Renewable energy sources such as solar and wind power could be a major step toward cutting carbon emissions and curbing climate change. A growing number of people are interested in powering their homes with “clean” energy, and utilities are taking note.
Making the move to solar can be expensive for homeowners. The cost of solar has been falling for years, but is still far from cheap — bills for solar panel installations can run close to $10,000.
That kind of investment is out of the question for most, but it doesn’t mean there aren’t other options for supporting renewable energy.
Utilities across the state, including Indianapolis Power and Light, offer green power initiatives for customers who want a portion — or all — of their energy bill to go toward renewable sources.
But once you check the box, what happens next? What energy sources will your money support? Can you really ensure that the energy coming into your home is “clean” power?
These are questions that Alex and Wendi from Indianapolis, as well as other readers, have asked us through our Scrub Hub initiative.
To find out, keep reading.
The short answer
IPL’s Green Power program allows residential customers to select either 25%, 50% or 100% of their monthly energy bill to be put toward renewable energy sources in the Midwest.
But because of how the grid works, it would be impossible to ensure that the renewable energy you purchased would power your home directly.
Instead, opting into the green power program means that amount from your monthly bill goes directly to green energy producers, such as solar or wind farms, in the form of renewable energy certificates.
For example, if your household uses an average of 1000 kWh monthly and you selected 100% participation in the green power option, then IPL would buy 1000 kWh worth of renewable energy certificates from a renewable energy producer.
Although many utilities across Indiana offer the option to purchase these certificates, IPL’s option is one of the more affordable ones, at an increase of roughly $1 to your monthly bill.
For more details on renewable energy certificates, how they work and why the industry uses them, read below.
The long answer
Renewable energy certificates are an important — albeit slightly confusing — aspect of purchasing green power.
As stated above, once “clean” energy is input into the grid, it’s impossible to differentiate it from other types of energy.
To help keep track of what “clean” energy is generated, certified solar generators, wind farms and other renewable producers issue renewable energy certificates that promise they produced that amount of electricity from renewable sources. These certificates, which are standardized by the federal government, are sold independently of the electricity actually produced.
This means for every 1000 kWh of “clean” energy produced, exactly 1000 kWh worth of renewable energy certificates exist. When a utility like IPL purchases one of these certificates, they are purchasing the rights to that electricity’s “green” qualities.
To return to the example above, if you opt in to 100% green power for your 1000 kWh monthly bill, then IPL’s purchase of renewable energy certificates on your behalf certifies that 1000 kWh worth of renewable energy was produced, and they bought the rights to it.
IPL started offering the green power program about a decade ago said Zac Elliot, IPL’s manager of customer programs, and it’s an option customers have been vocal about supporting.
Interest in solar power is rapidly growing in the United States and the federal Bureau of Labor Statistics estimates solar installation will be one of the fastest-growing job markets in the next decade. At the same time, the growing wind industry is the largest source of renewable energy and now represents 7% of electricity in the country.
“Frankly, the world is changing and customer expectations are changing,” Elliot said. “So we reflect the desires and interests of our customers.”
The green power initiative has been “highly successful,” Elliot said. More than 6,600 customers had signed up, as of April.
IPL charges customers $0.001 per kilowatt-hour for green power. That means a household that uses 1000 kWh each month would pay between $0.25 and $1 on top of their monthly bill for green energy, depending on the percent of green energy they choose.
The price has increased in recent years — before September of last year, it was $0.0025 per kilowatt-hour — but it is still one of the cheapest options for green power around the state.
In comparison, purchasing 1000 kWh of green power from Indiana Michigan Power’s Green at Home program would cost you an additional $9.50 per month. From Duke Energy’s GoGreen program it would cost $9, and from Northern Indiana Public Service Company, it would cost $2.86.
In comparison, purchasing 1000 kWh of green power from Indiana Michigan Power would cost you an additional $9.50 per month. From Duke Energy, it would cost $9. And from Northern Indiana Public Service Company, it would cost $2.86.
Different utilities purchase certificates from different sources.
Elliot said in the last year, IPL has primarily been buying certificates for wind power from around the Midwest.
Duke Energy, on the other hand, purchases certificates for its GoGreen program from Indiana solar projects, such as Goshen Solar or Lake County Solar, a spokesperson said. Previously, they purchased certificates from Iowa wind farms.
Green power is available for IPL’s business customers as well, at participation from 10% to 100%.
While more than 6,600 customers may be signed up for green power with IPL, the utility serves 500,000 customers overall, so just a small portion of the utility’s base is participating in the initiative.
But Elliot said he anticipates the green power program only growing in the future.
“The trend is that customers are more and more interested in renewable energy adoption and in general sustainability initiatives,” Elliot said. “We recognize that the customers’ expectations have been changing dramatically over the course of the last decade.”
To sign up for IPL’s Green Power program, make the changes to your account online at iplpower.com.
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IndyStar’s environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.