Are Aussies Buying Into GreenPower?

GreenPower logoWould you be willing to pay extra on your electricity bills if it meant your provider sourced an equivalent amount of power from renewable generation sources? It doesn’t necessarily mean your home would use green energy, just that your retailer would increase the percentage it buys overall.

Not interested? What if these green fuzzy feeling were available from just $1 a week? Still not interested? You’re not alone.

GreenPower is a government-accredited program that enables your electricity provider to purchase renewable energy on behalf of your household or business. GreenPower is committed to ensuring that the renewable electricity you buy from your supplier meets “stringent environmental standards”, meaning that by supporting the initiative, you are helping to develop new infrastructure in the renewable energy sector.

But how committed are Australians to supporting this green energy drive? Not very, Canstar Blue research shows. We surveyed more than 5,000 electricity bill-payers across the country and found that just 16% claim to have signed up to a GreenPower option. This is despite plans being available for around $1 per week on top of your normal electricity bill.

“It’s worth making the point that some consumers may think they are paying for accredited GreenPower, but it might not necessarily be the case,” said Head of Canstar Blue, Megan Doyle. “The real figure may indeed be less than 16%.”

GreenPower says that all renewable energy purchased as part of its program must come from generators built since 1997, when the initiative was launched. “This is important because some significant renewable energy generation such as the Snowy Mountains Hydro Power station was built prior to 1997 and already provides Australia with about 5-6 percent of its renewable energy,” GreenPower says.

Types of energy generation which are not allowed in the scheme include:

  • Pre-existing renewable energy generation prior to 1997.
  • Hydro power where significant river diversions have taken place as part of the hydro station being built.
  • Biomass using native rainforests.
  • Coal seam gas.
  • All types of non-renewable generation including coal fired, natural gas, oil and nuclear.

You can tell if a retailer is offering an accredited plan is it uses the GreenPower ‘tick’ guarantee.

The cost of GreenPower

Energy retailers are offering customers the chance to buy GreenPower equivalent to a percentage of their household usage – from 10% to 100%. GreenPower estimates the added cost to be “around 5-8 cents per KWh more than your current electricity rate” if you elect to purchase 100%. A smaller contribution of 10-25% could cost as little as $1 a week, or “less than the cost of two cups of coffee over a month”.

Origin Energy clearly details its GreenPower pricing structure, with a recent price increase taking the estimated cost of buying 100% from $50 per quarterly bill to about $70, with the added cost per KWh jumping from 3.97 cents to 5.61 cents. Origin attributes the price increase to the rise in the market price of renewable energy. For a 50% GreenPower contribution, Origin says costs will increase from $25 to $35 per quarter, but for 25% prices remain set at $13 per quarter.

According to GreenPower’s Annual Compliance Audit in 2014, 465,700 residential customers had signed up to the program, with a further 31,700 business customers on board. Of the 26 electricity providers offering GreenPower plans, Origin accounted for the vast majority of those customers (319,100), followed by EnergyAustralia (41,800) and AGL (17,600). Some retailers had just a handful of GreenPower customers.

Is it worth it?

So what do people get out of the deal if their own household doesn’t even get to use the renewable energy it pays for? Well, a clean conscious that they are contributing towards Australia’s renewable energy targets by helping to invest in things like wind and solar generation, and increasing the percentage of green power in the electricity grid. Is that good enough? For the vast majority of customers, it seems not.

“Electricity is just about the biggest grudge purchase you can make, so paying extra when you don’t need to is probably not an attractive proposition to most people,” said Mrs Doyle.

The good news for GreenPower, however, is that younger energy customers do seem more willing to play – and pay – their part. While just 16% of electricity customers overall claim to have signed up to the program, that number jumps to 22% of those aged 18-29 and 19% for adults in their 30s.

By contrast, the figure drops to 13% of customers in their 40s, 14% for those aged 50-59 and 15% for those in their 60s. And men and women who pay the bills are equally as likely to go green, our survey found.

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