GreenYour.com

Opting for renewable energy certificates (RECs), known also as renewable energy credits, green tags, and tradable renewable certificates (TRCs), is less direct than getting green power from your electricity provider, yet this option still lets you power up your home or office in a more sustainable manner.

How RECs work

Green consumers without clean power options: Say you decide on greener power for your home or office. First step: examine your local electricity provider’s power mix. Perhaps you find that it’s largely made up of dirty, unsustainable energy and completely devoid of anything green. You then search for other green electric providers, but find that little, if any, clean electricity is available in your area. That is, your local utility provider (if you live in a regulated market) does not offer green power pricing options for a small premium, and there are no private power providers (if you live in a competitive electricity market) offering green power options. You begin to despair, but then realize that clean power is being generated by an independent renewable energy company in a nearby community! But how do you get it?

Clean power providers without buyers: You’re not the only one in a bind. Nationwide, renewable energy companies (most often private enterprises), generate power via solar, wind, hydro, geothermal, or biomass. The problem? At this point in time, it costs more to produce clean energy than non-renewable power from fossil fuels or nuclear sources. Some states require that a certain percentage of their energy portfolio come from renewable sources, but many do not. So, in the absence of state legislation, how are clean energy companies to thrive, or even survive? Most investors are not interested in buying into a market that’s operating at a loss, even if it’s a noble cause.

RECs to the rescue!: Environmentally conscious consumers and green energy producers find mutual benefits through RECs. Clean tech companies generate power and then symbolically bundle it together, usually in quantities of 1,000 kilowatt-hours (a kWh equals 1 megawatt-hour or MWh). This bundle is given a uniquely generated number, known as a renewable energy certificate (to keep it from being double-counted), which can then be offered on the open market to those interested in supporting green energy.

The upshot: The cost of each green tag is calculated based on the difference between the market rate for traditional fossil fuel energy and actual costs of clean energy production. So for instance, if the market price of conventional power is about $0.06 per kWh, and clean power costs $0.07 kWh to generate, the difference will be $0.01 per kWh, which is $1 per MWh. Assuming you use the US average of 11,000 kWh every year, in our imaginary scenario, you’ll pay $110 per year for your RECs. That’s less than $10 a month!

Keep in mind that purchasing green tags does not mean that green electrons get literally delivered to your home. You remain plugged into your not-so-green power supplier, making your regular electricity payments. The green news? The RECs you’ve purchased represent green power being pumped into the overall electricity mix, meaning the more you purchase, the more the balance of power generated nationwide swings in the direction of green. Purchasing RECs effectively allows you to subsidize green energy production—your payments go toward making new and existing renewable energy facilities more competitive. Much like carbon offsets for travel and other CO₂-intensive activities, RECs give you green bragging rights—the benefits of this clean energy (fewer greenhouse gases, reduced particulate matter production, and lowered noxious gas emissions) legally belong to you. But perhaps more importantly, purchasing RECs acts as a powerful signal that demand for green energy is increasing.

Find it! Renewable energy certificates

You can purchase RECs, green tags, or TRCs directly from the companies below, most of them serving consumers and businesses across the country. There’s a wide selection of price points, payment schedules, and source options but if shopping locally is important to you, you may want to look for green power producers closer to home, otherwise, your power may be coming from several states away.

You may wish to prep for your REC purchase by calculating your carbon footprint. There are myriad calculators out there, but here are a few to get you started: EcoNeutral, Carbon Friendly Solutions, and ZeroFootprint.

Before you buy

It’s a good idea to opt for certified RECs to ensure you’re getting truly clean, independently audited sources of energy. Many RECs are verified by Green-e, but some are also vetted by Environmental Resources Trust’s EcoPower program. The Neutral Network also provides verification of the methodologies used to calculate greenhouse gas emissions offsets. See more about certification in Controversies below.

Choosing renewable energy certificates helps you go green because…

• Certificate sales support renewable energy development.
• It allows us to reduce dependence on foreign sources of oil.
• Clean, green jobs are created as this industry expands.

RECs, TRCs, or green tags can be purchased by virtually anyone regardless of whether your local electricity provider offers green power.[1] RECs are generally sold in units of 1,000 kWh or 1 MWh; the average US home uses approximately 11,000 kWh of electricity per year.[2] Despite the fact that the US is not participating in the Kyoto Protocol, many big American companies are voluntarily opting to purchase RECs, including Wells Fargo, Whole Foods Market, and Starbucks.[3]

The demand for electricity in the US is predicted to increase 50 percent by 2025, increasing the need for new energy generating capacity.[4] According to Environmental Defense, electricity use in the US is responsible for 70 percent of sulfur emissions, 33 percent of nitrogen oxide emissions, 23 percent of mercury emissions, and 23 percent of fine airborne particle emissions. Coal power plants account for most of these emissions.[5]

Non-renewable energy sources fall into two main categories: fossil fuel and nuclear energy. Fossil fuels (including coal) create several environmentally harmful gasses,[6] disrupt land and ocean habitats, and result in oil spills, which can kill wildlife and contribute to water pollution.[7] Burning coal provides over 50 percent of the electricity used by Americans,[8] but is the single largest source of mercury emissions.[8] Nuclear energy, on the other hand, has the potential for disastrous accidents (such as Chernobyl), and can cause serious radiation poisoning for workers and those living in close proximity to the plants.[9]

The US leans heavily on foreign sources of oil to supply its growing energy demands. Choosing to support green sources of energy increases energy independence and ensures a more secure social and economic future.[5][6][10] In addition, as money is invested in green power projects, more jobs are created. Supporting green power helps to expand the job market and stimulates the economy.[6]

Renewable energy sources

There are several types of renewable energy sources to consider. Most green power generating companies use a combination of two or more of these options.

Direct solar energy falls into two general categories: concentrating and thermal systems.[11][12] Currently, solar energy provides less than 1 percent of the energy needed by electricity users in the US.[13]

In one way or another, most other renewable power sources are related to solar energy. Wind, for instance, results from solar energy absorbed and reflected by water and land, which in turn creates pockets of air with varying temperatures that react to create wind.[14] The estimated energy potential from wind worldwide is 5,800 quadrillion Btu, which is 15 times more than the current energy demand of the world.[15]

Hydropower comprises 73 percent of all energy generated renewably in the US.[16] The constant cycling of water through the earth results in powerful hydro-forces,[17] which are harnessed using mechanical processes.[18]

Biomass energy is harnessed by burning biomass such as manure, crops, wood, and garbage[19][20] to produce steam, which turns a turbine.[21] Biomass currently provides about 3 percent of the energy used by Americans.[22]

Oceans cover over 70 percent of the earth’s surface and can produce energy mechanically and thermally.[23]

Geothermal energy, which originates in the earth's core where temperatures can reach 9,000°F ,[24] can be used to provide direct heat, can regulate building temperatures (heating and cooling), and can be used to create electricity.[25] It has the potential to provide 50,000 times more energy than the combined resources of all the world’s oil and gas resources.[26]

Hydrogen energy is harnessed by electrochemically combining hydrogen with oxygen, which produces electricity and heat. The only byproduct is clean water vapor.[27]

Controversies

Several controversies have followed the rapid growth in the renewable energy certificates market, not least of which is certification and regulation. Without non-partisan, independent verification of the clean energy industry, critics posit that consumers are faced with misleading, greenwash messages from unregulated companies trying to pass their green tags off as entirely renewable.[28][29] Issues of transparency also dog the sale of RECs, since clean energy suppliers sometimes refuse to identify which projects receive the funding, and how much their profits are relative to funds being sent to the expand clean energy generation.[30] Finally, RECs are being touted as the poor man’s carbon offsets, since they are often cheaper than purchasing offsets, and certainly less expensive than building one-off wind or solar farms.[31]

Glossary

• Btu (British thermal unit): A unit of energy used universally in the heating and cooling industries. It is defined as the unit of heat required to raise 1 pound of water by 1° F.

External links

• US National Renewable Energy Laboratory - Emerging Markets for Renewable Energy Certificates: Opportunities and Challenges
• Renewable Energy World.com - Improving the Forward Curve for Green Power
• US Environmental Protection Agency - Clean Energy
• CNN.com - Iceland phasing out fossil fuels for clean energy
• US Department of Energy - Renewable Energy Certificates and Air Emissions Benefits: Developing an Appropriate Definition for a REC