A lot of people ask me about green energy offers. When you enroll in a green electricity rate, you are subsidizing green energy producers via the purchase of Renewable Energy Certificates, making the producers more profitable and more likely to grow their business, meaning more clean energy will be placed on the grid. But you are still using the same electricity generated from a variety of sources as everyone else on the grid. According to the Electric Reliability Council of Texas (ERCOT), the current average fuel mix in Texas is: Natural Gas: 40%; Coal: 39%; Renewable: 11%; Nuclear: 10%; and Other: <1%. The cleanest, cheapest electricity is every kWh you do not consume. Industry analysts estimate that approximately 30% of electricity generated is wasted. There are a myriad of ways to conserve energy, many of which are inexpensive and do not impact your quality of life. But that’s a blog post for another day.

Renewable Energy Certificates (RECs), also known as Green Tags, Renewable Energy Credits, Renewable Electricity Certificates, or Tradable Renewable Certificates (TRCs), represent proof that 1,000 kWh of electricity was generated from an eligible renewable energy resource. A certifying agency gives each REC a unique identification number to make sure it doesn’t get double-counted. The green energy is then fed into the electrical grid (by mandate), and the accompanying REC can then be sold on the open market. Retirement occurs when a REC is used by the owner of the REC (ie when a retail electric provider sells you a green rate). If you are purchasing RECs directly, DO NOT PURCHASE RETIRED RECs! The money used to purchase a retired REC will not go to the green power producer and the goal of increasing green power on the grid will not be advanced!

A 2,500 sq ft home in the Houston area will typically use between 15,000 and 20,000 kWh annually, depending on weather, insulation, how many people reside in your home, if you have a pool, etc. To determine how many RECs you would need to purchase to offset your power consumption, determine your annual consumption, then divide by 1,000. So when you sign up for a 12 month green rate, then use 19,000 kWh, 19 RECs will be retired by the retail electric provider (Green Mountain, Reliant, etc). Once a REC is retired, it may not be sold, donated, or transferred to any other party. Green Power producers typically receive about $1 per REC, or $0.001/kWh. Sellers of green energy plans typically sell a REC at a retail price of from $2 to $20 per REC.

The bottom line is, we want the percentage of green power on the grid to increase, and purchasing RECs, either directly or via a green rate offer, is an effective way to make this happen! Remember, no matter the retail price, the green power producer receives the same $1. In other words DO NOT PAY MORE FOR YOUR GREEN POWER THAN YOU HAVE TO!

Lantern Power evaluates offers from all Retail Electric Providers and recommends the rates that will cost you the least, based on your monthly electricity usage. At your request, we will find you the green rate offer with the lowest cost to you. If you accept our recommendation, the power company will pay us instead of their internal sales/marketing team, so our service costs you nothing!


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