Retail energy providers vs. rooftop solar
Last updated 6/7/2019
Both retail energy providers (REPs) and rooftop solar are great options for residential and commercial properties. While both options are a way to reduce your carbon footprint and take control of your energy usage, they differ on environmental impact and economics. Importantly, REPs and rooftop solar aren’t mutually exclusive - it is possible to benefit from both energy options.
Environmental impacts of REPs vs. rooftop solar
Both REPs and rooftop solar can reduce the environmental impact of your energy use. Rooftop solar is a clean, renewable, and carbon-free source of power that takes advantage of otherwise unused roof space to generate electricity. REPs often provide energy plans featuring a green energy mix, which typically involves one or a combination of wind and solar power.
Similar to utility green power programs, one major difference in the environmental impact between REPs and rooftop solar is land use. In order for a REP to offer green or renewable plan options, they need to purchase renewable energy wholesale, which usually comes from large-scale solar or wind farms built on hundreds of acres of land. Building these projects typically requires development on new land, whereas adding solar panels to a rooftop involves no land alteration.
Economics of REPs vs. rooftop solar
While it’s possible to save money on your electric bill when you purchase electricity from a REP, the long-term financial benefits of rooftop solar are far greater. When you own a solar panel system, you’ll save significantly on electric bills over the entire 25 to 35 year lifetime of your system. For REPs, the savings only occur for the duration of the contract, and may not even reach the level of savings from rooftop solar in any single month.
Most REPs offer products that are competitive with utility rates, and in some cases lower. However, once you break even on your solar energy investment (the average payback period is about seven and a half years), you’ll be generating 100 percent free electricity on your property. This means that although the upfront cost of rooftop solar is much higher than enrolling with a REP, you’ll save more overall by purchasing a solar panel system.
REPs and rooftop solar: can they go hand in hand?
Luckily, you don’t have to choose between REPs and rooftop solar. In some cases, it may even be most beneficial to pair the two together and reap the benefits of both.
The majority of EnergySage solar shoppers install a solar array that provides less than 100 percent of the electricity they need. In that case, your electric utility will bill you for any extra energy you pull from the grid that isn’t covered by the net metering credits you accrue from your solar panel system. If you live in an area with a deregulated electricity market, you can purchase your remaining electricity needs from a retail energy provider instead. You’ll still reap all the benefits of a solar energy system while ensuring that your remaining electricity need is met by clean power.