The University of Phoenix, in partnership with local Phoenix, Arizona energy provider Salt River Project (SRP), announced yesterday that they will make the largest purchase of renewable energy tax certificates in Arizona history.

The University will buy 46.5 million kilowatt-hours of renewable energy credits, equivalent to all of its Phoenix campus’ annual consumption and 27% of its more than 200 campuses across the county. It is also enough power to keep the lights, computers, and TVs going in 3,800 American homes for a year or removing the carbon emissions of 5,280 cars.

University of Phoenix is purchasing the credits from the Hopkins Ridge Wind Facility in Washington state through SRP’s EarthWise program.

As a result of the purchase, the University of Phoenix is ranked 7th on the Environmental Protection Agency’s “Top 20 College & University Partner List“.

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A Norwegian company called Renewable Energy Corporation (REC) will build the complex, which will be completed in different stages to incorporate wafer, cell, and module production. REC already operates the world’s current largest solar plant in Norway, which produces about 650 megawatts of energy annually.

A solar manufacturing plant would be the first of its kind in Southeast Asia, and REC looked at 200 locations before settling on Singapore. A combination of tax incentives, grants, and a skilled workforce were some of the reasons REC liked it. Likewise, Singapore officials are thrilled about playing center stage in the world’s rush to clean technology. Ko Kheng Hwa of the Economic Development Board explained:

The project will be a ‘queen bee’ to attract a hive of solar activities to Singapore — big companies and young start-ups engaged in research and development, manufacturing and innovation, as well as the supplier ecosystem… This investment will be a tremendous boost to our national drive to develop the solar industry.

Once completed in 2010, the capacity of all the products the plant produces will generate up to 1.5 gigawatts (GW) of energy each year — that’s compared to the total global industry output of 2 GW in 2006. That large of an impact, combined with the 3,000 expected jobs, shines a new light on an emerging area of the world hungry for innovative and clean technology.

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While buying renewable energy credits helps to support the development of alternative energy solutions, many times these programs are not specifically local. The credits you are buying may be for energy produced in a different region entirely. If part of your goal in purchasing RECs is to support and encourage the development of local renewable energy, then a generic REC may not be what you want.

The state of Michigan has recently started a new program called MI-REX (Michigan Renewable Energy Exchange), which is intended to bring together people interested in purchasing renewable energy credits with the owners of small renewable energy systems who have credits to offer. At this point the program is just in a pilot phase, and no RECs have been sold yet. The state website has an application form to gather more information about the systems people would like to register and offer credits.

This program would allow small energy producers (possibly even including individual homeowners) with wind or solar renewable energy systems from 1kW to 100kW in size to sell renewable energy credits from the power that they have produced. (A solar array of 4-5 panels or a wind turbine with a 10-12 foot diameter might be all that is needed to reach the 1 kilowatt threshold.)

This particular program is only available for producers in the state of Michigan, but other states may be developing or already offering similar programs. MI-REX RECs will be denominated in Megawatt hours or in tenths of a megawatt hour. Certificates will be issued annuallyfor the entire previous year’s production. Buyers will have to purchase the entire certificate (no partial certificates will be allowed) after which the MI-REX will be retired.

Selling RECs isn’t going to be a cash cow, but it could be a little bit more assistance in paying for a renewable energy system. A wind turbine that is generating an average of 500 kWh/month (a reasonable figure for a well situated household wind turbine ) could earn $120 from selling the RECs if they were sold for 2 cents per kWh (or $20 per MWh).

MI-REX credits are expected to first be available in early 2008 for RECs generated during 2007.

Today the U.S. House is likely to vote on the Udall-Platts Amendment to the energy bill. This legislation would require 15 percent of our nation’s electricity to come from renewable sources by the year 2020. It’s high time the federal government catch up to so many states that already have implemented 21st century policies like this one.

But in addition to broad state and federal programs, consumers can also do some renewable energy good for themselves, even if they don’t own a wind turbine or live in a sunny area. They can buy green power.

“Green power” is a term for clean, renewable energy. More than 600 utilities in 36 states give their customers the option to buy their power from renewable energy sources (depending on the state, they normally include solar power, wind, biomass, hydropower, or geothermal) rather than traditional ones (likely to be coal). Although the transmission system can’t guarantee that particular energy from a wind farm makes it to your refrigerator, the total amount of green electricity that travels over the entire system is increased because (ideally) the utility is taking all of the extra revenue and investing in more renewable energy sources.

My fellow blogger Philip Proefrock just covered a green power program he is considering in his homestate of Michigan. Green power programs do vary, whether it’s the location from which the renewable energy is coming (in state or out of state) or the source (I know of one municipal provider that promotes destructive Canadian hydropower as an eco-friendly option, so make sure you know where the energy is coming from).

Here in Minnesota, I purchase wind power through Xcel Energy’s Windsource program. The initial cost is a little more than $3.50 per 100 kWh block, but I also get a credit on my bill for the avoided fuel costs of conventional (i.e. coal) power. The credit varies each month, but my cost last month was less than $11. Windsource was also audited by the Green-e program to ensure that ratepayers’ money is going to build new renewable energy sources, and it passed with flying colors: Windsource funds the costs associated with Xcel purchasing wind power from private owners of wind turbines and new wind generation facilities across the state, so I feel good about my investment.

Find out whether you can buy green power in your state at the U.S. Department of Energy. If you can’t buy green power locally, consider investing in renewable energy credits (RECs) to offset your emissions.

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When a customer buys a carbon offset, Carbonfund.org purchases and then retires the carbon, taking it out of circulation.

Eric Carlson is the Executive Director of Carbonfund.org, and co-founded the company with his wife, Lesley. Eric has more than 15 years of experience in energy efficiency and global warming policy and project work. He was worked for the U.S. Environmental Protection Agency’s Energy Star program and has advised companies like Gillette, AT&T, and IBM on energy and money saving opportunities. Carbonfund.org’s motto is: “Reduce what you can, offset what you can not.”

I spoke with Eric by phone on March 23rd.

Green Options: There are a lot of companies and organizations out there selling carbon offsets, or Renewable Energy Credits (RECs). What makes Carbonfund.org different?

Eric Carlson: Our distinction is that we’re a nonprofit and that we let our customers decide for which projects their money is used. We also retire the carbon credits that we buy for our customers. Some companies buy them and then trade them, which doesn’t reduce the overall amount of carbon dioxide.

GO: What sorts of choices do your customers have?

EC: We offer three types of projects from which customers can buy RECs: renewable energy, energy efficiency, and reforestation.

GO: By the way, how do you “retire” carbon?

EC: We often just ask that our account with a particular project be closed, so that credits we’ve bought can never be used again.

GO: There’s a lot of discussion around the term “additionality” and carbon offset projects. Can you explain what that is?

EC: If a project would not have happened without someone buying the RECs to support it, then it is considered additional and a meaningful carbon reduction.

GO: How important is additionality to Carbonfund.org?

EC: We absolutely make sure that projects are additional. At the same time, I’m afraid that the controversies around additionality are slowing people down from just doing the right thing and reducing their carbon impact.

When you buy a REC, you are buying the environmental attributes of that electricity. There are so many variables that go into renewable energy projects, like leasing costs, interest rates, etc. RECs are a part of that, and by purchasing credits, you’re telling the market to buy and set up more renewable energy, and that’s additional.

Carbonfund.org cares a lot about additionality, we work on it every day, but we can’t let it get in the way of the prize.

GO: Some carbon offset companies don’t consider reforestation additional, or even a valid carbon offset.

EC: A tree is 100 percent additional. We buy that tree, so it would not have been planted without someone buying it. The Kyoto Procotol allows for reforestation as well, as does the Chicago Climate Exchange and tens of thousands of scientists around the world have endorsed reforestation as a meaningful way to cut CO2 pollution.

GO: Can you explain that a bit more?

EC: Think of renewable energy, energy efficiency, and reforestation all working together, playing distinct roles. Energy efficiency first brings down the demand for energy, then renewable energy ensures that the energy we need is clean and nonpolluting. Finally, reforestation sucks the carbon dioxide that’s already in the air back down and into its roots. It all has to work together.

GO: That’s the best argument for reforestation that I’ve heard yet.

EC: I just perfected that argument, actually.

GO: With so many renewable energy projects going up, how do you make sure yours are additional?

EC: Renewable energy is only 2 percent of our total energy – or, 98 percent of all new electricity generated since 1997 has been nonrenewable. So we can assume that 98 percent of the RECs out there are additional also, because if renewables could have happened without the RECs, we would have more than 2 percent renewables. So most renewable energy can be considered additional.

GO: How many customers does Carbonfund.org have?

EC: Over 22,000 people, plus over 160 companies and nonprofits.

GO: Have you ever been approached by a traditionally unlikely company wanting to buy carbon credits?

EC: Absolutely. We’ve worked with a large trucking company and even a private jet company, for example. These are not your typical “green” companies. They emit a lot of carbon dioxide and so this is a big financial commitment for them. These particular companies also don’t have big advertising budgets to talk about how green they are, so they weren’t just doing it for good PR.

GO: What are the questions people should be ask when looking to offset their carbon emissions?

EC: First, they should make sure that the projects are certified, verified or audited by a third party. At Carbonfund.org, we support Green-e and Environmental Resources Trust (ERT) certified renewable energy projects, our energy efficiency offsets are certified by the Chicago Climate Exchange and ERT. Our reforestation projects and methodologies are audited by ERT (in lieu of a certification standard) and our entire portfolio is audited by ERT to ensure we are offsetting what our supporters are asking us to. Our 2004 audit is up and our combined 2005/06 will be up in the next week.

After making sure the projects are certified, verified or audited, determine the cost per ton of CO2. The Chicago Climate Exchange’s website shows what companies, nonprofits, cities, and the State of New Mexico pay.

After pricing, decide on the project type from which you want to buy the offset, like renewable energy, efficiency, or reforestation.

GO: Speaking of pricing, there’s a lot of talk about why the price of carbon varies so much. Why do different companies charge so differently?

EC: Carbon doesn’t cost a lot and it doesn’t need to be painful. The cost varies according to the type of project. If you want to support solar energy in Seattle, then it’s going to cost you more than a wind farm in Kansas.

At Carbonfund.org, you know exactly what our markup is. Right now, carbon is being sold for $3.50 on the Chicago Climate Exchange. We sell the carbon credits for $5.50, while other companies charge up to $10 or $12 a ton. You’re getting the exact same product but are paying more for it.

GO: So why are some folks paying more for the same carbon credits?

EC: There’s a lack of education out there, and the media is often not clear about how this all works. But I think people are beginning to pay attention and understand it better.

In the end, the real cost of cutting CO2 is less than zero because it’s saving money. For example, you buy an efficient, compact fluorescent light bulb for $5 but you save $40 over its lifetime. So the bulb costs nothing. It is profitable to cut CO2 and we’re going to see more and more individuals and companies taking advantage of that.

But occasionally, one of our friends in Washington gives us genuine cause for celebration. Last week, that politician was Rep. Peter Welch (D-VT). At a news conference, Welch announced that he is pledging to make both of his offices (one in D.C. and one in Vermont) carbon neutral:

Congressman Peter Welch can't put solar panels on Capitol Hill, or used french fry grease to power the commercial plane that jets him back to Vermont each week. And he can't make his staff read by candlelight.

But the Vermont Democrat says he can make his offices "carbon neutral" — by promoting renewable energy projects in Vermont that negate his staff's impact on the environment.

To accomplish this, Welch will offset the estimated 56 tons of carbon dioxide produced by his offices and his travel by investing in an anaerobic methane digester on a dairy farm and a wood pellet-fired boiler that will replace a fossil fuel-fired boiler at a Vermont college. The total cost of his investments to offset that 56 tons of carbon dioxide? $672. And there's more good news, taxpayers: Welch is making the investment with his own money, and is proposing legislation that encourages his fellow lawmakers to do the same.

As Maria noted last week on Green Options, "carbon credits", also called "carbon offsets," have received quite a bit of attention lately, but they're also often misunderstood. (We hope you'll find our Renewable Energy Credits entry in the Green Living Guide and Maria's "Carbon Credits" series, with the second installment coming tomorrow, useful in this regard). In short, carbon credits are investments in clean, renewable energy that "offset" the consumption of "dirty", carbon dioxide emitting energy. Rep. Welch's offices will not directly use the renewable energy his investment helped produce. But! Somebody else will be using that clean energy instead of coal, oil, or natural gas, thereby "offsetting" or "neutralizing" the carbon emissions his offices caused.

Not only do Rep. Welch's actions raise awareness of little-known and underappreciated options like carbon credits and ideas like carbon neutrality, but they also (here's a thought) set a great example for us average citizen types. Our elected representatives have large roles to play in developing global solutions to climate change, but we, as ordinary folks, play equally important roles with our individual actions. Rep. Welch recognizes this, and he put his money where his mouth is. That's leadership.

For all I know, Rep. Welch's car gets 8 miles per gallon, his thermostat in the winter is set to 78 and in the summer to 63, and he flies in salmon from Alaska nightly for dinner. Even so, today we can proudly and sincerely say: kudos Congressman Welch.