Massachusetts consumers have the power of choice: Thanks to the 1998 deregulation of the electricity industry, most residents can choose to buy electricity directly from a utility company, or from an independent supplier. Some consumers make the switch hoping to save money, or they want price stability. Others are looking for a more eco-friendly power supply.
But environmentally minded consumers should be wary when shopping for green power, says Larry Chretien, executive director of the Energy Consumers Alliance of New England.
“What the consumer is expecting is to have their purchase displacing fossil fuels,” he says. But not all so-called green electricity suppliers actually accomplish that goal.
Utilities and competitive power suppliers in Massachusetts must buy at least 12 percent of the electricity they sell from renewable sources that went into operation after 1997. The percentage goes up by one point each year. So if an independent supplier boasts of selling 12 percent green power, it’s actually just complying with the minimum requirement. Not such a big deal.
And even when a supplier promotes a higher percentage of renewable energy, the offer might not be as green as it seems, Chretien explains. Often, suppliers create their green power products by buying Renewable Energy Credits, or RECs, which essentially are certificates that represent 1 megawatt-hour of electricity generated by a renewable project.
These credits, however, are not all created equal. They might represent power created by wind turbines in Vermont, biomass plants in the Midwest, or solar farms in the South. But buying a REC from, say, a solar installation in Texas is not going to help expand renewable capacity, Chretien says. Those projects are economically viable on their own and would exist even without selling RECs to competitive suppliers.
The question to ask, Chretien says, is whether the RECs backing up a green power offering come from New England Class 1 sources. The exact definition varies from state to state, but the designation ensures that your money is really going to help develop new renewable capacity in your own region, as clean energy projects come online to meet rising legal requirements.
“When you buy a renewable energy resource that’s Class 1 in New England, you’re helping to sustain the growing demand for such projects,” Chretien says. “It costs a bit more, but then you get what you’re expecting.”
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