Arcadia Power will buy renewable energy to match your usage, ensuring that an equal amount of clean energy is getting on the power grid.
...we buy Renewable Energy Certificates (RECs) on behalf of residential and business customers, and sometimes we source our own RECs from projects we directly invest in.
But, does it work?
First, I needed to understand what RECs are. A REC represents the social and environmental benefits of a megawatt hour (MWh) of clean electricity generated. It does not represent the actual energy generated. A clean energy generator has two income streams derived from production of clean energy. One income stream comes from the actual energy produced, which is sold to users on the grid. A second income stream is derived from the sale of RECs. RECs can be sold either bundled with the actual electricity produced, or unbundled from the electricity and sold separately. So, if a company like Arcadia tells me that I'm using the clean energy represented by the unbundled REC, am I really? Didn't someone else purchase and use the actual clean energy produced, without spending additional money to buy the associated REC? I learned that RECs aren't really energy at all.
Why is there any market for created products like RECs? Because utilities are required by law in many states to make sure a certain percentage of the power they purchase for their customers comes from alternative sources. These individual state laws are called Renewable Portfolio Standards, and every state has its own unique version. A utility can meet its state RPS requirement by purchasing RECs. Ahh.... so now I've found the purpose of RECs! So a utility doesn't really have to purchase alternative energy to meet state RPS requirements, it can simply purchase the "social and environmental benefits" of alternative energy? Well, sort of. Many states put some sort of qualifiers on what RECs count towards RPS compliance. Certain types of generators, certain locations for generation. Many states contain a requirement that some or all RECs purchased for compliance must come from sources in the state, in the region, or physically able to be used by the utility taking the credit. Apparently this is what causes unbundling of RECs from the actual energy produced. A utility is only going to buy those RECs it needs for compliance. Therefore, the RECs necessary for compliance in any given state or region are the most valuable. After that, the value of the REC can decrease sharply, because nobody needs to purchase it.
Not all RECs are created equal. In a state with substantial renewable/alternative energy supply, there will be many more RECs created than needed for RPS compliance. There's no real market for these RECs after utilities purchase what they need for compliance. Therefore, they end up in the "voluntary" REC market, where entities purchase them for the right to say they "use 100% clean energy." The intent is that one KWh of dirty electricity used is offset by one KWh of clean electricity generated somewhere else in the world. Some experts contend that this is just wishful thinking and that voluntary REC purchases are nothing but "green washing."
RECs are not offsets and the voluntary green power market does not reduce emissions from electricity generation.
The problem is that green power markets, as currently structured, cannot achieve this goal. They were created on a fundamentally flawed foundation—that buying a virtual attribute can substitute for physically consuming a specific good or service. Further, the incentives of the participants in green power markets—power companies selling RECs, intermediaries marketing them, organizations certifying them, and companies buying them—are aligned, leaving no one with a strong interest in questioning the claims being made.
With these concerns in mind, we are challenging everyone to question their own assumptions about voluntary green power markets.
Nonetheless, claims that voluntary RECs reduce carbon emissions are highly suspect. Their direct effect is not to reduce net emissions, but to shift responsibility for emissions between parties. They only reduce net emissions, if at all, indirectly, by demonstrating demand for clean energy and by providing a modest boost in revenue to the clean electricity industry.
It's weak tea. Buy voluntary RECs if you like, they're cheap as hell, but have no illusions that by doing so you are offsetting your emissions. It's like tossing your supermarket change into a Unicef jar. Whatever, it's better than not doing so, but you're not "curing poverty."
So, voluntary junk RECs in oversupplied markets are selling for a buck? Some Texas utilities are giving away free electricity, too, in order to deal with the glut of wind energy produced in the state that peaks at night, when electricity use is lowest.
If an unbundled REC can be purchased for a buck, how much is a company like Arcadia charging to resell it to consumers like me?
We offer a flat-price premium of $0.015 per kWh for 100% Wind Energy in all states except for Oregon and Washington state.
I can come to no other conclusion than to think that this scheme sounds like something P.T. Barnum would sell at a trashy carnival. Somebody's getting rich somewhere, and it's not the generator. I don't want to increase my electric bill by any unnecessary amount, so I won't be signing up for Arcadia Power. They can quit bombarding me with advertisements now. Decision's made.
But here's the part that really, really concerns me:
Arcadia Power pays your local utility directly and provides you with a consolidated statement each month that combines your local utility charges with your clean energy from them.
Arcadia Power simplifies your life by providing every customer with automatic billing – either with a credit card or direct debit from your checking account. We provide you with an easy-to-read e-statement every month and you never have to worry about missing a payment!
Do educate yourself before allowing your carbon footprint guilt to toss spare change in the climate change Unicef jar each month in order to save your soul. Make sure your clean energy dollars aren't going to buy P.T.
Barnum a yacht and his own, private island in the Caribbean.