How much extra does green electricity actually cost?

Tier-by-tier premium breakdown

Voluntary REC tier: +0.3 to +0.6¢/kWh. RECs sourced from any certified-renewable generation, not third-party verified for additionality. The most common product on competitive supplier shortlists.

Green-e Energy certified tier: +0.6 to +1.2¢/kWh. RECs verified to come from generation built within the last 15 years, not double-counted, and meeting additional sustainability criteria. The relevant tier for most corporate sustainability reporting.

Direct PPA tier: +0.8 to +1.4¢/kWh on the supply portion, plus capacity-side complexity. The strongest renewable structure but operationally complex.

What the premium looks like in monthly dollars

On a residential 950 kWh/mo bill, voluntary REC adds ~$3–$6/mo, Green-e adds ~$6–$11/mo. On a commercial 32,000 kWh/mo bill, voluntary REC adds ~$96–$192/mo, Green-e adds ~$192–$385/mo.

For households the premium is small enough that the choice is mostly philosophical. For commercial accounts the dollar value matters more — but so does the corporate sustainability reporting outcome that justifies the premium.

Why there is a premium at all

The premium exists for two structural reasons: REC market price and additionality cost. RECs trade in their own market; the premium reflects the marginal cost of certified-renewable generation above the wholesale wholesale rate.

For Green-e certified, the additional premium covers the third-party verification cost and the additionality requirement (RECs must be sourced from new-build generation, not legacy generators).

In an environment where the wholesale rate is rising faster than the REC premium, the all-in cost of green electricity is becoming more competitive vs standard supply. The premium has compressed about 30% over the last five years.