Finance vs. Feelings: Buying Green Energy Credits

by Kevin on September 8, 2012

This is the second post in a series to¬†contrast spending, saving, and investing your money with your head vs your heart. I hope you’ll join me in the conversation.

My heart is totally green.

When we moved to Knoxville I seriously considered buying some land and a bunch of 40 foot cargo containers to build a green home. I looked at plans online and talked with my wife on how we could make it look like a “normal” house. I looked at water capturing methods and dual flush toilets.

I was totally bought in… until we discovered the costs.

Not only was it nearly impossible to find a bank that would finance construction of a home like that, but finding a decent amount of land that wasn’t out in the boonies was challenging. We ended up buying a great “normal” house.

Go Green with Green Energy Credits

But just because we live in a regular stick-built home doesn’t mean you can’t make it as green as possible, either. One of the easiest ways to do that? Buy green energy credits from your electric utility company.

I love the idea of buying a small wind generator or perhaps some solar panels to put on our roof. There’s one problem with that: we live in a relatively low wind area and don’t get nearly enough sun to rely on solar panels for electricity. (Oh, and the small issue that solar systems are extremely expensive and in my state you cannot sell excess energy back to the utility company.)

So buying credits from the utility company is the easiest way to green your power consumption aside from turning off all power using items. When you buy a green energy credits you form an agreement with your utility company to let them intentionally charge you more for your power use than you would normally pay.

The idea is that the extra amount you pay is used to pay for investments by the utility company in green technologies. It’s like renting out a little bit of solar power space from the utility rather than having to buy them and put them on your roof.

Why I Don’t Buy Green Energy Credits

The economics and business side of my brain just can’t logically purchase something for much more expensive than I could buy it otherwise. If I can buy electricity for a lower amount today, why would I help subsidize the utility company’s investments without a guarantee of lower personal rates for that investment in the future?

You might argue that without the green investments it is inevitable that my personal utility bills will rise in the future as the costs of fossil fuels increase. That may be true, but I also believe that political and economic pressure would force companies to make investments on their own without the need for me to subsidize that investment myself. (I would feel differently if by paying for green credits today I would receive guaranteed lower rates in the future.)

What about you? Do you buy green energy credits? Or have you avoided them like me?

{ 2 comments }

Mark Monnin September 10, 2012 at 2:53 pm

Have you considered a PPA from SolarCity? You don’t need to worry about the solar panels not generating enough energy to make it worth it since you only pay for the amount of energy produced. You also lock in a rate (probably cheaper than your current rate) for 5 years so you’ll save over time since energy rates will keep going up. Also, I’m sure you can set it up so you probably won’t have to worry about selling excess energy to the grid. It’s a great, cheap way to buy locally sourced solar energy.

Kevin September 10, 2012 at 6:54 pm

Hey Mark, unfortunately SolarCity isn’t in my area (and likely won’t be… Eat Tennessee isn’t known for enough sunny days to make solar a worthwhile investment at this point). Thanks for the suggestion though!

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