Residential utility electricity customers in Florida have been receiving emails from a company called Arcadia Power that promises to sell you clean energy, even without installing solar panels or wind generators on your property. First, Florida residents should know that this is not a Florida company based in Arcadia, FL. It is based in Washington, D.C., and offers services nationwide. Now that that’s clear, it is important to point out that Florida residents cannot legally purchase electricity from anyone other than a public utility. That is the law of the land, and Florida is only one of four states that has this arcane regulation still in place. The industry is soliciting the public’s help to get a 2016 ballot amendment to change this, and you can do your part by signing the Floridians for Solar Choice petition (don’t be fooled by the rival utility-backed initiative).
So if you as an individual or business can’t legally buy power from a third party (or sell it as a third party), how can Arcadia Power or other companies sell you renewable energy without breaking the law? Well, they are not actually selling you electricity. They are essentially just taking over billing responsibility and charging you a premium for the same electricity you are already buying. That’s right – they just add 1.5 cents per kilowatt hour (about 15%) to your regular electric bill, collect the money from you, and pay your regular utility company.
So are you really buying green electricity? The answer is yes and no. What they are doing is buying/producing electricity from wind farms and selling that electricity to utility companies on the electric grid. Utility companies are willing to buy this electricity for a variety of reasons, some of which are financial, and some are regulatory. That doesn’t mean they are selling the electricity to your utility company, however. The idea here is that your electricity use is offset by renewable energy that is pumped into the electric grid. Your home will still be powered by the same predominantly natural gas, nuclear, and coal fuel mix that powers Florida’s utility plants today.
What you are doing with this service is buying Renewable Energy Credits (RECs), which is a commodity that certifies that a unit of electricity was produced with renewable energy sources. These RECs are bought and sold on the market to allow utility companies and others to meet Renewable Portfolio Standards (RPS). The State of Florida, again behind the times, does not have a RPS established by law, and therefore there is not a robust market for RECs in this state. Utility companies have successfully lobbied against efforts to produce a mandated fraction of energy with renewables. Individuals can purchase RECs to offset the environmental impact of buying “dirty” non-renewable energy from Florida’s utility companies. There is no requirement to do so, and no direct benefit other than feeling good that you have done your part.
Arcadia Power has wrapped up the sale of RECs in a neat little package that simplifies REC purchases for consumers. For those that truly want to contribute in this way, they provide a suitable method to do so, even if you live in an apartment or condo where you can’t install your own solar energy equipment. You will not save money (your electricity will cost about 15% more). You will not be “running on solar energy” in reality. You will not be buying actual renewable energy for your home, and you will continue to use the same utility company.
One of the stated features of this service is that you don’t have to install anything on your home to benefit from renewable energy. This is pretty slick marketing, but an apples to oranges comparison with installing distributed solar energy or other renewable energy products at your home. If you really want to benefit in a financial sense and make a bigger impact on the environment, it is unquestionably better to install your own system. But if you can’t because of where you live, or you just want to make a small contribution on a monthly basis, this product might be good for you.
You can think of this as a voluntary tax or sorts that goes to a specific cause. It’s like planting a tree if you drive a gas guzzler. It’s not a bad idea, but make sure you know exactly what you are buying before committing to this program. You may find that your money is better spent installing your own solar energy system and reaping more than just a clear conscience.