Customers Pony Up for Renewable Energy

Interesting article in the Washington Post about customers that are willing to pay extra for green electricity.

Utilities in 36 states offer some form of green pricing, and last year 430,000 households bought green power up 20 percent from a year earlier, the U.S. Energy Department reported.

More than 700 customers in Moorhead, for instance, pay higher bills to get power from two 180-foot wind turbines in the city. That's more than 5 percent of the utilities' 14,000 customers the highest percentage in the state.

Other Minnesota cities with top participation rates include Winthrop (3.8 percent), Detroit Lakes (3 percent), and North St. Paul (2.9 percent).

Looks like the percentage of participants where available is somewhere around 3% (as predicted by the 30:3 ratio).

Some might criticize the program as not having much impact if only 3% of the customers actually use it. I would argue that it is still valuable for three reasons:

1) It helps to fund research and development.

The ultimate goal is for clean renewable energy to be cheaper than coal and natural gas powered electricity. In order for this to happen the prices must come down.

As more solar cells and windmills are created, they get less and less expensive as companies figure out how to manufacture them cheaper. By purchasing expensive clean energy now, those purchasing green energy are paving the way for cheap clean energy in the future.

2) It educates the public.

By having the green option, it makes people aware of the issue. Most people are unaware of where there electricity comes from. By having the option in makes them think about the environmental issues that arise from the emissions of coal and natural gas powered electricity. It allows people to see just how much more it would cost to provide the power without those issues.

3) It shifts mainstream opinion.

My having a few die hard people that are willing to pay extra and give attention to the issue it shifts the entire mainstream opinion slightly in that direction.

The average person might not be willing to pay the extra cost for green power, but by seeing those that are, they will make smaller changes like getting more efficient light bulbs or turning down the thermostat.

It also makes it more likely that legislation to force electricity companies to provide a larger percentage of electricity is green will pass. The average person may not be willing to pay the additional cost for all energy to be green, but they will be willing to support a law that would requires 25% of it to be green and pay the additional cost if everyone else has to pay as well.

In the short run, 3% of customers buying green energy doesn't makes a big impact on the environment. But, by funding the R&D, educating the public and shifting mainstream opinion, it sets the table for significant large changes in the future.