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Green pricing
Green energy certificates
Market outlook
Green power resources
"Green power" is electricity supplied in whole or in part from renewable resources.
Instead of installing a renewable energy system on their property, roughly 40% of electricity customers in the United States now have the option of purchasing renewable energy directly from their electricity supplier. This option is available in some of the retail power markets that are already open to competition as well as in regulated markets where electric utilities have developed green pricing programs.
Green power marketing usually refers to selling green power in a competitive marketplace, in which multiple suppliers and service offerings exist, but can also include the marketing of green pricing programs and green energy certificates (see below).
Currently, more than 20 states have environmental disclosure policies that require electricity suppliers to provide information on fuel sources and, in some cases, emissions associated with electricity generation. Independent certification programs have also been developed to verify the environmentally preferable qualities of electricity sold as "green."
Green Pricing
In regulated electricity markets, some power companies provide an optional service, called green pricing, that enables customers to support a greater level of utility company investment in renewable energy technologies. Participating customers typically pay a small premium on their electricity bill to cover the increased costs incurred by the electric utility to add renewable energy to its power generation mix .
Many utilities are offering green pricing to build customer loyalty and expand business lines as they prepare for competition in the electricity market. More than 80 green pricing programs are currently available across the country, and another 200 utilities have announced plans to offer a green pricing option.
Green Energy Certificates
Increasingly, companies that generate green power are separating the power they sell to utility companies from the environmental attributes associated with that power. Green energy certificates (also known as green tags, renewable energy certificates, or tradable renewable certificates), which represent these environmental attributes, are then sold to companies and individuals who want to help increase the amount of green power entering our nation's electricity supply.
By separating the environmental attributes from the electricity itself, green power generators are able to sell the electricity they produce to electric utilities at a competitive market value. The additional revenue generated by the sale of the green certificates covers the above-market costs associated with producing power made from renewable resources.
Customers can buy green certificates, thereby supporting renewable energy, even if they can't buy green power on the competitive market or through a utility green pricing program — without having to switch electricity suppliers. Currently, about a dozen organizations market green energy certificates nationally.
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