Green Power Purchasing—The Options
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In the “Guide to Purchasing Green Power,” green power is defined broadly by the EPA and DOE as “environmentally preferable energy and energy technologies, both electric and thermal.” Specifically, green power includes “electricity generated by solar, wind, geothermal, biogas, biomass, and low impact hydroelectric sources.”
For most of us who are used to getting electricity through the local utility, paying our monthly bill and trying to keep a handle on reducing energy use, all these options may seem a little too complicated and even out of reach. Even more daunting is the thought of installing green power on-site. But the reality is that green power is more readily available than most may know, and it is delivered through the same grid used by utilities nationwide.
To better understand how the green power system works, the following three options are available:
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1) Renewable Energy Products—According to the Guide, “Customers in many states have the ability to purchase a green power product directly from their electricity provider. In regulated electricity markets, customers may be able to buy a green pricing product from their local utility.” Green pricing is offered by regulated utilities as an option that charges customers a premium to support increased investment in renewable energy. When a utility in a competitive market does not offer a green pricing program, customers can switch to a utility that does.
2) Renewable Energy Certificates (RECs)—Also known as “green certificates” and “renewable energy credits,” RECs are “tradable instruments that can be used to meet voluntary renewable energy targets as well as to meet compliance requirements for renewable energy policies.” Each REC represents the generation of one megawatt-hour (MWh) of electricity from a renewable energy source and denotes such things as the source location, year of generation, environmental emissions, and other generator information.
Although purchasing RECs may result in that green power being delivered to the buyer (“bundled”), they also may be “’unbundled’ from electricity as a stand-alone product and paired by the buyer with its grid electricity purchase.” Regardless of the source, however, RECs that are “combined with plain grid electricity are functionally equivalent to green power purchases from a local utility…”
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3) On-site Renewable Energy Generation—Although not for everyone, generating renewable power on-site is a growing trend with the option of buying the system outright or installing a system owned by another party and purchasing the power generated. Among the pluses of on-site generation cited by the Guide are enhanced reliability, power quality, and protection against price volatility, as well as a visible demonstration of environmental commitment.” If more electricity is produced than used, the system owner can also sell electricity back to the grid for the same price at which it is purchased through a process called net metering. There is a caveat, however, that RECs sold by an on-site system “negates the system owner’s claim to using a corresponding amount of renewable electricity generated on-site because the REC buyer is buying that claim specifically and contractually.”
To help ensure correct identification of green power products, the “Green-e Energy” certification program has coordinated the development of market-based, consensus definitions for environmentally preferable renewable electricity and RECs. According to the Guide, “The Green-e Energy program, is administered by the nonprofit Center for Resource Solutions, certifies and verifies renewable energy products offered in competitive electricity markets, sold in utility green pricing programs, and sold in national markets for RECs. More information is available at www.green-e.org/.