New approaches account for the economic benefits of renewables.
Lori A. Bird and Karlynn S. Cory are both senior energy analysts with the National Renewable Energy Laboratory (NREL). Blair G. Swezey is senior director of solar markets and public policy at Applied Materials, and formerly was a principle policy analyst at NREL.
The guiding principle of voluntary green power markets is that electricity consumers can choose to purchase electricity derived from renewable energy, as distinguished from the standard power system mix.1 The willingness of consumers to make these purchases, almost always at higher cost, rests on the value they receive in return, which usually comes in the form of environmental benefits. However, environmental improvement benefits the broader public, not just program participants; everyone benefits from a cleaner environment regardless of who pays for it. The overall success of the voluntary green power market rests on the willingness of large numbers of individual consumers to pay more for these electricity products, despite the fact that environmental benefits accrue to the public at large.