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Green Power Basics

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What Is Green Power?

Green power can be defined as energy from indefinitely available resources and whose generation has zero/negligible environmental impacts, whether through reduced emissions or minimal environmental disruption. Such sources of energy include:

How Does EPA Purchase Green Power?

EPA acquires green power in one of three ways:

In each instance, EPA pays a premium for the cost of producing green power and the further development of renewable resources. Learn more about the difference between delivered product and green tags in EPA's document Green Power: Tags vs. Delivered Product (PDF) (3 pp, 233K, About PDF).

Delivered product can occur whenever a green power source and a green power consumer are connected to the same grid/power pool. The electricity from a green power source offsets demand from conventional sources of energy, and the consumer pays the additional cost of green power generation and transmission.

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Onsite generation is the production of green power in the location of consumption. The consumer pays for the installation of equipment and maintenance, but saves the transmission costs that come with delivered power and often enjoys a reduced electricity bill. An added benefit of this form of green power is that it doubles as a visible demonstration project that educates the community on the use of green power.

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Renewable Energy Certificates represent the environmental benefits of green power. They support the development of a green power product at a reduced cost, but the consumer need not be connected to the power source. The consumer pays two bills, one for the power and the other for the RECs, which represent the environmental benefits of green power over traditional sources of electricity.

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Green Power Purchasing Options

Green power can either be purchased from off-site providers or produced via onsite generation. Purchasing delivered green power/RECs from an off-site provider currently costs slightly more than purchasing conventional power. This cost can be minimized, however, by entering into long-term contracts with the provider, which allows the purchaser to lock in a fixed-rate contract and increase opportunities for reduced pricing.

Alternatively, renewable energy technologies can be installed on the site of the consuming building. This option has a high initial cost, but produces "free" energy and, consequently, lower energy bills after the payback period. Additionally, federal and state governments offer incentives to reduce the initial cost of a green power installation. Moreover, as with any new technology, the price for onsite renewable energy has fallen and will continue to fall. As the market for green power grows, equipment will be manufactured in larger volume, thus meeting economies of scale.

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