Answering the Customer Call for Clean Energy

April 20, 2023

Today’s consumers are more mindful than ever of the environmental impact of their daily lives; nowhere is that more prevalent than in our energy usage. With a heightened interest in carbon-free, “clean” energy sources, more and more consumers prefer to choose brands with purpose and values that align with their own.

A competitive energy market helps answer customers’ demand for carbon-free energy by empowering families and businesses to shop for and choose a retail energy supplier that offers 100% carbon-free energy, rather than relying on the one-size-fits-all plans delivered by monopoly utilities.

Monopoly markets disempower consumers. In these outdated markets, consumers have no say in the energy that they purchase. But in a restructured retail market, consumers can vote with their wallets, reducing their impact by selecting the power generation methods of tomorrow, and opting for wind, solar, or other more sustainable options.

As of 2023, seventeen states have answered consumers’ calls for more affordable, cleaner, reliable, and individually tailored energy options by breaking the utility monopoly and creating competitive markets. More should follow. Consumers have proven they want the option to choose — and to find a plan that best suits their unique needs, whether that be price, customer service, or clean energy use.


Carbon-Free Power Options and the Power of Choice

Over the past few years, renewable energy — power derived from naturally replenishing sources such as solar, wind, or hydro — has become far more common and cost-effective. Policymakers now understand these energy sources provide a host of benefits, not just for the planet but for consumers, too. But those aren’t the only options. Many are choosing other carbon-free energy sources of power too, like nuclear.

And consumers want the power to choose which they use.

According to a recent poll of Massachusetts consumers by SurveyUSA on behalf of CleanChoice Energy, 83% of respondents said they want to be able to choose clean, renewable energy as a source for their home electricity. In Connecticut, 80% of respondents said that renewable or clean energy products are important services to offer, and 58% said they would be willing to pay more for those services.

A recent Yale and George Mason University survey also supported the notion that Americans are willing to pay more for renewable energy. On average, they are willing to pay an additional $16.25 per month. About one in six (17%) say they would pay between $1 and $10 more, while 15% are willing to pay between $11 and $30, and 14% are willing to pay between $31 and $200 more.

What’s more, given the volatility of wholesale energy prices (driven largely by natural gas prices), 100% renewable or carbon-free energy plans don’t always cost more than default service because these resources have no fuel risk. In many cases, like in the winter of 2023, 100% renewable or carbon-free plans offered by retail providers were often beating default service on price. At the end of the day, the benefit of shopping the market is that you might find a product that aligns with your values and beats the price of standard service. 

However, without restructured retail markets, many consumers are stuck with whatever energy source is offered by their utility. Energy choice brings value that goes beyond the “commodity” price. If you want 100% carbon-free energy, there’s a supplier who will provide it. When it comes to energy, it truly is about more than price. It is about what consumers can do to make a difference in their own lives now and for the future of the planet.


Renewable Energy Certificates 

A Renewable Energy Certificate, or REC, is a market-based tool that represents one megawatt-hour (MWh) of electricity generated and delivered to the electricity grid from a renewable energy source. RECs incentivize the development of new renewable resources by providing a financial instrument that can be traded. 

Contrary to common misconceptions, RECs do not affect the reliability of the grid. The flow of electrons is still managed by the utility and the purchase of RECs only tracks and determines the ownership of renewable electricity generation and use. Since it is impossible to track the origin of the physical electricity consumers receive from the utility grid, RECs play an important role in facilitating the tracking of renewable energy and helping states meet their RPS goals.

Consumers who value reducing their carbon footprint can switch to a supplier that offers more renewable energy options than their utility. RECs are the currency of the renewable energy market that allow consumers to select the generation method they most value without compromising reliability. They are a credible way to buy and sell renewable energy because they can be tracked and recorded. Many organizations, including competitive suppliers, use a combination of RECs and direct investments in new renewable energy projects to meet their sustainability goals.

Whether it’s a large utility-scale project or solar on your rooftop, when enough parties purchase RECs, it creates demand, provides revenue, and promotes growth in the clean energy marketplace.



How Competition Supports Renewable Energy Growth and Helps Address Climate Change

Many consumers want ways to manage costs while improving their environmental stewardship. In monopoly utility markets, residents and businesses do not have much choice in who supplies their electricity, or how that electricity is generated. 

Competitive energy markets give consumers direct access to renewable alternatives, allowing them to select and support the power generation methods critical to powering our daily lives while reducing climate impacts. The electricity sector is currently responsible for 25 percent of U.S. greenhouse gas emissions, so equipping consumers with the tools to reduce their impacts is pivotal to reaching our climate goals.

For example, in Massachusetts current state law only mandates utilities to supply slightly over 50% percent of renewable energy in their energy mix, but three-quarters of the current products offered in the retail energy choice market are 100 percent carbon-free energy contracts. Why? Because that’s what consumers want. 

When there is demand, companies will meet it with supply. Decarbonization is an all-hands-on-deck effort, and this helps to advance clean energy initiatives. 

States with competitive markets have deployed the biggest share of renewable energy resources, about 80% of our country’s total, even though they account for only about 67% of total overall capacity.

Beyond simply allowing for choice in the energy consumers use, competitive markets also encourage conservation. Suppliers work directly with consumers to provide increased data on their electricity consumption. Customers are more informed, not just about the energy they use but when they use it and how much they use. This drives efficiencies and helps consumers to use less — actions that protect the environment while generating savings.

A shift is taking place in the way we power our economy. We all understand the collective efforts that need to be made to protect our environment and address climate change. This transition may not happen at the flick of a switch. But it’s clear a driving force behind our clean energy future rests in the hands of consumers who want change and competitive energy markets that empower them to choose.

REAL Choice