A company that wants greener power without building anything usually has three doors: a utility green tariff, a community solar subscription, or unbundled renewable energy certificates. All three can support a renewable claim. They do it differently, cost differently, and hold you for different lengths of time.
This is a plain comparison of the three program types, written for teams with sites on more than one bill. It does not name any current utility program or price. Those change, and the terms in front of you are the ones to read.
What all three share
Each option ends in the same place: renewable energy certificates. EPA says RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource (EPA, Renewable Energy Certificates). Whoever retires the certificate gets the claim.
So the first question for any option is the same. Who ends up retiring the certificates, in whose name, and for which year? Our note on what a renewable energy certificate actually is covers that in detail.
The second question is what each option does to your utility bills. That is where the three differ most.
Utility green tariffs
A utility green tariff is a rate option or add-on offered by your own utility. You enroll an account, and the utility matches some or all of that account’s use with renewable resources. Charges or credits show up on the bill you already pay.
What to look for in the terms:
- Eligibility. Some tariffs are limited by account size, rate class or customer type.
- Enrollment unit. Usually the account or meter, so a 30-site portfolio may mean 30 enrollments.
- Term and exit. How long you commit, and what leaving early costs.
- Price structure. A fixed premium, a pass-through of resource costs, or a credit that can move.
- Certificates. Whether the utility retires them on your behalf and sends you a statement.
The appeal is simplicity: one counterparty you already pay, and no new invoices. The limit is geography. A green tariff only covers sites on that utility’s system.
Community solar subscriptions
A community solar subscription gives you a share of an offsite solar project, often called a solar garden in Colorado. The project’s output earns bill credits, which the utility applies to the subscribing account.
What to look for:
- Credit value. How the bill credit is calculated, and whether it changes when the tariff does.
- Subscription fee. What you pay the project, and whether it escalates each year.
- Sizing limits. Rules on how large a subscription can be against an account’s use.
- Territory. Whether the project and each subscribing account must sit with the same utility.
- Certificates. Whether they transfer to you or stay with the project owner.
That last item matters most for claims. A subscription can lower a bill without giving you a single certificate. In that case you are buying bill credits, not renewable attributes, and a renewable claim needs certificates from somewhere else.
Unbundled RECs
Unbundled certificates are bought on their own, separate from the power your sites use. Your bills do not change. A seller delivers certificates and, if you ask for it, a retirement report in your name.
What to look for:
- Vintage. Generation dates that fit the reporting year under your reporting standard.
- Location. The region of the generator, if your framework or your audience cares.
- Resource type. Wind, solar or another source, named on the certificate.
- Retirement. Serial numbers, quantity and your legal entity named as beneficiary.
Of the three, unbundled certificates are the only one that can cover sites in any state with a single purchase. They are also the easiest to buy without asking what they support. They support a claim about the attributes you retired, not a change in the power reaching the meter.
Side by side
| Question | Green tariff | Community solar | Unbundled RECs |
|---|---|---|---|
| What you buy | A renewable match through the utility | A share of a project’s output | Certificates only |
| Bill effect | Premium or credit on the bill | Bill credit, less a subscription fee | None |
| Certificates | Ask who retires them | Ask whether they transfer | Yours, once retired |
| Commitment | Set by the tariff | Set by the contract | Per purchase |
| Sites in other states | Not covered | Not covered | Covered |
Fuller descriptions of each, plus on-site solar and offsite PPAs, are in our green power buyer’s guide.
Why multi-site portfolios rarely pick one
A portfolio of 30 stores across three utilities and two states does not fit one program. One utility may offer a green tariff that suits a few large accounts. Another may limit community solar to accounts of a certain size. Sites outside Colorado may have no local option at all.
The practical answer is often a mix: the local program where it fits the account, and unbundled certificates for the rest. A mix only works if someone tracks which MWh are covered by which instrument, so nothing is counted twice and nothing is left out.
That tracking belongs in the same place as the bills. Each site’s annual MWh comes from its bills, and each instrument covers a known share of it.
Comparing on cost per claimed MWh
Comparing these options on headline price misleads, because they charge in different units. A green tariff premium shows up per kWh on a bill. A community solar fee is set by the contract, with a credit netted against it. A certificate is priced per MWh, with no bill effect at all.
Bring them to one unit: the net annual cost per MWh of supported claim.
A worked example, with illustrative numbers. A 30-site portfolio uses 9,000 MWh a year.
- Option A, a green tariff, covers 4,000 MWh at the large sites and adds $40,000 a year to their bills. That is $10 per claimed MWh.
- Option B, community solar, covers 2,000 MWh. Fees run $60,000 and credits return $56,000, a net cost of $4,000. But the certificates stay with the project, so the claimed MWh is zero.
- Option C, unbundled certificates, covers the remaining 5,000 MWh for $15,000. That is $3 per claimed MWh.
Option B can still be worth doing for the bill credits. It just belongs in the cost column, not the claims column. None of these figures is a current price; they show how the math lines up.
Contract risk belongs in the price
The cheapest option per MWh can carry the most risk. Ask how each cost moves when tariffs change, and what happens when a site closes or moves.
A five-year subscription tied to a store with three years left on its lease is a future problem. So is a green tariff enrollment that follows the account rather than the company. For each site, write down the lease end, the term of the green option, and what happens at exit.
Then rerun the comparison with the exits included. An option that looked cheap at $3 per MWh may look different once a closing store’s early exit cost is in the math.
Three exit questions to put to every option, in writing:
- If a site closes, does the commitment end, transfer to another site, or keep billing?
- If the tariff or credit value changes, can you leave without a fee?
- If you sell a building, does the enrollment or subscription go with it?
What we check
When we compare green power options, we read the current program terms from the utility’s tariff book and the contracts. We rerun each site’s bills with and without each option, and we trace the certificates for each one to a retirement record.
We take no commissions from utilities, suppliers or installers. The comparison has no favorite, and every number in it points back to a tariff page, a contract clause or a bill.
Where to start
A Green Options Study compares these program types, plus on-site solar and offsite PPAs, across your whole portfolio and up to three utilities. For the wider view of how we approach green power work, from pricing options to checking claims, see green utility optimization.
