Is There Greenwashing in Renewable Energy Purchasing?

This week I started my summer internship at a small solar energy company based in North Carolina. My fellow environmentalists won’t be surprised to hear that renewable energy will almost certainly be the path to sustaining future generations on this planet. Transitioning to renewable energy is absolutely essential, as we cannot clean up our global carbon footprint by improving energy efficiency alone. 

The first thing I needed to learn before beginning this internship was exactly how someone can “buy” renewable energy. I have heard of universities and big corporations buying “renewable energy certificates,” but never understood how they could claim their transition to “100% Renewable Energy” if they are buying renewable energy from a different state, which is the case in many instances. For example, my university in Rhode Island on the east coast claims high percentages of renewable energy use by purchasing energy from an undisclosed wind farm in Texas. Does this renewably generated electricity get magically transferred through transmission lines all the way across the United States and miraculously land directly in the hands of the consumers who purchase it? Definitely not! It gets a little confusing in this area, so I am going to walk through it step by step. 

Renewable Energy Certificates, or, RECs, can be bought, sold and traded, and represent the environmental benefits of buying electricity generated from renewable energy projects. A renewable energy project may generate electricity through any installation that harnesses the power of natural resources that can be replenished within the human lifespan. For example, renewable projects may be wind, solar or geothermal farms. Renewable energy is oftentimes sold separately from normal commodity, fossil fueled electricity that may be generated through a coal fired power plant or burning natural gas, for example. Purchasing RECs does not necessarily mean you are using energy generated from renewable sources directly in your facility. Purchasing an REC merely suggests you are providing financial support to incentivize carbon-neutral renewable energy systems, such as solar, wind, and geothermal power, by providing the producer of this electricity the monetary means to continue generating electricity from these renewable sources. Buying RECs as a consumer might mean you are actually purchasing renewable energy from another state that will be used by a different entity entirely, while your facility might be using energy from a coal fired power plant. 

I think that this is one of the most common misperceptions people have about RECs and buying renewable energy. Most of the time, the renewable energy purchased is not delivered directly to the consumer. This electricity will go into the grid and be used by people local to the renewable energy project. For example, Brown University in Rhode Island purchases RECs in Texas. This electricity flows into the grid within the state of Texas, and Brown merely subsidizes the cost of this wind generated electricity, This makes it cheaper for local residents of Texas to pay for wind energy, while making it easier for the wind farm to compete with conventionally generated electricity.  

While purchasing RECs certainly promotes the development of renewable energy systems, some environmentalists see it as a form of greenwashing. Greenwashing occurs when a corporation or entity spends time and money marketing themselves as “green” or environmentally friendly, when, in reality, they are not realistically reducing their environmental impacts to the extent that they appear to be. While RECs are not necessarily greenwashing, there are much better options to ensure that your facility is not contributing to climate change by using fossil fuels for energy production. To explain how this works in real life, RECs are typically bought after the renewable project was already financed and put together (again, the “project” may be a development such as a solar or wind farm). So, if these RECs were not purchased, this project would exist regardless of the entity contributing financially. 

Most corporations and universities get electricity from local utility companies, many of which do not have any renewable energy production mechanisms at present. Many entities therefore mistakenly think that they cannot get electricity generated from renewable energy sources delivered directly to their campuses, because there are not currently any renewable projects in their areas. This is where they are wrong! I hate to say it, but, many times, RECs are an extremely easy, cheap cop out used to claim renewable energy use, when, in reality the purchase of RECs does not really drive change towards cleaner energy generation. In fact, RECs are so cheap, often less than one dollar per megawatt hour, that the financing is practically irrelevant to developers in many cases. Companies can often claim high percentages of renewable energy use oftentimes for a cost of less than one percent of their utility bill. Real change will cost a significantly higher amount of money, and rightfully so – this is why RECs should have higher prices. As environmental blogger Stephen Lacey says, “Cheap RECs actually make the climate problem worse, because they distract us from real solutions.” To reiterate, buying RECs does not necessarily contribute to the development or maintenance of renewable energy projects, and therefore does not make as big of an impact on climate change as these entities claim.

So, what can a corporation or entity do to legitimately reduce their carbon footprint without greenwashing? Businesses should actually develop the clean power sources themselves! Universities and corporations can sign contracts with solar or wind farm developers to help them begin a renewable project in their locations vicinity in order to ensure that they are directly contributing to a reduction in fossil fuel use, and deliberately developing renewable energy projects. This is what the company I am interning with does! Carolina Solar Energy provides design, financing, construction and operation management of utility scale, or large scale, solar projects. 

Another option for businesses that cannot commit to developing a renewable project, is to purchase “policy tags” rather than “green tags” (as RECs are often called). For example, for every megawatt hour of energy your business uses, donate a few dollars to an entity working to develop policies that will help combat climate change, rather than purchasing RECs. Lacey suggests donating to groups like CERES, Protect Our Winters, NRDC, or Grist.

This week has definitely been eye opening to me, and has reminded me why I have entered the environmental field. For example, did you know that there are many places or countries which actually don’t allow solar to be installed whatsoever? Simply because it is an inconvenience to their county, or because it is taking away revenue from local utilities (AKA the fossil fuel industries that are responsible for the degradation of the planet we rely on for survival).  There are so many new things I’ve learned in just a week working here!

Regardless, large entities should most certainly be held accountable for their enormous contributions to our changing climate. They should not take the easiest way out of poorly publicized fossil fuel use – they should transition to renewable energy. They have the financial means to, and have the public standing and legitimacy to make widespread change. I am calling all universities and corporations to no longer take the easy way out when it comes to saving our planet, even if they have good intentions!!

2 Comments Add yours

  1. cannabidiol cbd oil says:

    Thanks for keeping me updated! Articles like this are perfect reads to keep up with the industry!

    1. Kaitlyn L Cook says:

      Thank you for reading, I appreciate it!

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