This is part two of a three-part series on buying energy. Read more about pricing questions published last week. The remaining three questions will be published next week.
Assessing an energy supplier can be a challenge when you go it alone. After all, there’s no Michelin for energy suppliers. Working with an energy broker who has experience with a range of suppliers, their reputations, and their products is the best option for most. Before you commit to a particular supplier, be sure to compare what each supplier offers by asking these questions:
1) How do I know if a supplier is reputable and will even be around in 5 years?
Unfortunately, like all industries, the energy market has its share of poison in the well. For the first few years of deregulation, competitive energy had Wild, Wild West characteristics (Enron, anyone?) That said, a lot of suppliers have risen through the fog, maintained good business practices, and stayed in operation for many years with a good track record. As for doing the research? Google can provide a good bit of information.
Energy is the most volatile commodity in the world. Thankfully, self-interest has it that most suppliers have gone to enormous lengths to protect themselves from going out of business. That said, it isn’t failsafe. Even a reputable supplier could go out of business. That does not mean that you’d be left powerless though– your utility is legally required to be your supplier of last resort. Your utility, they’ll keep the light on for you.
2) What does it really mean to buy green energy from the grid?
Renewable energy credits (RECs) are instruments that, in theory, offset the environmental impact of the purchaser’s “dirty” energy use by subsidizing clean energy from renewable sources such as wind.
When a renewable energy generator develops a system, they are able to sell credits for this energy. A market for buying and selling credits has arisen so that consumers anywhere in the US can purchase renewable energy. Where there is not adequate roof space to install solar in a cost effective matter, energy users often opt to purchase renewable energy credits from the grid.
It is worth noting that an electron on the grid is an electron on the grid. There is no direct “hook-up” for you to get only electrons put on the grid by renewable energy.
Buying green energy from the grid nevertheless supports renewable energy, and many building owners and managers purchase RECs for Corporate Social Responsibility, attracting new tenants and improving tenant retention, and LEED certification, among other reasons.
Further, you can often offset your dirty energy through RECs and still save money over your default utility rate. Just ask! For more information about quality of RECs and more, we like this breakdown from the Harvard Business Review.
Questions? Comments? Tips? Please reach out and let me know if I can help you navigate the space and avoid pitfalls.