Green Certificates & Tags – Renewable Energy at a Price
With global warming becoming a hot-button issue in society, green tags are being tossed around as a potential solution. Also known as green certificates, green credits, or renewable energy credits, they are available for purchase by utility companies, businesses, and even individual homes.
Let’s say you turn on a lamp sitting on the desk next to you. Electricity flows from the grid in your area into your home or office, where it eventually powers that light. You don’t have any choice where that electricity comes from you, nor can you choose how it’s produced. Electricity simply flows from wherever it is available directly to the lamp.
Companies and individuals who are concerned about pollution caused by electricity produced via fossil fuels like coal or natural gas may not be happy with this system. They want a way to power their needs from a more environmentally-friendly source, like wind or solar energy. But solar panels and wind turbines are incredibly expensive, cumbersome, and may be ineffective in some environments.
A green tag is a way to harness the benefits of these types of power without being in an area powered by them directly. When a renewable-energy producer generates a unit of power, they put it into their local grid. In return, they receive a green tag if they operate in a state or region in the program. They then are able to sell this tag as a separate commodity from the electricity that they produced. This means a person who lives in an area powered by fossil fuels can buy this tag and effectively offset their own use of dirtier electricity. They won’t actually use the electricity themselves, but they’ve made it available for use elsewhere.
There are some controls in place in the system to make sure these tags count for something. Utilities producing “clean” energy have to account for each unit they put into the grid and make sure that only a single green tag is generated. This prevents them from selling multiple green tags for a single unit of energy. However, there is no national database for tracking the sale of green tags and electricity, nor are there currently many controls on the regional level. This is changing, but some potential for abuse within the system still exists.
The price of green certificates can vary greatly, and it is somewhat difficult to buy them as an individual since renewable-energy producers usually sells them directly, or they are handled by brokers. The best bet is to ask your current utility company whether they have a program in place to use green tags or make them available for their customers to purchase. It’s one of the best ways to make a change – however small – with your own energy use.