Here’s how to purchase renewable energy from your electric utility

As carbon emissions from fossil fuels continue to warm the planet, environmentally conscious consumers may wonder if there is a way to purchase electricity from renewable sources without installing technology like solar panels or windmills on their property.

In short, the answer is yes.

However, the option is not necessarily available to all homeowners and renters. It also often comes at a slight price premium, experts said.

Renewable energy sources — including wind, solar, hydropower, geothermal and biomass — accounted for about 21% of U.S. electricity generation in 2023, according to the U.S. Energy Information Administration.

Most of it, 60%, came from fossil fuels such as coal, natural gas and oil. These energy sources release carbon dioxide, a greenhouse gas that traps heat in the atmosphere and contributes to global warming.

The White House aims for electricity generation to be free of greenhouse gas emissions by 2035.

A growing number of individuals and organizations are choosing to transition away from fossil fuels: About 9.6 million customers purchased 273 terawatt hours of renewable energy through voluntary green energy markets in 2022, according to the National Renewable Energy Laboratory. This is five times more than 54 TWh in 2012.

In the voluntary market, customers purchase renewable energy in quantities exceeding state minimum requirements from utility companies. More than half of US states have policies to increase the share of electricity generated from renewable energy sources, although most goals remain years out of reach.

Voluntary purchases accounted for 28% of the renewable energy market (excluding hydropower) as of 2016, according to the EPA. The EPA said it helps increase overall demand for renewable electricity, thus stimulating change in the energy mix.

The bulk of the increase comes from companies, according to NREL estimates. Residential sales also grew, but more slowly.

Only one in six U.S. adults are aware that they may have the option of purchasing renewable energy, either from their electric company or another provider, according to the National Renewable Energy Laboratory’s most recent survey data on the subject, published in 2011.

“The market continues to grow every year in terms of sales and customers,” said Jenny Sumner, director of the Modeling and Analysis Group at NREL, a DOE national laboratory.

“But very few people realize” that they can participate in green programs, she added. “It’s not something that’s top of mind for most people.”

For example, energy companies may offer “green pricing programs.”

Customers in these programs — also known as utility green energy programs — pay their utilities a “small premium” to get their electricity from renewable sources, according to the U.S. Department of Energy.

The cost generally exceeds the utility’s standard electricity service cost by about 1 to 2 cents per kilowatt hour, Sumner said.

This could roughly translate to about $5 to $15 extra per month, Sumner said. She added that it will ultimately depend on factors such as the price of the program and home energy use.

Nearly half of Americans, 47%, said they would be willing to pay more to get their electricity from 100% renewable sources, according to a 2019 poll by Yale University’s Program on Climate Change Communication. On average, they said they would be willing to pay $33.72 more per month.

Green energy marketing programs

Consumers in some states can also participate in “green energy marketing programs.”

Such countries have “competitive” energy markets, meaning consumers can choose from many different companies to generate their energy. (Unlike “green pricing programs,” the company that generates the renewable energy may not serve as a utility to the customer, which distributes the energy.)

Residential green energy options are available in these states with competitive (also known as “unregulated”) markets: California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Texas and Virginia, according to the U.S. Department of Energy and Environmental Protection Agency.

These also tend to come at a premium, although in some areas they “may be priced competitively with default electricity options,” the agencies wrote.

Community selection compilation

Through Community Choice Aggregation programs, local governments purchase energy from an alternative green energy supplier on behalf of their residents.

The municipality essentially serves as the community’s electricity supplier, Sumner said. These programs are particularly common in California, she said.

Unlike other types of programs, residents generally do not have to participate in community choice programs; It’s usually automatic and consumers can opt out if they wish, Sumner said.

Just because a consumer chooses renewable energy does not mean that electricity is pumped to them they The house comes from those renewable sources.

This may seem strange. But this is due to the physical nature of electricity and its movement through the common electrical network.

“Once electrons are injected into the grid, there is no way to determine that these electrons are green and not green,” said Joydeep Mitra, head of the Energy System Program at Michigan State University. “Nobody knows which electrons go where.”

Green energy programs rely instead on “renewable energy certificates” or RECs.

Mitra said the certificates are essentially an accounting mechanism for generating and purchasing renewable energy.

You may not get green energy, but someone does, somewhere. The RECs are tracking all of this.

Any consumer—even one who doesn’t have access to a green energy program through their utility—can purchase a REC as a separate, stand-alone product. It’s a way to provide additional financing for a renewable energy project, which is typically sold through a broker or marketer rather than a utility, Sumner said.

Purchasing these certificates separately does not affect a consumer’s existing utility service relationship.

Experts recommend choosing a green energy option or REC that has been verified by an independent third party.

That’s because voluntary sales and purchases of renewable energy are not subject to government oversight, according to the Environmental Protection Agency and the U.S. Department of Energy.

One such independent body is the Resource Solutions Center, a nonprofit organization that oversees the Green-e certification standard, the agencies said.

For example, Green-e monitors the disclosures that energy suppliers make to consumers about renewable energy, and verifies that purchasing that energy does not count toward government energy mandates, among other things.

In this new series, CNBC will examine climate change Meant for your moneyfrom retirement savings to insurance costs to career prospects.

Has climate change left you with larger or new bills? Tell us about your experience by emailing me gregory.iacurci@nbcuni.com.