Frequently Asked Questions
The Green Power Partnership provides responses to some common questions that can help increase your understanding of the green power market and the Green Power Partnership program.
The GPP team will be adding additional questions and answers over time, as they are identified. The questions and answers are organized into broad topic areas. Due to the diversity of questions and topics areas, users can use the search box to find questions and answers relevant to their areas of interest.
| Topic Area | Question | Response |
|---|---|---|
| Access | Is access to green power supply uniform and why does access matter? | State policies, electricity market regulatory structures, and a range of technical factors present both challenges and opportunities for accessing green power. A recent report by EPA found that access to green power supply options is not uniform across the United States or for specific consumer segments. An estimated 16% of total U.S. residential consumers and 22% of total U.S. non-residential consumers do not have access to any other supply option other than unbundled RECs. The report also acknowledges that few consumers have access to supply options that offer direct economic benefits. Lack of consumer access to green power supply options is a potential deterrent to faster market transformation and can be a barrier to meeting long-term environmental objectives at the organization, local, state and federal levels. For more information about access, please visit Leadership and Access |
| Access | Is green power widely available? | Green power is increasingly available nationwide. While blended and block products are limited to green power programs in states that have competitive electricity markets or to service territories of utilities with green pricing programs, green tags are now available nationwide. In addition, on-site generation is available nationwide as renewable resources permit. For more information about access, please visit Leadership and Access |
| Certification | Is double counting a problem for voluntary consumers? | One of the major concerns with buying green power is ensuring that purchasers get what they pay for. It can be difficult to substantiate claims made about the quantity and characteristics of the product purchased. Also, it is important to ensure that two organizations are not claiming to have purchased the same green power or are double-counting the same green power benefits. Moreover, purchasers may be unable to ensure public acceptance of their purchase and avoid criticism from external stakeholders without independent information about the product. Third-party certification addresses these concerns by setting standards for green power products in the following areas: • Minimum levels of environmentally acceptable renewable resources • Overall environmental impact • Ethical conduct for suppliers, including advertising claims and regular reporting Third-party certification usually also requires independent verification by an auditor to document that green power sellers have generated or purchased enough renewable energy to match their sales commitments. Learn additional information about third-party certification and verification. |
| Certification | What is third-party certification and why is it important? | The voluntary green power market is essentially a free market economy—an economic market driven by consumer preference and run by supply and demand—with little regulatory oversight. As such, it can be difficult for buyers of green power to know whether they are buying credible products from credible suppliers. For this reason, EPA recommends, as a consumer best practice, buying green power products that are third-party certified and verified. Green power products certified by an independent third-party offer consumers a higher level of certainty about the integrity of their purchase. In meeting specific environmental and customer protection guidelines adopted by the certifying organization, you can be sure that your purchase meets nationally accepted standards for resource and product quality. Learn additional information about third-party certification and verification. |
| Finance | Does green power cost more than conventional power? | Green power generally costs more than conventionally generated electricity. The price premium varies according to the type of green power product (see additional information below regarding different green power products), with typical premiums of 2 – 2.5 cents per kilowatt-hour. Some green power sources such as wind energy are becoming cost competitive with conventional electricity. In addition, a number of states have developed incentive programs that help lower renewable energy costs. As more organizations choose green power, costs for renewable energy technologies will continue to decline. |
| GHG | What sort of avoided emissions claims can I make based on my green power usage? | While renewable energy users that own renewable energy certificates (RECs) or similar market-based energy attribute certificates have unique ownership and claim to the emissions attributes of the associated electricity generation, they generally do not have a unique claim to the impacts on regional grid operations and emissions. Learn more information on environmental claims. |
| GPP | How has the Green Power Partnership protected human health and the environment? | The U.S. Environmental Protection Agency (EPA) established the Green Power Partnership (GPP) in 2001 to protect human health and the environment by increasing organizations' voluntary green power use to advance the American market for green power and the development of those renewable electricity sources. The Green Power Partnership helps to achieve Clean Air Act requirements by reducing the pollution and the corresponding negative health and environmental impacts associated with conventional electricity use. Since the inception of the Green Power Partnership, the voluntary market has grown by nearly 5,000 percent. The program provides a framework that includes credible usage benchmarks, market information, technical assistance, and public recognition to companies and other organizations that use green power. In return for technical assistance and recognition, Partners commit to use green power for all, or a portion, of their annual electricity consumption. Learn more information about the Green Power Partnership program. |
| Green Power | What is the difference between renewable electricity and green power? | Green power is a subset of renewable energy and represents those renewable energy resources and technologies that provide the highest environmental benefit. EPA uses the market definition of green power as electricity produced from solar, wind, geothermal, biogas, eligible biomass, and low-impact small hydroelectric sources. Customers often buy green power for its zero emissions profile and carbon footprint reduction benefits. Renewable energy includes resources that rely on fuel sources that restore themselves over short periods of time and do not diminish. Such fuel sources include the sun, wind, moving water, organic plant and waste material (eligible biomass), and the earth's heat (geothermal). Although the impacts are small, some renewable energy technologies can have an impact on the environment. For example, large hydroelectric resources can have environmental trade-offs on such issues as fisheries and land use. For more information, please visit what is green power. |
| Green Power | Should consumers always seek local sources of green power? | Green power can be procured several different ways. The main distinction among the options is the type of supplier and where the electricity generation equipment is located: on the electric grid or at the facility. For electricity delivered over the power grid, the status of utility restructuring in that state will determine whether an organization is limited to buying green power from its local distribution utility or whether it can choose among competitive power suppliers. Even if the state has no green power marketers or the utility does not offer a green power option, consumers can buy renewable energy certificates (RECs). For on-site green power, the resources available at that site (e.g., solar, wind, biomass) are the main factors determining a project's feasibility. The range of supply options in the market provides considerable flexibility to green power buyers. Consumers are able to consider factors such as price, specific green power generation resource (e.g., wind versus solar), ease of procurement, and the location and year of the generating facility in their purchasing decisions. By considering these issues, consumers may be able to choose a specific type of green power product or mix and match green power products to meet their desired goals. For more information, please visit what is green power. |
| Green Power | How does EPA define leadership and impact related to green power? | The U.S. renewable electricity market has grown substantially in recent years. In 2017, renewable energy sources, excluding hydropower, accounted for about 8% of total U.S. energy consumption and about 10% of electricity generation. Both regulatory and voluntary demand for electricity produced from renewable resources has contributed to the market's growth. But still, the use of electricity from renewable resources is still relatively uncommon in the United States. In such an environment, the simple choice to use green power is still emblematic of leadership. However, evaluating one's impact can be a more complex undertaking, particularly when access to green power is not uniform and the total effects of different consumer supply options are not always directly comparable. As a result, consumers should seek to individually optimize the impact of their green power procurement based on the availability of supply options to that consumer. Recognizing the credibility and legitimacy of market instruments to allocate and substantiate consumer use of electricity from renewable resources is key to transforming the market. For more information on this topic, please visit Leadership and Impact. |
| Green Power | What is green power? | Green Power is electricity that is generated from renewable resources. Renewable resources include: • Solar – energy from the sun's heat and light • Wind – energy from the movement of air • Geothermal – energy from heat within the earth • Hydro – energy from the movement of water • Biomass – energy from the combustion of organic materials • Biogas – energy from the combustion of naturally-produced methane For more information, please visit what is green power. |
| Green Power | What are the benefits to businesses and public institutions of green power? | Switching to green power offers a number of benefits to businesses and public institutions, including: • Environmental stewardship – Many innovative organizations are establishing environmental commitments to make their operations and practices sustainable. Switching to green power is a simple step toward a sustainable organization. • Public image – Green power can help improve an organization's public image by demonstrating environmental leadership. • Customer loyalty – Customers and investors are increasingly supportive of organizations that have strong environmental ethics. • Employee pride – Employees prefer to work for companies that give back to their communities and to the environment. • Power portfolio management – Green power can offer a hedge against the volatile prices of fossil fuels. • Power reliability – On-site green power generation cab offer greater power reliability than power distributed through the electricity grid. For more information visit Voluntary Supply Benefits. |
| Green Power | Has the demand for green power stimulated new green power development? | The National Renewable Energy Laboratory estimates that across the U.S., more than 240 megawatts of new renewables capacity has been installed to serve green power customers, with about 820 megawatts either already underway or formally announced. |
| Green Power | What are my options for buying green power? | A variety of green power supply options are available to consumers in today's market. Each supply option has its own set of unique characteristics, and consumers should weigh these different factors when determining the option that works best for them. This broad range of supply options allows consumers to select a customized green power procurement approach that best meets their energy and environmental objectives given their unique financial, operational and policy situations. In many cases, consumers use a combination of green power supply options to meet their objectives. For more information on green power supply options, please visit our web area on Voluntary Supply options. |
| Grid | Can electricity from a project be directed to a specific point of consumption on the grid? | It is best to think of the electricity on the grid as a mix of electricity sourced from various resources. When you flip a switch in your house or businesses, you can't tell which electrons came from a renewable resource and which came from a conventional resource. Instead of thinking of electrons /electricity as either clean or dirty, we should think about the environmental impact that the type of power generator has when it generates the electricity. Air pollution and greenhouse gas emissions are emitted at the point of generation for every megawatt-hour produced by conventional fossil fuel-based power plants whereas renewable resources don't emit anything as a consequence of generating electricity. So, the relative cleanness of your electricity should be evaluated at the point of generation to see how it impacts the environment. Since all electricity electrons are the same and are indistinguishable from each other, we need a way to account for the environmental impact at the point of generation and RECs are the only way to know for sure that it was from a zero-emission generation and that you can claim to be using green power. Learn more information on the US grid. |
| International Markets | Does the GPP program count Canadian-based RECs as eligible renewable electricity source towards as meeting the Partnership requirements? | The Green Power Partnership program only recognizes generation from US-based projects applied to US-based facilities. (see Eligible Scope of Green Power Use). The US-Canadian market boundary question is one that is not universally clear. The WRI GHG Protocol Scope 2 guidance (see page 65) (pdf) suggests that these are 2 separate markets because their regulatory oversight is separate. From an EPA Federal perspective, despite their being a physical grid connection between the US and Canada at several points, the two countries have separate political and regulatory boundaries. Canada and the US also do not have a reciprocal agreement to recognize their respective markets, akin to what countries within the European Union. The Center for Resource Solutions Green-e program certifies RECs to a "North American" standard under their program and they have chosen to view both Canada and the US as a single market. As a Federal program funded by US tax payers, the GPP necessarily seeks to drive demand for electricity from renewable resources within the US borders. Learn more information on International Markets. |
| Markets | How does compliance and voluntary demand work together to transform the market? | The U.S. renewable electricity market comprises those that are required to buy renewable electricity from those that want to buy it voluntarily. Whether you are required to buy renewable electricity or not, buyers generally want to make a claim—to publicly state or disclose that they are buying or using renewable energy. Mandatory markets exist because of policy decisions, such as state renewable portfolio standards (RPS) which require some electric service providers to have a minimum amount of renewable energy in their electricity supply. Voluntary markets, also referred to as green power markets, are driven by consumer preference for certain types of renewable energy. Voluntary markets allow a consumer to go above and beyond what mandatory policy decisions require and to reduce the environmental impact of their electricity use. It can be helpful to think of the mandatory market as a natural floor to the market, representing what will minimally occur with respect to renewable energy supply, whereas the voluntary market theoretically represents an unlimited opportunity above this market floor, which is only constrained by voluntary demand and capped by total demand for electricity. In order to ensure that both markets work together to increase supply, it is important that the voluntary market is separate from and incremental to the mandatory market. A purchase made by a consumer in the voluntary market must be incremental to any renewable generation claimed under the mandatory market. This concept is often referred to as "regulatory surplus," and helps ensure that double claims are avoided on the same megawatt-hour of renewable energy generation. Learn more information on Power Market Structure. |
| REC | How do REC tracking systems work and why are they important? | These tracking systems are typically electronic databases that register basic information about each megawatt-hour (MWh) of renewable generation in a specific U.S. geographical region. They issue renewable energy certificates (RECs) to the generator, signifying that a MWh of renewable electricity has been delivered to the grid. Learn more information on the tracking systems page. |
| REC | What is the difference between RECs and Project Offsets and why does it matter to my organization? | While both offsets and RECs can help an organization lower its emissions footprint, they are different instruments used for different purposes. Major differences between these two market instruments are outlined in our REC-Offsets document (pdf). |
| REC | What is REC arbitrage? | In economic and finance fields, arbitrage is the practice of taking advantage of a price difference between two or more markets. REC arbitrage occurs when RECs from one renewable electricity project are sold and replaced by less expensive RECs from another renewable electricity project. For more information on REC Arbitrage (pdf). |
| Supply Option | What is a PPA and how does it work? | A power purchase agreement ( or PPA), electricity power contract between two parties, one of which generates electricity (and that's the seller) and one which is looking to purchase electricity (the buyer). It's a type of contract that allows buyer, typically large commercial entities, to form an agreement with a specific energy generating unit. There are many forms of PPA in use today and they vary according to the needs of buyer, seller, and financing counterparties. These types of contracts typically involve a long-term commitment between the supplier and the buyer – and helps finance a renewable energy project by providing a long term stream of revenue while also providing the energy off-taker a steady cost of electricity securing a reliable, affordable source of clean energy for the buyer. There are two main types of PPAs, physical and financial. For more information on these supply options, please visit our web pages on Physical PPAs and Financial PPAs. |
| Target setting | How should an organization approach goal setting when the standard electricity mix includes a percentage of renewables? | The first step in any type of green power purchase is to understand the objectives are for purchasing green power. Then an organization should determine what green power products will help fulfill its electricity needs and decide how to procure those products. The organization considering green power should take an inventory of its electricity and thermal energy use. The next step is finding the appropriate green power solutions for the organization. An organization's motivations for purchasing green power will help decide which costs and benefits are most important and thus which type of green power is most appropriate. The green power options available to an organization are determined partly by the electricity market structure in the state in which the facility is located. If the organization's green power use goal is above what their energy supplier provides in the standard mix, then the organization's first decision is whether to generate power on-site and/or to purchase power or RECs from outside vendors. Learn more information on target setting. The Center for Corporate Climate Leadership web site also has extensive resources on target setting. |