Consumers today have more renewable choices for their home energy, like community solar and third-party energy, if solar panels are a no-go at your place.
Community solar and third-party energy are different products and by far, the top question asked about both of these “renewable energy” options is how does the renewable energy get to my house?
For every residence in Maryland, a regulated utility — like BGE and Pepco —delivers electricity from a local grid to your home or apartment. That electricity was purchased from a mix of power plants (coal and natural gas fueled) and renewable energy generators (solar, wind farms and hydro power).
With community solar and third-party energy, this electricity delivery stays the same.
For community solar, the electricity generated at a big solar farm is fed directly into the local electricity grid. The idea is that over time, emission-free electricity will replace the climate-polluting type.
For third-party supplier contracts, again, the same electricity mix is delivered by your regulated utility to your residence. A third-party energy company, like Constellation, Inspire Energy or CleanChoice, purchases renewable energy certificates (RECs) on your behalf to re-define the electricity as “renewable.” RECs are explained below and can be from fuel sources that many buyers don’t picture as renewable (trash incinerators or burning wood.)
What’s community solar:
- Electricity made at solar farms built within your Maryland regulated utility’s area.
- For any household with an electric utility bill — renter and homeowners.
- Pricing is 5 to 30 percent less than regulated delivery and supply electricity rates.
- Solar credits are applied to your monthly utility bill, reducing the amount you pay for your electricity.
- Guaranteed savings for up to 20 years. Can exit with no fees with 90 day notice.
- Community solar offers in the BGE area: Common Energy, Neighborhood Sun, and WeSolar.
What’s Third-Party Deregulated Energy Supply:
- “Renewable” energy = (regular electricity + renewable energy certificates*)
- For any household with an electric utility bill — renter and homeowners.
- Pricing is deregulated supply. Prices have no maximum. Added fees and termination fees are legal.
- Contracts are short-term (months to 3 years). Contracts auto-renew to variable rates at end, unless you re-shop and get lower rate. Buyer beware, suppliers can sell low, then bill high when initial contract ends.
- Learn about third-party suppliers offers here.
* A renewable energy certificate (REC) is a financial instrument. From the EPA web site: A REC is created for every megawatt-hour (MWh) of electricity generated and delivered to the grid from a renewable energy resource. RECs can be generated from a variety of renewable sources like trash incinerators, landfills, and old hydro plants. It’s worth asking suppliers what RECs they buy on your behalf.
Full disclosure: I write quite a bit about deregulated Retail Choice and the poor pricing results for residential customers. Commercial customers are savvy energy buyers and benefit by choosing Retail Choice over regulated utilities energy supply.
Residential customers can save, can track their contracts and renewals and can use internet web sites to get good deals and the products they want. They can ask the suppliers directly what types of RECs are purchased, and decide if those RECs meet their standards.
As the Wall Street Journal reported in March 2021, Retail Choice customers aren’t watching their contracts and have paid $19 billion more since 2010 in the 13 deregulated states. Maryland deregulated its energy market in 1999. The contract “gotcha” is the auto-renewals that allows rates to be any price a supplier chooses if customer doesn’t re-shop.
Industry says education is key, and I agree. This post answers the #1 question I am asked.
