A lot of customers ask us why the 100% renewable plans in our search results are not more expensive than what they are used to seeing. The answer is that making an energy plan 100% renewable or "green" is actually just a bunch of paperwork and it does not cost much money at all. In reality, a 100% renewable plan should not really be more than $0.002/kWh more than a regular plan. Any provider charging more than this is just trying to take advantage of you.
Background on how electricity plans become 100% renewable or "green"
The Texas grid manager, ERCOT, does not have the ability to deliver electrons only generated from wind farms or solar farms directly to your home. Instead, electricity delivered to your home is a mix of electrons from all power generation sources such as coal, natural gas, wind, solar, etc. When a renewable generation source like wind or solar farm generates a unit of electricity the government awards a Renewable Energy Credit (REC) to the generator. This is basically a piece of paper that has value and can be sold to anyone using electricity who wants to offset their emissions.
How much do RECs cost to buy and administer?
RECs in Texas have sold for about $0.0003/kWh for the last few years and the market expects that price to remain the same for the foreseeable future. Folks, look at that number.....that is REALLY small. A retail energy provider who wants to sell you a 100% renewable plan buys these RECs for this price and electronically "staples" them to the plan they sell you. The retail provider incurs minimal administrative costs to do this. Let's assume the cost of administration is $0.0007/kWh (over twice the price of the REC itself). This brings the total cost of selling you a 100% renewable plan $0.001/kWh. That is 1/10th of a penny and a TINY fraction of your bill, about 1%.
How much do retail energy providers charge to make a plan 100% renewable?
This varies but we typically see providers charging $0.001 to $0.01 to make plans renewable but most try to charge greater than $0.01/kWh. Adding $0.001/kWh is reasonable and fair but adding $0.01/kWh or more is simply taking advantage of consumers. The retail providers are creating a "premium" product out of thin air and pocketing the difference.
We hope this helps answer some questions. From now on, if you see a plan that is 100% renewable and costs more than $0.002/kWh more than a regular plan with the same provider you'll know they're trying to pull one over on you.
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