Purchasing Green Energy Electric Plans

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In 2017, over four trillion kilowatt-hours of electricity were generated in the United States. About 83% of it was generated using fossil fuels, in detail natural gas (32.1%), coal (29.9%), nuclear (20%) and petroleum (1%). Renewable or green energy sources made up 17 percent of the country’s electricity generation, in detail wind power (6.3%), hydro (7.4%), biomass (1.6%) and solar photovoltaic (1.2%).  The rest of the electricity (0.5%) came from other renewable sources such as solar thermal, landfill gas, biogas, geothermal or tidal generation. With green energy electric plans, the electricity you purchase will come from one or more of the above clean sources. It’s a sustainable or “green” way to meet your electricity needs.

Why Choose a Green Electric Plan?

Renewable energy sources provide three major benefits. They preserve the environment, they support local economies by creating thousands of jobs each year, and they increase the nation’s energy security and resiliency.

Green energy sources preserve the environment or lessen the impact on the environment significantly as compared to fossil fuels. Using renewable energy sources creates low or, in many cases, no pollution, no carbon dioxide emissions and it reduces the direct impact on water and land ecosystems.

In 2017, the number of people working in the renewable energy sector in the United States alone reached 806,000. While employment in the coal industry has been steadily declining from 150,000 to about 51,000 in the last 30 years, employment in the U.S. wind industry alone was twice as high in 2017. Renewable energy sources are spread all across the nation from the windy coasts to hot and sunny deserts. As green power is typically coming from many smaller sources, the renewable energy sector is creating jobs in many big and smaller towns alike.  

Renewable energy is an abundant and unlimited resource that naturally replenishes. The distributed electricity generation from diverse and unlimited sources increases our energy security and resiliency.

The reasons for purchasing green power are manifold. Some corporations, especially large IT companies, purchase clean energy to improve their image or reputation while others are forced to buy it by their shareholders. Anyone who wants to reduce his or her carbon footprint, reduce pollution or who simply cares about future generations should switch to a green energy electric plan.

How Is Clean Energy Being Delivered?

Whenever electricity from a clean source such as a wind farm or solar PV system is delivered to the grid, a Renewable Energy Certificate (REC) is created. One REC represents one megawatt of electricity generated by a renewable source, no matter where it’s generated. Retail electricity providers purchase the Renewable Energy Certificates separately or “unbundled” from the power generated for customers who want to purchase a green energy electric plan.

As electricity follows the path of least resistance, the power delivered to your home is most likely coming from local or close by sources. That means unless your closest available electricity source is renewable generation, the electrons arriving at your home aren’t “green”. However, purchasing a green energy electric plan will make sure the electricity you’re consuming will be matched with renewable energy delivered to the grid at some point.

Ways to Purchase Green Electricity

When you select a green energy electric plan, your retail electricity provider redeems Renewable Energy Certificates (RECs) on the market to offset your usage. Your electricity will continue to be delivered to you over the electric grid. The Renewable Energy Certificates purchased by your electric provider will make sure that the same amount of “green” kilowatt-hours is delivered to the grid somewhere.

Electricity customers can purchase renewable energy directly from their retail electricity provider if a green or clean power plan is being offered or from any independent clean power generator if you’re living in a deregulated area. As another option, you can purchase the renewable energy certificates separately from your current electric service.

Some power suppliers offer renewable energy add-on options or green pricing. For an extra fee customers can offset their carbon footprint by purchasing electricity generated from clean, renewable energy sources. In many cases, customers can also choose to purchase only a portion of their energy from renewable sources and go 25% or 50% “green”.

To the environment, the overall benefit of purchasing a green pricing or green marketing product is the same as purchasing your own Renewable Energy Certificates from an independent source. Going through your retail electricity supplier or utility will directly reflect the demand though. This may eventually make suppliers discontinue their fossil energy plans.

What does Green Electricity cost?

Utilities with green power plans utilities buy Renewable Energy Certificates and charge their customers a small premium, which is usually around 2 cents a kWh.

You can also purchase Renewable Energy Certificates directly from third-party suppliers such as Green-e which certifies REC providers. Not all green power is certified. The market for RECs fluctuates over time and by region but shows a recent trend of going up.

In some states with a compliance market, electrical utility companies can be required to purchase RECs if they don’t generate the required amount of renewable energy. This drives up the purchase price for RECs, which are therefore generally cheaper in voluntary markets.

Choosing Between Green Options

Customers purchasing a green energy electric plan from a utility often have a choice how much green or clean power they like to get in their mix. Many companies offer 25%, 50% or 100% green power options. In some cases, customers can even choose who generates the electricity they purchase or support a certain clean power source.

If instead you decide to purchase Renewable Energy Certificates you have the option of choosing where you buy the RECs from. This is an important part of supporting green energy. The revenue generated by the sale of RECs covers extra costs for using renewable sources. At the same time, it encourages the development of additional renewable energy projects in that area.

Outlook

The more people purchase green energy electric plans the more we’re moving towards a sustainable society and towards 100% renewable energy generation. While the generating cost for renewables is going down, the cost for fossil fuels is slowly rising.

Electricity generation is getting more and more efficient and new technologies are entering the market. The wider introduction of energy storage and the exploration of new potential renewable power sources will create a dramatic shift in demand away from fossil fuels. Learn more about different energy options in our energy guide.