Since green electricity sources like wind, solar and biofuels have yet to become the main grid, innovations have been introduced to counteract the harmful effects of fossil fuel-generated power.  One of the more notable, not to mention more popular and more affordable, alternatives are green tags.

Green Tags Defined

More formally called as Renewable Energy Certificates/Credits and Tradable Renewable Certificates, green tags are the marketable and tradable environmental commodities sold by renewable energy systems to consumers hooked up to the main electricity grid.  Put simply, you purchase green tags from producers of renewable energy to lessen dependence on non-renewable energy sources.  It’s a very eco-friendly approach to power your homes!

Green tags come in two market types.  First, compliance markets are mandated by federal government policy that promotes the use of renewable energy.  At present, there are 25 states in the United States implementing the so-called Renewable Portfolio Standard, which mandates the increased production of energy from renewable sources in relation to traditional sources by a fixed percentage by a certain date.

Second, voluntary markets involve electric consumers who willingly and voluntarily purchase green tags even without their state being part of the Renewable Portfolio Standard.  Mainly it’s the desire to be eco-friendly that drives them to do so.  It must also be noted that majority of green tags purchased come from the voluntary markets.

Green Tags Mechanism

Each time you purchase green tags, you basically pay for the same amount of electricity to be produced by renewable energy producers.  Thus, instead of your main electricity company providing your home with energy, it will be the green tags provider that will replace the power for the specified number of kilowatt-hours.  Of course, you will still pay the electricity company their bills as these relate to the energy consumption from the main grid.  However, you will be paying less since you used less of said energy.  As such, this does not mean that you will be paying double for your electricity.

Take note, however, that the price of green tags is more expensive than the price of the main grid power on a per kilowatt basis.  Prices fluctuate for green tags but the median is approximately $20 per megawatt hours.  In residential uses, the offsetting can amount to as much as two cents per kilowatt-hour.  This means that you will pay 2 cents more on green tags than on the main grid.  Still, when you come to think of it, 2 cents is still a very small amount of money to pay towards helping the environment.

The difference in prices serves a very important purpose.  It provides additional funding for more renewable energy facilities to be constructed such that more and more homes can avail of its eco-friendly services.  In turn, the higher demand will encourage lesser dependency on traditional electricity sources, hence, a healthier environment.

A word of advice to those desiring to avail of green tags: These are not the be-all and end-all of green living.  Hopefully, when you purchase green tags, you will also look into practical ways to cut down on your power consumption.  After all, green living is a lifestyle made with conscious decisions to make the Earth healthier! (And while you are at it, think global, not local)