Call now

How green energy plans work

Written by Jordan Smith /

Edited by Lisa Iscrupe

Last updated 05/17/2022

Westend61/Westend61/Getty images

Green energy electricity plans are an increasingly popular choice for consumers looking for the best energy plan. Increased support for green energy sources by energy customers, energy providers, and government regulators has led to an abundance of green energy plans. 

How green energy plans work

Green energy plans work by allowing your energy provider to use renewable energy credits (RECs) to ensure that your energy usage supports green energy generation. However, a green energy plan doesn’t mean the energy that powers your home comes directly from those green energy sources.

A REC is a certificate of proof that an energy source generated a certain amount of renewable energy. A REC confirms ownership of the green energy source, such as wind or solar power. A REC is issued when a power generator produces 1 megawatt-hour (MWh) of renewable energy for the power grid. For example, if a solar facility produces 10 MWh of solar power for the Texas electricity grid, it would be assigned 10 RECs. 

Energy providers who sell green energy plans must buy enough RECs to cover their customers’ demand for green energy. So, if a provider sold green energy plans to customers who required 10 MWh of energy to power their homes, the electricity company would have to buy 10 RECs to verify their plans are 100% green energy plans. 

The goal of the REC system is to increase electricity companies’ investments in solar and wind power as demand for green energy from energy consumers increases. In turn, this additional investment encourages solar and wind developers to build more renewable energy generation sites. The end result is that green energy makes up a larger share of overall power generation.

What is a green energy plan?

Green energy plans are electricity plans that use some amount of green energy. The amount of green energy they have will vary depending on your state’s level of green energy production. For instance, Texas is the leading state in the country when it comes to wind energy production and ranks highly in solar energy productions as well. Texas is now second in the country for total solar power output behind California.

The term green energy can mean different things depending on who you ask. However, a green energy source usually has to produce no or very low levels of carbon emissions. Some of the most common green energy sources are wind energy and solar energy. Carbon emissions set green energy sources apart from fossil fuels, which emit greenhouse gases when burned for fuel. Examples of fossil fuels include coal and petroleum. 

Additionally, green energy is not synonymous with renewable energy. For example, hydropower is renewable but is not considered an especially green energy source because of the infrastructure and deforestation associated with hydropower. 

Why choose a green energy plan?

The reasons for choosing green energy plans are plentiful, such as:

  • Reducing greenhouse gas emissions to combat climate change. 
  • Reaching states’ targets for low-carbon energy usage over the coming years. 
  • Green energy sources are often cheaper than building new fossil fuel plants. 
  • Many fossil fuel plants are aging and need replacing.

Besides signing up for a green energy plan, installing solar panels on your home is another way to use green energy.

What are the best green energy providers?

All Texas energy providers sell plans that contain a percentage of green energy. The amount of green energy included in a particular plan typically ranges from 6 to 100%, although the statewide average for renewable content is 25%. If you want to know how much green energy goes into your energy plan, read the Electricity Facts Label.

Several companies specialize in selling only 100% green energy plans, such as Green Mountain Energy, Chariot Energy, and Gexa Energy. Learn more about their electric plans on the SaveOnEnergy marketplace.

  • Green Mountain Energy is one of the best-known green energy plan providers. Green Mountain Energy power plans include 12-month, 18-month, and 24-month contracts. The company offers residential and businesses in Texas.
  • Chariot Energy is a Houston-based company providing green energy plans to residential and business customers. Although Chariot only has a three-year history, its ambition is to make green energy more accessible. Chariot also offers customers with solar panels the option to sell excess energy back to the grid.
  • Gexa Energy is a Texas-based electricity company that sells fixed-rate and variable-rate energy plans to residential customers. It offers a variety of plans in 12 and 24-month term lengths and offers bill credits for certain thresholds of energy use. 

These three energy providers offer various green energy plans. Some allow you to lock in your energy price for an extended period of time. Others offer you more flexibility. You can specify your requirements on the SaveOnEnergy marketplace to find your perfect plan.


Ready to shop for an energy plan? Let’s get you taken care of. Call:

Enter your ZIP code to get started

Are you moving to a new address?