Green Tags: Buying Into Renewable Energy

If you are like me you want to live as green as possible but sometimes find it a little difficult. Depending on your living situation, it’s not always feasible to make the greenest choices. At home, electricity from renewable energy is the ideal but what if you are confined by an existing infrastructure that runs off of conventional fuel? Enter Green Tags.

Green Tags are Renewable Energy Certificates (RECs), also known as Tradable Renewable Certificates (TRCs). They are a way to purchase the benefits of producing electricity from renewable energy and help subsidize renewable energy production including solar, wind, geothermal, low-impact hydropower, biomass, biodiesel and hydrogen fuel cells.

Renewable energy producers are given 1 REC credit for every 1,000 kWh of electricity they create. The green energy enters the electrical grid alongside non-renewable source electricity and is tracked by certifying agencies with a unique number ID. The certifying agencies then sell the RECs to consumers who want to support renewable energy.

The idea behind Green Tags is to offset the non-renewable electricity used by your home or business with the purchase of electricity from a renewable energy. This philosophy is often criticized because it doesn’t necessarily decrease consumption of unsustainable resources.

However, Green Tags are more than just a “get out of guilt” offset ticket. They give renewable energy economic strength by subsidizing the renewable energy market. Non-renewable power from nuclear and fossil fuels (including coal – ugh!) is subsidized by the government giving them a cost advantage over renewable energy and making them the cheapest choice for consumers.

The true cost of non-renewable energy is not reflected in the price. Government subsidies shadow the social and environmental costs of energy from nuclear and fossil fuel including pollution, political conflict, military security, material disposal and health care treatment. If not for subsidies, non-renewable energy would not be affordable.

The purchase of Green Tags is a way to even the playing field. They may not cut down the amount of non-renewable energy a consumer uses, but they give renewable energy a way to catch up in the market and become the optimal economic choice for consumers.

How? When a consumer buys a Green Tag the energy producer receives a payment that is in addition to what the utility company has paid them for the electricity sold into the grid. The extra income supports the construction of more renewable energy projects, production of more renewable energy and allows the producer to lower the cost to consumers. Simple economics: more demand, lower price.

Green Tags are available to homeowners and businesses through REC certifiers or retailers. The most trusted national certifier of RECs in the U.S is Green-e, an independent, non-profit organization out of San Francisco. The Green-e program is an initiative from the Center for Resource Solutions, a national non-profit focused on building a strong renewable energy market. Retailers selling RECs with the Green-e logo are selling products verified by this organization. Green-e also keeps a list of businesses that use renewable energy or offset with RECs so you can spread your renewable dollars even further.

You can also purchase Green Tags from retail renewable energy certificate companies which are mostly for profit companies. One non-profit retailer is the Bonneville Environmental Foundation which supports community-based renewable energy projects and watershed protection. Each retailer offers different packages - mixes of types of renewable energy, location of production or community return benefits.

The cost depends on the package you choose to support and the amount of electricity you want to offset. For instance, I pay $9.00 per month to purchase RECs to offset the electricity used by the tenants in my condominium. The incentive for me to purchase RECs is threefold: I can’t control my tenant’s energy consumption, the condo association isn’t likely to approve an onsite wind turbine and my utility company doesn’t offer a green option. The small monthly cost is covered by the rent and helps bridge the gap between my local grid and renewable energy.

There are other ways to purchase and support renewable energy. You may be able to choose green power from your regular utility provider. Utility companies are required by law to purchase electricity from independent power producers. If there is a renewable energy provider on your grid, your utility company is already buying green power. It may be slightly more expensive but not significant. About one tenth of the power utility companies in the U.S. offer a renewable energy option to their customers. You may also be able to purchase renewable energy directly from the supplier.

In addition to purchasing renewable energy there are other ways you can green your home’s utility bill. Performing an energy audit can help identify energy saving strategies in your home. You can do this yourself, hire a professional or your utility company may perform this service for free.

You can significantly decrease your electricity use (and CO2 emissions) by replacing your light bulbs with compact fluorescent bulbs (CFLs) and unplugging electronics when not in use. Another way to cut down your electricity consumption is to upgrade your appliances to Energy Star models. Even small steps towards decreasing energy consumption can add up to make a big difference in your energy bill and your home’s environmental impact.

Until renewable energy surpasses non-renewable energy in the mainstream consumer market, Green Tags offer homeowners a way to offset their electricity consumption and support the industry no matter where they live. RECs don’t decrease the use of fossil fuels for electricity but they do make clean, green power more feasible in the near future.

*Note: The information in this article is general advice and not meant as a substitute for personal guidance from a financial advisor, real estate professional, home improvement contractor or legal counsel. Although the author is a licensed realtor, the advice given in this article does not constitute any client contract or agreement between the author and the user. The author is not responsible for any losses, damages or claims that may result from your decisions.