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Voluntary and Mandatory Markets
Green Power Market
Mandatory markets exist because of policy decisions, such as state Renewable Portfolio Standards (RPS). Such standards require electric service providers to have a minimum amount of renewable energy in their electricity supply. Often, these policy decisions specify eligible energy resources or technologies and describe how electricity service providers must comply.
Voluntary markets, also referred to as green power markets, are driven by consumer preference. Voluntary markets allow a consumer to choose to do more than policy decisions require and reduce the environmental impact of their electricity use. Voluntary green power products must offer a significant benefit and value to buyers to be successful. Benefits can include zero anthropogenic greenhouse gas emissions, pollution reductions, brand development opportunities, and energy price stability, to name a few.
Voluntary markets help develop nationwide renewable energy capacity that exceeds what mandatory markets contribute alone (see graphic). Ensuring that voluntary markets are separate from and in addition to mandatory markets helps reduce the environmental impact of electricity generation.
Partnership Perspective
EPA’s Green Power Partnership recognizes organizations that voluntarily buy green power products. Partners should ensure that their green power purchase does not result from a mandate. For more information, please review the Partnership Requirements (PDF) (12 pp, 143K, About PDF).
Added Reading
The following document provides greater detail on issues related to this Web page.
NREL/EPA Report: Renewable Electricity Supply and Demand (PDF) (13 pp, 505K, About PDF) The
National Renewable Energy Laboratory (NREL) released a preliminary examination
of the supply and demand balance for renewable electricity in the United
States, with a focus on renewable energy projects that meet the generally
accepted definition of “new” for voluntary market purposes,
i.e., projects installed on or after January 1, 1997. After estimating
current supply and demand, the report presents projections of the supply
and demand balance out to 2010 and describes a number of key market
uncertainties.