Green pricing is an optional utility service that allows customers an opportunity to support a greater level of utility company investment in renewable energy technologies. Participating customers pay a premium on their electric bills to cover the incremental cost of the additional renewable energy.
The goal of green pricing therefore is to allow customers, through individual actions, to support a greater amount of renewable energy development by their utilities.
There are essentially three types of green pricing programs—contribution, capacity-based, and energy-based—which are defined below.
Contribution programs—allow customers to contribute to a utility managed fund for renewable energy project development.
Capacity-based programs—offers customers fixed blocks of electric capacity generated from renewable energy sources.
Energy-based programs—this type of program allows customers to choose a discrete amount of energy to be supplied from renewable sources, usually in 100-kWh "blocks" or as a fixed percentage of their monthly electric energy requirements.