green electricity & Renewable Energy Certificates (RECs)
Chicago residents may choose an electricity supplier that offers "green" or "renewable" electricity. Prices are often comparable to or lower than standard "brown" (fossil fuel) energy. While this can be a good choice and may send a signal to the market that consumers want renewable energy, it is important to understand what exactly is being purchased.
Most "green" electricity sold to Chicago residents actually comes from non-renewable sources. What these companies are doing is buying Renewable Energy Certificates (RECs) on the "voluntary market" on the customer's behalf.
RECs are similar to carbon offsets. Producers of renewable electricity, primarily wind farms, sell their electricity to the grid and can also sell a certificate representing that electricity (RECs) on the open market. RECs are designed to provide additional revenue to producers and so encourage the expansion of renewable energy. Unfortunately, the voluntary REC market is unregulated and bad actors do exist. Furthermore, a glut of RECs has depressed prices.
There are also special "compliance market" RECs, primarily SRECs (Solar Renewable Energy Certificates). Because prices are often significantly higher than "voluntary market" RECs, these can be extremely valuable government incentives for expanding renewable energy -- especially solar.
Most "green" electricity sold to Chicago residents actually comes from non-renewable sources. What these companies are doing is buying Renewable Energy Certificates (RECs) on the "voluntary market" on the customer's behalf.
RECs are similar to carbon offsets. Producers of renewable electricity, primarily wind farms, sell their electricity to the grid and can also sell a certificate representing that electricity (RECs) on the open market. RECs are designed to provide additional revenue to producers and so encourage the expansion of renewable energy. Unfortunately, the voluntary REC market is unregulated and bad actors do exist. Furthermore, a glut of RECs has depressed prices.
There are also special "compliance market" RECs, primarily SRECs (Solar Renewable Energy Certificates). Because prices are often significantly higher than "voluntary market" RECs, these can be extremely valuable government incentives for expanding renewable energy -- especially solar.
The Citizens Utility Board (CUB) maintains and regularly updates a list of companies selling electricity to Chicago residents, as well as provides tips on selecting a provider. It also produced a guide to RECs.
Green-e is an independent company that certifies Renewable Energy Certificates (RECs) through a rigorous audit process. It also maintains a searchable database of electricity companies that purchase their certified RECs. Green-e certification is expensive, however, so only larger producers can afford it.
tips for consumers
When selecting a "green electricity" provider, ask the company about the RECs they purchase -- specifically where and when the electricity was produced. If they say they purchase renewable electricity directly from producers via "power purchase agreements", ask for details. Reputable companies will tell you. Some even list the renewable energy projects they support on their websites or in annual reports. Look for electricity produced recently and ideally in Illinois.
Individuals can also directly purchase RECs in the same way they buy carbon offsets (see green-e website for vendors). This allows consumers to, for example, both benefit from shifting electricity use to off-peak times with time-of-use pricing and support renewable energy.
A small number of electricity companies add green energy directly to the grid by producing it themselves (e.g., building their own solar farms). This may be something residents wish to encourage by selecting such suppliers.
Individuals can also directly purchase RECs in the same way they buy carbon offsets (see green-e website for vendors). This allows consumers to, for example, both benefit from shifting electricity use to off-peak times with time-of-use pricing and support renewable energy.
A small number of electricity companies add green energy directly to the grid by producing it themselves (e.g., building their own solar farms). This may be something residents wish to encourage by selecting such suppliers.
green pricing
Some utilities offer customers "green pricing" options where they can pay a little bit more for their electricity in order to promote renewable energy in their region -- usually via the purchase of RECs.
For example, the city of Naperville, IL municipally-owned utility offers a Renewable Energy Program that supports wind and solar projects within Illinois. It has provided a welcome market-based boost to solar in Illinois through the purchase of SRECs.
ComEd does not offer "green pricing" to residential customers in Chicago.
For example, the city of Naperville, IL municipally-owned utility offers a Renewable Energy Program that supports wind and solar projects within Illinois. It has provided a welcome market-based boost to solar in Illinois through the purchase of SRECs.
ComEd does not offer "green pricing" to residential customers in Chicago.