what is green power graphic energysage

What is green power energy? Green electricity explained

Reading Time: 4 minutes

With so many synonymous terms for renewable energy, many are wondering “what is green power?” and how it can be distinguished from general alternative or renewable energy sources.

What is green electricity?

Green electricity is the cleanest, most beneficial forms of renewable energy. For example, municipal solid waste or large scale hydropower are indeed renewable but still have major polluting capacity. These are the energy sources considered to provide green electricity:

  • Solar
  • Wind
  • Biomass
  • Geothermal
  • Small-scale hydropower

If you install solar panels on your home, you can reduce your electricity bill, protect against rising energy costs, and increase your property value. Even more, solar homeowners benefit from a number of different incentives and programs that have to do with the state they live in and how committed it is to green power. U.S. utilities have to observe a Renewable Portfolio Standard (RPS) which is typically a percentage of energy generated from renewable resources that serves as a goal that should be met by that utility. Because utilities struggle to create enough energy from green sources on their own, renewable energy credit (REC) programs allow them to buy documentation of renewable production from homeowners and in theory, “take credit” for that generated power. One REC refers to one megawatt-hour (MWh) of energy produced or 1,000 kilowatt-hours (kWh).

A REC represents the environmental and social benefits that distinguish clean, renewable energy from conventional sources of energy like coal.  For example, every time the blades on a wind turbine spin, both a unit of electricity and an associated REC are generated. When electricity flows onto the grid, it mixes together with all the other electrons moving on the grid, so it’s not possible to send particular “renewable energy” electrons to a specific home or business. RECs make it possible for consumers to ensure that the electricity they are using is green. Recs are also well known as green tags or renewable energy certificates and apply to people who own a renewable array such as a solar panel system.

Whereas net metering allows a homeowner to be credited for surplus solar panel production, a solar REC (also referred to as an SREC) does not pertain to any surplus grid supply but has to do with someone getting credit for helping the environment. Organizations that sell RECs buy them wholesale from clean energy generation sources and repackage them into smaller quantities to sell as green power.  When you buy RECs, the seller transfers ownership of the RECs over to you, and you become a consumer of green power.

Whoever purchases RECs legally owns the social and environmental benefits of the associated renewable energy, which have been separated from the electrons on the grid. This means that buying RECs makes you the owner of green power, and a supporter of renewable energy.  The money that you spend on RECs also helps fund renewable energy projects, making more projects possible.

The Center for Resource Solutions, the organization behind the Green-e Energy certification program for renewable energy, made this great video that explains RECs.

home energy monitors

What are the differences between green power options?

Like anything else, not all RECs are created equal. The quality of a REC, and therefore your green power, depends on several factors:

  • Age: The best RECs come from “new” renewable energy development.  In the industry, that is defined by any renewable energy source (like a wind or solar farm) that was built in the last 15 years.
  • Generation Source: RECs can come from a range of resources, including wind, solar, hydro, geothermal, landfill gas and biomass. They range in cost, availability and environmental impact.
  • Location: RECs can come from a local renewable energy project, or from anywhere within the country (known as “national” RECs). Generally, national wind energy RECs are easier to obtain and less expensive, but local or regional sources have more of an impact on the growth of renewable energy.
  • Tracking: In addition to individuals or companies who buy RECs as a way of using green power, utilities use RECs for state renewable energy requirements. Because of this, RECs need to be tracked properly to make sure that the same REC isn’t being used twice. RECs that are Green-e certified meet the highest standards, and are audited annually.

All of these factors impact the availability, price and impact of RECs.  By taking them into account, you can rest assured that your REC purchase is making a difference.

How do I buy green electricity?

The price of your green power depends on the option you choose.  In most cases, green power options come with a premium over the cost of regular electricity, which can range from 5% to 25% for high-quality local RECs.  Just like most other products, the price typically includes the cost of the REC as well as the cost of marketing and operations associated with the product.

Two ways you can support green power:

Explore your utility’s green power options. Utility green power options are often sourced from a regional resource.  If you live in a state with a deregulated energy market (where you can select your electricity supplier), and your current provider doesn’t offer green power, you can shop around for a supplier that does offer a green option.

Sign up with an energy supplier that offers a green option. Arcadia Power offers 100% Green-e certified U.S. wind to any customer in the U.S., which can be easily combined with your electric bill.

Want to know more? Check out these resources:

zip code entry solar calculator
Find out what solar panels cost in your area in 2020

2 thoughts on “What is green power energy? Green electricity explained

  1. Hu

    Another way to support green energy is to contact your elected officials and make your position clear to them. Vote for those officials that take a stand for green energy and don’t vote people that oppose green energy.

  2. Francis

    Thank you for this informative article! There are a lot of ways to reduce energy consumption at home without a major investment. Other option is that trying a very basic like using LED instead of traditional bulb, plugging off your unused appliances, and many more.


Leave a Reply

Your email address will not be published. Required fields are marked *