A growing chorus of companies mostly unknown to the wider public is seeking to convince people you don’t need solar panels on your roof to go green.
The intrigue: Instead of writing about this from afar, I’m experiencing it firsthand and sharing my experience. I have signed up with Arcadia Power, a DC-based startup founded in 2014 that’s leading this sector with a digital focus.
Yes, but: I don’t suddenly have wind and solar directly powering my home now. Arcadia is trying to simplify a more complicated dynamic that's at play due to how our electricity systems work.
The big picture: Out of America’s 127 million households, about 3.7%, or roughly 4.7 million, buy green electricity through different programs. That figure has grown nearly 250% since 2010.
Driving the news: Those numbers are extrapolated from new data out of the Energy Department’s National Renewable Energy Laboratory. NREL estimated that in 2018, there were 6.3 million green electricity customers, and around 75% are typically homes.
“The big idea is to make this easy and simple,” Arcadia CEO Kiran Bhatraju said of choosing renewable power. His goal is to put Arcadia in a position to do for energy consumption what Uber does for transportation, Mint for finances or Kayak for travel.
- The challenge has traditionally been that people care less and engage less with their energy consumption than they do these other things.
- That’s starting to change. Concern about climate change is growing, wind and solar are becoming more readily available and affordable, and some people are beginning to wonder how they can cut their own personal carbon footprint.
How it works: All electrons flowing through power lines are the same, so being able to specify what kind of energy I'm using is impossible (unless I put solar panels on my roof, as about 1.5% of households do). Arcadia officials describe our power systems to their customers as "like pouring a bottle of water into a lake and trying to distinguish between the two sources."
- That's where renewable energy certificates, or RECs, come in. These accounting credits are created when wind and solar farms begin operating, and companies can buy them (individuals can but rarely do) from those who developed the energy.
- Buyers of RECs then can claim ownership over a certain amount of renewable electricity.
There's a catch, though. RECs aren't necessarily geographically bound. The RECs I purchased through Arcadia are coming from a wind farm in a different part of the country (probably Texas, which has the most wind power). And my actual local electricity mix hasn't changed. Say, what?
- Yeah, it isn't intuitive, but this is actually how most claims of "100% renewable energy" work, via tracking systems overseen by state energy regulators.
- The RECs process raises concerns, including over perceived transparency and whether the purpose is to just track renewable energy or actually encourage more of it.
Arcadia Power’s main green offer is 50% wind energy (via RECs) for free by signing up. This is what I chose.
- They also offer 100% wind energy at an additional cost, which ends up being about $10 a month added to your bill.
- Another feature is a promise that my electricity bill won’t be higher than what it was before, and it could be lower. This assumes similar usage. You can’t leave your lights on all day and crank your AC thinking wind and solar power is free — it’s not.
- The company makes this promise by looking for better electricity rates than from your default utility.
- But it can only offer this in certain states where electricity systems are competitively based. This is the case in a little under half the country and includes Washington, D.C., and Maryland.
Additional perks include a user-friendly app showing my power usage breakdown and the ability to pay my bill to my utility via Arcadia using my credit card for no extra charge.
- That selling point may seem trivial, but it’s actually a big draw because people often prefer paying that way (for points and other reasons). Pepco charges extra for credit card charges.
Arcadia and other companies like it have other products too, including the ability to sign up for community solar (akin to your local community garden).
- That’s when a bunch of households pool together — via a company like Arcadia — to provide the demand to build a nearby solar project — on the roof of a local building, for example. State (or the D.C.) government determines the size and amount of community solar.
- To that end, it’s a hot commodity. Arcadia has a waiting list for D.C.-area community solar, and another company I talked with — CleanChoice Energy — just announced a D.C. community solar project that already filled up.
- This product is usually a pure cost-saver, so people who sign up should see 5% or so off their bills.
What’s next: Stay tuned for a deeper dive on RECs (try to contain your excitement) and any updates as necessary with my experience with Arcadia Power and like-minded companies.