By Natalia Hook
Going green with renewable energy sources is a great way to protect and support the environment. The most high-profile strategy for getting away from fossil fuels is home solar panel installation for electric power. If you can do it, it’s a terrific option, but there are pros and cons to going solar that should be considered first. Some homes aren’t good candidates for solar energy due to shading or location, and most renters don’t have the freedom of choosing to install a solar system.
If solar isn’t an option for you, don’t throw in the towel just yet. There are other eco-friendly alternative energy sources, including hydropower and wind power. You can choose renewable energy anywhere in the U.S., no solar panels or residential wind turbine required, with an ESCO. What is an ESCO? It stands for energy supply company, and simply put, green ESCOs make renewable energy available to you by selling it to your local electric company.
The Benefits of ESCOs
My husband and I couldn’t wait to go solar when we bought our house two years ago. We had already taken steps to increase energy efficiency in our home but wanted to go further. We had family members and friends with solar, and they were all saving money and meeting their household electrical needs. Plus, they were producing enough surplus energy to get paid a tidy sum for what they were contributing back into the electrical grid. Sign us up!
Well, between our not so large westward facing roof and the immense trees in our neighbors’ yards, it turned out our solar capacity was less than ideal. The best we could get was a 49% offset — basically the capacity to meet 49% of our household electric needs on average. It was disappointing, but we went for it anyway, figuring (almost) half was better than none. We chose to lease the solar panels and paid nothing out of pocket.
The cost of the monthly leasing fees plus the balance of our electric draw worked out to be about the same as paying for 100% of our electric from the electric company. As far as renewable energy advantages, about half of our draw is clean solar, so we were happy with that choice, even though we didn’t save any money. But what about the other half of our electric supply? It was coming from fossil fuels via our electric company. We weren’t happy about that, which is where our ESCO came in.
ESCOs, or energy service companies, offer alternatives to the default energy provided by your local electric company. They compete for your business in a number of ways, such as offering price breaks, fixed pricing, and in many but not all cases renewable energy sources. Some ESCOS offer wind or solar power, others hydropower, or a combination of different types of renewable energy. Some ESCOs offer only fossil fuels. ESCOs can be small and local or serve large regions across multiple states. It’s very likely there are multiple ESCOs available in your area.
You benefit by having a choice and selecting a supplier based on your personal priorities. Competition between suppliers drives rates down and incentives up. Suppliers benefit by having large pools of potential customers. And not that most of us were feeling too bad for the electric company, but they’re still in business as the default energy supplier and the sole delivery system for all the energy suppliers in your area.
How Do I Find and Choose an ESCO?
We actually discovered our ESCO, CleanChoice Energy, when they sent us a mailer. Many energy service companies advertise this way, and also by sending out emails to potential customers and posting ads on social media. If you’re proactively looking to shop around, go to your local electric provider’s website and do a search for a list of available ESCOs in your area.
Alternatively, you can go to www.chooseenergy.com and type in your zip code. Click on individual ESCOs to see more details, including green status, incentives, and rates. You can compare different companies and make an informed decision based on your preferences. Some suppliers offer a promotional period with a comparatively low kWh (kilowatt hour) fixed rate but follow it with a market variable rate. Others contract at somewhat higher fixed rates on an annual basis, so you pay a little more from the outset, but it takes the guesswork and the gamble out of electric market cost fluctuations. Ultimately, you decide what works for you.
ESCOs offering renewable energy choices tend to have higher prices than their non-renewable counterparts, in most cases from one-tenth of 1 cent to 2 cents per kWh above the local electric company’s rate. In 2016, the average U.S. household’s electric usage was about 900 kWh per month. Be sure to compare rates carefully — at one-tenth of 1 cent above the local market rate, that’s only 90 cents more per month, but at 2 cents above market rate, it comes out to be $18 more per month. Also, check into early termination fees if you want to take an ESCO for a test drive. Many offer no fee, no hassle termination, but it’s best to check before signing up.
My husband and I are presently paying a little over 1 cent more per kWh for a combination of wind and solar power, but as a small household, our electric usage tops out at less than 600 kWh per month, costing us about $68. And honestly, we think the importance of renewable energy is worth the extra few bucks a month. The good news is that alternative energy is a quickly expanding business. As techniques advance and more people get on board with the movement, the cost is only going to go down.
What Changes When I Select an ESCO?
As far as your responsibilities, nothing changes. Signing up for your new energy services is simple and can be done online. Your ESCO does the legwork with your local electric company. You will continue to receive your usual monthly statement because your local electric company still owns the delivery system for your electricity, and charges for its use. Your statement will show these charges and your ESCO’s charges separately.
Your local electric company will also continue to take care of meter reading, service calls, and whatever emergencies may arise. Continue to look to them for information on outages and other service issues and keep their number on hand for help with downed or damaged wires and other potential safety hazards.
If you’re wondering how you can be sure that the renewable energy you’re paying for is actually being delivered to your home for your use, well, it doesn’t work that way. All the energy entering a power plant from all origins combines. Electrons are electrons — you can’t tell a wind-powered electron from a coal-powered electron — there’s no difference between them. It’s what’s happened during the energy creation process that matters — fossil fuels burning vs. the sun shining, or the blades of a turbine turning in the wind.
When you select a green ESCO, it contracts with your local electric company for the amount of electricity that your household uses. The local electric company then purchases that amount of energy from the green ESCO. The more people with green contracts, the more green power is purchased and used — and the less fossil fuel powered energy is purchased and used.
Hopefully, the day will come when 100% of electric power is renewable. In the meantime, you can help move toward that goal by checking out the energy supply companies in your area and finding out more about the green alternatives available to you. Every household can make a difference!
Images used with permission, courtesy of Natalia Hook and www.shutterstock.com