When it comes to purchasing green power to power your home and business there are many options available from buying green power from a competitive supplier to participating in utility green power programs. The article below explains in the detail the numerous options available for consumers.
Contact: David Roberts
Many people would like to support renewable energy, not just through activism or lobbying politicians but with their pocketbooks. So can you, the average American consumer, buy electricity generated from clean sources?
Yes. But it’s complicated. Like anything worth doing in life, your impact will vary with the amount of time, effort, and money you’re willing to invest.
There are cheap and easy ways to get “green power,” or at least the legal right to say you’ve gotten it. But if you actually want to play a part in getting new renewable energy generators built, you’ll have to do some organizing and studying (or have the luck to live near, or work for, someone who has).
If you want to buy green power, it’s all about RECs
As I discussed at length in a previous post, all green power purchases in the US are done through Renewable Energy Certificates, or RECs.
The short version is this: When a renewable generator generates a megawatt-hour of clean electricity, it is issued one REC. The REC represents the environmental benefit of that power and can be sold separately (or “unbundled”) from the electricity itself. For the purpose of making “green claims,” it doesn’t matter where your electricity physically comes from. As long as you purchase an equal amount of RECs, you’re allowed to claim to be “powered by clean electricity.”
Most RECs are traded in the “compliance market,” bought by utilities to comply with state renewable energy mandates. But the rest are available to ordinary consumers on the “voluntary market.”
Almost all RECs on the voluntary market are certified by an organization called Green-e, which ensures they meet minimum standards. These RECs can differ based on their geographic origin, the technology involved, and the age of the generator.
In certain specialized markets, RECs can be expensive and have substantial direct impact on the decisions of renewable energy investors. But most RECs sold in the voluntary market are nonspecific — they represent any clean electricity, generated by any technology, anywhere in the country.
This tier of RECs is dirt cheap right now, about $1 to $2 per certificate, but by the same token, buying these RECs is unlikely to have any impact on clean energy investment decisions. They are unlikely to produce measurable “additionality,” in the jargon.
Does that mean they’re not worth buying?
Some argue that no, they’re not worth buying at all — the whole voluntary REC market is a shell game that produces no new renewable energy. (See here and here and follow the many links therein.)
People in the industry tell a somewhat more nuanced story. Obviously, renewable energy generators welcome extra revenue, whether or not any investment decisions can be traced directly to it. (Investment decisions in renewable energy are extremely complicated and a lot of factors come into play.) An industry with more revenue is,ceteris paribus, better off than an industry with less.
Nonetheless, claims that voluntary RECs reduce carbon emissions are highly suspect. Their direct effect is not to reduce net emissions, but to shift responsibility for emissions between parties. They only reduce net emissions, if at all, indirectly, by demonstrating demand for clean energy and by providing a modest boost in revenue to the clean electricity industry.
It’s weak tea. Buy voluntary RECs if you like, they’re cheap as hell, but have no illusions that by doing so you are offsetting your emissions. It’s like tossing your supermarket change into a Unicef jar. Whatever, it’s better than not doing so, but you’re not “curing poverty.”
Better and worse RECs
That said, not all RECs are created equal. Depending on the state you live in, you can buy RECs pegged to a particular region or technology, restrictions that will raise both their quality and their price. For instance, in the Northeast there’s a robust market in solar RECs, or SRECs. These tend to be more expensive, ranging from $20 (in Pennsylvania) to $490 (in DC), but precisely because they are expensive, they have market-moving power.
Also, it’s possible to buy RECs “bundled” with the power that created them. This is done though a “power purchase agreement” (PPA), a promise to buy a set amount of power (and RECS) from a particular renewable generator for a particular amount of time, usually around 20 years.
Bundling RECS into PPAs is a much more effective way of supporting renewable energy generators than buying RECs alone; the electricity is worth much more than the RECs. Having a guaranteed buyer for both power and RECs can often make the difference between a renewable facility getting built or not. Green PPAs, in other words, pretty much guarantee additionality. (Green-e has a certification program for green PPAs too.)
PPAs involve a lot of money, so they’re generally out of reach for individuals; they are typically purchased by entities like universities, corporations, or municipalities.
Okay, enough about the quality of RECs and REC purchases. Let’s briefly look at the ways individuals can get involved.
If you live in a deregulated electricity market: competitive electricity suppliers
If you live in one of the green states on the map above, you can choose to buy your electricity not from your utility but from a third-party supplier. Many of those suppliers try to attract customers by offering green power, i.e., electricity bundled with RECs.
There’s a wider variety of green power products available in these markets, and they don’t always disclose their REC prices, so this option requires a bit more due diligence, but it’s possible to find higher-quality, more expensive RECs from some suppliers.
How to assess all these options
This is quite a lot of information to take in. Here’s how I’d sum it all up.
If you’re an individual, you can easily participate in utility green power programs or buy green power from a competitive supplier. It’s super easy to do, doesn’t cost much money … and doesn’t make much difference. It’s a small production subsidy to a renewable generator, that’s all.
More substantial work, more likely to produce additionality, can be done by bigger entities — a community solar project, community choice aggregation for your town or city, or green power purchases by businesses. An individual has limited control over those, but at the same time everyone has some influence. You can organize your neighbors, start a city petition, or just talk to your CEO.
That’s a lot of work, but most worthwhile things are.
For more information about selecting green energy from a competitive energy supplier, view the ACCES Renewable Energy section here.
To read the entire article click on the link below.View this News Release (external link)