Green Pricing Programs
Many states require or allow utilities to offer consumers the option of purchasing renewable energy as part of their energy mix. Since renewable energy technologies can be more expensive than electricity generated from traditional sources, these voluntary green pricing programs usually offer consumers the option to pay for clean energy.
States can include provisions or requirements for green pricing programs as part of their restructuring legislation or as revision to regulations or statutes. The premium usually is in the form of a per/kilowatt-hour (kWh) charge or a flat fee. In some states, voluntary donations finance renewable projects.
In essence, green pricing programs create a market for clean energy technologies. Consumers elect to purchase green energy and create demand for the technologies. Although the physics of electricity prevent the consumer from receiving only electricity generated by the green resource, that portion of clean energy is added to the utility's overall resource mix. Increased consumer interest leads to new renewable energy development.
Visit DOE's Green Power Network for news and information on green power markets and related activities.
Arguments for Green Pricing Programs
Provide an alternative to systems benefit charges as a means of supporting renewable energy programs.
Allow customers of a regulated electric utility to have a choice of fuel type.
Unlike a systems benefit charge, which is assessed to all ratepayers, green pricing programs are voluntary.
Arguments against Green Pricing Programs
May be perceived as providing an unfair advantage or unnecessary support for one source of energy over others.
May be argued that renewable resources should either succeed or fail on their own.
For details about green power programs in individual states, visit the Database of State Incentives for Renewable Energy (DSIRE).