The essence of green power marketing is to provide market-based choices for electricity consumers to purchase power from environmentally preferred sources. The term "green power" is used to define power generated from renewable energy sources, such as wind and solar power, geothermal, hydropower and various forms of biomass. Green power marketing has the potential to expand domestic markets for renewable energy technologies by fostering greater availability of renewable electric service options in retail markets. Although renewable energy development has traditionally been limited by cost considerations, customer choice allows consumer preferences for cleaner energy sources to be reflected in market transactions. In survey after survey, customers have expressed a preference and willingness to pay more, if necessary, for cleaner energy sources. You can find more information about purchase options on our "Buying Green Power" page.
Green pricing is an optional utility service that allows customers an opportunity to support a greater level of utility company investment in renewable energy technologies. Participating customers pay a premium on their electric bill to cover the incremental cost of the additional renewable energy. As of the end of 2009, more than 860 utilities across the nation, including investor-owned, municipal utilities, and cooperatives, offer a green pricing option.
The more general concept of green power marketing refers to selling green power in competitive markets, in which multiple suppliers and service offerings exist. Electricity markets are now fully or partially open to competition in more than a dozen states. To date, competitive marketers have offered green power to retail or wholesale customers in District of Columbia, California, Illinois, Maryland, New Jersey, New York, Pennsylvania, Texas, Virginia, and several New England states.
Whether or not they have access to green power through their local utility or a competitive electricity marketer, consumers can purchase renewable energy certificates or RECs (also known as green tags or tradable renewable certificates). RECs represent the environmental attributes of the power produced from renewable energy projects and can be sold separately from the physical electricity. Customers can buy RECs without having to switch electricity suppliers.
Even the limited experience with green power marketing has highlighted a number of important market needs, such as verifying "green" power claims and educating and informing customers about environmentally preferable market choices. A number of activities are already underway to help address product credibility, such as green power certification and the development of advertising and marketing guidelines. To date, more than 20 states have environmental disclosure policies in place, requiring electricity suppliers to provide information on fuel sources used and, in some cases, emissions associated with electricity generation.
The Green Power Network (GPN) provides news and information on green power markets and related activities. The site is operated and maintained by the National Renewable Energy Laboratory for the U.S. Department of Energy. Frequently updated, the site contains information on and links to green power providers and their product offerings, utility green pricing programs, and other policies that affect green power markets. The GPN also includes a reference library of relevant papers, articles and reports.
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