Comparing Green Energy Plans: Beyond the '100% Renewable' Label

In an era of increasing environmental awareness and corporate sustainability commitments, "100% renewable energy" has become a powerful marketing phrase. Illinois businesses looking to reduce their carbon footprint are bombarded with offers claiming to provide clean, green electricity. But what do these claims actually mean? And more importantly, are you getting the environmental impact you're paying for?

The reality is that not all green energy plans are created equal. The difference between a meaningful investment in renewable energy and a marketing exercise can be substantial—both for the environment and for your business's credibility. This guide will help you cut through the greenwashing and evaluate green energy options with clarity and confidence.

The '100% Renewable' Myth: What Illinois Businesses Are Really Buying

When you sign up for a "100% renewable energy" plan, the electricity flowing through your outlets doesn't magically change. The physical reality of the electrical grid means that electrons generated by wind turbines, solar panels, natural gas plants, and coal facilities all mix together on the same wires. It's impossible to direct specific electrons to specific customers.

So what are you actually buying when you purchase green energy? In most cases, you're buying Renewable Energy Certificates (RECs)—tradeable commodities that represent the environmental attributes of renewable electricity generation.

Understanding the Grid and Electricity Supply

Think of the electrical grid as a large lake. Power plants of all types pour electricity into this lake, and consumers draw from it. When a wind farm generates 1 megawatt-hour (MWh) of electricity, that energy enters the lake along with power from every other source. The wind farm receives a REC certifying that 1 MWh of renewable energy was produced.

When an energy supplier offers you a "100% renewable" plan, they're promising to purchase enough RECs to match your consumption. If you use 100 MWh in a year, they'll buy 100 RECs from renewable sources. The RECs serve as accounting mechanisms to ensure that somewhere, renewable energy was generated to offset your usage.

The Problem with This Model

While this system creates demand for renewable energy, it has significant limitations:

• Geographic disconnection: Your RECs might come from a wind farm 2,000 miles away that was built years ago, with no direct impact on the energy mix in Illinois
• Vintage issues: Some RECs are purchased from projects that have been operating for decades and would continue running regardless of your purchase
• Additionality concerns: Buying cheap RECs from existing projects doesn't directly fund the development of new renewable capacity
• Price variability: The low cost of some RECs (sometimes under $1 per MWh) raises questions about their environmental value

According to the Environmental Protection Agency's Green Power Partnership, the environmental impact of renewable energy purchases depends significantly on the type and quality of RECs purchased.

RECs vs. Direct Sourcing: The Critical Difference in Your Energy Contract

Understanding the spectrum of green energy procurement options is essential for making informed decisions. Here's a breakdown of the major approaches:

Unbundled RECs: The Basic Option

The most common and least expensive approach involves purchasing "unbundled" RECs separate from your physical electricity supply. Under this model:

• You buy electricity from any supplier at the best available rate
• Separately, you (or your supplier) purchase RECs to cover your consumption
• The RECs may come from projects anywhere in the country, from any year within a certain window

Pros: Lowest cost, simplest to implement, meets basic renewable energy claims

Cons: Minimal environmental additionality, potential for greenwashing criticism, RECs may have little connection to actual grid decarbonization

Green Supply Contracts: Bundled RECs

A step up involves purchasing electricity from a supplier that bundles RECs with your energy supply, often from specified projects or regions:

• Your energy contract includes both supply and RECs
• RECs typically come from projects within your region or grid operator territory
• More transparency about where your renewable energy originates

Pros: Better alignment between your purchase and local grid impact, simpler than managing separate contracts

Cons: May cost more than unbundled RECs, still doesn't guarantee additionality

Power Purchase Agreements (PPAs): Direct Investment

For larger commercial and industrial customers, Power Purchase Agreements represent a more direct approach to renewable energy:

• Long-term contract (10-25 years) directly with a renewable project developer
• Your purchase commitment helps finance the construction of new renewable capacity
• Clear additionality—the project might not exist without your participation

Pros: Strongest environmental claims, potentially significant cost savings, price certainty over long term

Cons: Complex to negotiate, requires significant energy consumption, long-term commitment

Community Solar and Local Projects

Community solar programs offer a middle ground for businesses that want local renewable energy without installing their own systems:

• Subscribe to a share of a local solar installation
• Receive credits on your utility bill for energy generated
• Support development of renewable capacity in your community

Illinois has robust community solar programs under the Illinois Power Agency's Adjustable Block Program. For more details, see our guide on community solar vs rooftop solar.

Your 4-Point Checklist to Spot Greenwashing and Vet Your Energy Supplier

Not all green energy claims deserve equal credibility. Use this checklist to evaluate any renewable energy offering:

1. Ask About REC Specifics

Request detailed information about the RECs included in any green energy offer:

• Source location: Where are the renewable projects located? Local RECs (from the PJM grid region for Illinois) have more relevance to your actual electricity supply than RECs from distant grids.
• Vintage: When was the renewable energy generated? RECs should be from recent generation (within the past 1-2 years), not stockpiled from years ago.
• Project age: Is the energy from newer projects or facilities that have been operating for decades? Newer projects suggest your purchase is supporting recent renewable development.
• Generation type: What kind of renewable source—wind, solar, hydro, biomass? Some businesses prefer specific technologies.

2. Verify Third-Party Certifications

Look for independent verification of renewable energy claims:

Green-e Certification: Administered by the Center for Resource Solutions, Green-e is the leading independent certification for renewable energy. Green-e certified products meet strict standards for environmental integrity and consumer protection.

EPA Green Power Partnership: Companies that meet significant renewable energy usage thresholds can be recognized through the EPA's Green Power Partnership, lending credibility to their environmental claims.

If a supplier can't provide third-party certification for their renewable energy products, that's a significant red flag.

3. Evaluate Cost Premium and Value

Green energy typically costs more than conventional power, but the premium should be proportional to the environmental value:

• Very cheap green premiums (under $0.001/kWh) often indicate low-quality, low-impact RECs
• Moderate premiums ($0.005-$0.015/kWh) suggest higher-quality regional RECs
• Higher premiums may indicate local projects, specific renewable sources, or products with additionality guarantees

Get the premium in writing and understand exactly what it covers. Some suppliers bury REC costs in higher base rates rather than showing them transparently.

4. Assess Supplier Transparency

Reputable green energy suppliers are transparent about their products:

• They provide clear documentation of REC sources and certifications
• They explain the difference between various green product options
• They don't make misleading claims about electricity "flowing" from renewable sources to your business
• They can answer detailed questions about their procurement practices

If a supplier is vague about these details or pressures you to make quick decisions without thorough information, consider it a warning sign.

How to Secure an Authentic, Verifiable Green Energy Plan in Illinois

Ready to move forward with a meaningful renewable energy commitment? Here's a strategic approach:

Define Your Sustainability Goals

Before shopping for green energy, clarify what you're trying to achieve:

• Are you meeting internal corporate sustainability targets?
• Responding to customer or stakeholder expectations?
• Complying with industry-specific environmental requirements?
• Pursuing specific certifications that require renewable energy use?

Different goals may call for different approaches. A company seeking LEED certification may have different requirements than one making general sustainability claims.

Evaluate Your Consumption and Commitment Level

Your electricity consumption determines which options are practical:

• Smaller commercial users (under 500,000 kWh/year): Green supply contracts or community solar are typically the most accessible options
• Medium commercial users (500,000 - 10,000,000 kWh/year): May access higher-quality green products and some aggregated PPA opportunities
• Large commercial/industrial users (over 10,000,000 kWh/year): Can pursue direct PPAs and have significant leverage to demand specific REC attributes

Compare Multiple Green Options

Request quotes from several suppliers and directly compare:

• Base energy rate vs. green energy rate (isolate the premium)
• REC specifications (source, vintage, certification)
• Contract terms and flexibility
• Reporting and documentation provided

Document Your Renewable Energy Use

Once you've secured a green energy plan, ensure you have proper documentation:

• Obtain certificates or attestations showing your REC purchases
• Understand how to accurately describe your renewable energy use in marketing and reports
• Be prepared to answer questions from customers, auditors, or stakeholders

The Business Case for Authentic Green Energy

Beyond environmental responsibility, authentic renewable energy investments offer business benefits:

Enhanced Reputation and Customer Trust

As consumers and business customers become more sophisticated about sustainability claims, authentic renewable energy use becomes a competitive advantage. Greenwashing, when exposed, creates significant reputational risk.

Hedge Against Carbon Pricing

Future carbon pricing or emissions regulations could make renewable energy an economic necessity. Early adoption positions your business ahead of regulatory changes.

Employee Engagement

Sustainability initiatives, including authentic renewable energy use, contribute to employee satisfaction and recruitment—particularly among younger workers who prioritize environmental responsibility.

Supply Chain Requirements

Large companies increasingly require suppliers to meet sustainability standards, including renewable energy use. Credible green energy documentation can open doors to valuable business relationships.