Supporting Green Electricity by Buying Certificates

Buying green electricity directly from your utility isn’t always possible, even in countries with a liberalized electricity market. And green power suppliers rarely supply their power directly to homeowners. But some countries have now a new type of products to promote green electricity: Power Certificates...

Certificates

These new produts - intended to promote green power - are named differently from country to country: RECs (Renewable Energy Certificates) or Green Tags, Green Certificates, or Tradable Renewable Certificates in USA, Green Funds in Great Britain or GPC (Green Power Certificates) in Canada...

The names vary, but the scheme behind them is basically the same. We will call these products Certificates, and explain how they work below.

Buying Certificates and the electricity to a green supplier (directly)

In some cases you can buy electricity to a green supplier, which issues Certificates attesting the green attributes of their electricity.

But that's rather uncommon. In most cases you The Certificates we talk about in this page is a financial product associated with the promotion and buying of green electricity. That’s something different from the certification granted by independent third parties such as Green-e and Environmental Resources Trust. This certification help ensure to get the quality and type of green power you are paying for when buying Green Power Certificates, and also that green-power companies are meeting environmental norms and customer-protection guidelines. don't contact with green suppliers directly. They may not exist in your region and most of the times they don't deliver the power directly to consumers (they fed it in the nationwide grid).

Most of the times green power companies sell their energy to the utilities; and when they do that they may also sell Certificates to those utilities or, separatedly, to marketers and brokers. And that’s when the Certificates become truly strategic.

Buying green electricity to you utility

Some utilities buy and sell green electricity, and in that case you can get green power directly from them, acquiring at the same time a Certificate (issued by a green power supplier) attesting the renewable source of the electricity (in fact the Certificate only proves that the utility has bought green power and have stored it in the power grid…).

The scheme is simple: the green suppliers sell the Certificates to the utilities when they sell the green power, and the utilities resell the Certificates when reselling the power to consumers (that is, you). Note: utilities literally sell the Certificates, since these certificates usually involve a price: the premium you are willing to pay to support green power generation….

This option is often convenient and transparent. You haven’t to change from supplier, your utility is just reselling you the green electricity they bought and the Certificates associated to it.

Buying Certificates to a broker or marketer

But since a significant number of utilities are not compromised with green power, and you can’t buy it through them, there is a another possibility to support green electricity generation. It involves buying Certificates (not the electricity) to a marketer or broker - which you can do online, wherever you live.

In this case the Certificate is clearly a voluntary scheme to help the green power producers to be competitive, and you just have to choose – through the broker or marketer – the companies and the types of renewable energy you want to promote, paying the premium…

These products (sold by marketers and brokers) will cost you some cents per kW of energy (often something between $5 and $20 per month to cover most home's electricity bills: see Green Power Prices ) and by buying them you are giving a subsidy to the green power producers, that is, your are helping them to sell green electricity to the utilities.

Through the Certificates the green-power companies are getting help to be competitive. They are selling you the environmental attributes of solar, wind, and other clean electricity, and they are proving it by selling you Certificates (through the brokers). See image above (Montgomery county site) depicting the process.

A product for eco-conscious customers

Certificates are clearly a product for eco-conscious customers. They are a way to help clean power generators to make them competitive enough... The premium you are paying to them by buying the certificates to the brokers or to the utility will encourage the development of renewable energy projects.

Marketers and brokers in USA

See: EERE Green Power List