requirements — no retrofit documentation work needed after commissioning