GreenPower vs carbon neutral vs green ratings – green energy options explained

What green energy options are available in Australia and which is best for you?

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Wind turbines on grassy hills

Green energy explained

Green energy is an umbrella term for energy that's created from renewable sources like wind farms and solar panels. There are lots of people that want to buy green energy in order to do their bit for the planet, but the options available can be confusing. Solar panels aren't a viable option for all, and the remaining green energy options from Australian retailers can leave you wondering whether you've actually made an impact.

In this guide, we'll be comparing GreenPower, carbon neutral energy and green energy ratings to help you work out which green option is best for you.

GreenPower vs carbon neutral vs green ratings: What are the key differences?

GreenPowerCarbon neutralGreen rating
What is it?A government scheme that funds renewables through your energy plan.Retailer-led programs that buy carbon credits to offset your energy usage.A comprehensive rating system that gives retailers an overall score for sustainability.
How good is it for the planet? It's the gold standard in Australia and the only way to guarantee that you're buying 100% green energy.Reduces carbon emissions but not necessarily through renewable energy. It's still better than nothing.Retailers rated above 4 stars take broad and serious action towards preventing climate change.
How much does it cost? Between 4c and 9c extra per kWh for 100% GreenPower.Select retailers offer this at no extra cost. AGL has an option for $1 a week.No additional cost for choosing a highly rated retailer.
Which retailers offer this? Almost all retailers in Australia – ask yours today for a quote.Energy Locals, Powershop, DC Power Co, Energy Australia (opt-in), AGL (additional cost).Powershop (5 stars), Diamond Energy (5 stars), Energy Locals (4 stars), Enova (4 stars).

GreenPower

What is GreenPower?

GreenPower is a government-led green energy scheme. If you opt for 100% GreenPower with your energy plan, then your retailer will buy certificates from government-approved renewable energy sources such as wind or solar farms to match your energy usage. This does not change the actual electricity that keeps the lights on in your home, but effectively, you'll be buying completely green energy. You don't have to go all-in, as retailers offer a variety of GreenPower plans to choose from, from 10%, 20% or 50% plans, right up to 100% plans.

How good is it for the environment?

GreenPower is the only government-accredited green energy scheme and it offers a very sustainable option for those who can afford to pay a little more for their energy. Buying GreenPower will mean you're doing your bit to increase renewable energy generation in Australia. Since 2009, GreenPower business and household customers have saved more than 9.7 million tonnes of greenhouse gases from going into our atmosphere. That's the equivalent of taking more than 2.9 million cars off the road for a full year.

How much does it cost?

GreenPower is billed on top of your normal energy bill and the price differs depending on where you live and who your retailer is. As of October 2019, 100% GreenPower will cost you between 4c and 9c more per kWh. The average home in Australia uses about 4,200 kWh a year, so that equates to around $252 more per year for the median GreenPower option.

Who offers GreenPower?

Most retailers in Australia offer some kind of GreenPower option.


Carbon neutral

What is carbon neutral energy?

Carbon neutral energy means that the environmental impact of the energy you use will be offset by your energy retailer with carbon credits. Carbon credits are generated and sold by projects that reduce carbon emissions. These projects can include a mix of things from tree planting schemes to renewable energy generation, so a carbon neutral energy plan will reduce global emissions but does not always lead to more renewable energy generation. We've got more information on what carbon neutral means here.

How good is it for the environment?

Carbon offsets are a bit of a last resort when it comes to reducing your environmental impact. It's better to try and reduce your energy usage or find a way to source renewable energy. However, carbon neutral energy is better for the planet than energy that is not carbon neutral and it comes at a price that should make it affordable for all.

How much does it cost?

The good news is that a number of providers (like Powershop and Energy Locals) offer carbon neutral energy to all customers for free. Energy Australia will also give you carbon neutral power for free, but you have to request this directly. AGL also offers a carbon neutral option through its Future Forests program, but you will have to pay $1 a week for it.

Who offers carbon neutral energy?

Powershop, Energy Locals, Energy Australia, AGL, DC Power Co.


Green energy ratings

What are green energy ratings?

The green energy ratings shown on our energy tables offer a different way to think about green energy. Produced by Greenpeace and the Total Environment Centre, these green energy ratings are taken from the Green Electricity Guide and are designed to give an overall score for how green an energy provider is.

The calculation used factors in the elements mentioned above such as GreenPower pricing and carbon offsets, but it also includes lots of other factors including emissions intensity and support for fossil fuels. Altogether, this gives the most comprehensive representation of how sustainable each energy retailer is. You can find out more about the Green Electricity Guide and how each retailer scored here.

How good is it for the environment?

Retailers with a high green energy rating will have a significantly lower impact on the environment than those with a low rating. By buying your energy from a retailer that takes its impact on the planet seriously, you're sending a signal to all the other retailers that they need to follow suit.

How much does it cost?

There is no additional cost for choosing a retailer that scores well in the Green Electricity Guide. In fact, many of the top-rated providers are able to offer very competitively priced plans.

Who has the best green energy rating?

Powershop is the highest-rated energy provider. It's soon followed by Diamond Energy, Energy Locals and Enova. AGL is the best rated out of the big three.


So, which type of green energy should you choose?

If you've read this far, then chances are that protecting the environment is important to you. This means that working out which option is best for you will depend mostly on your budget.

If you're an eco-warrior with some spare change to throw at the issue, then it's worth noting that the three options are not mutually exclusive. You can choose a 100% GreenPower plan that is also carbon neutral and sold to you by a retailer with a high green energy rating. If you go this route, you will quickly find yourself looking at plans from retailers like Powershop and Energy Locals.

If you're more conscious of cost, then carbon neutral energy or a lower percentage of GreenPower could be the best option for you. This will reduce your environmental impact without breaking the bank. If you're already with Energy Australia, then carbon neutral energy at no extra cost could be just a phone call away.

And finally, if you haven't changed your energy provider recently, then it's quite likely that you could find a green energy plan that is actually cheaper than your current deal. So here's your timely Finder reminder to head over to our energy pages to check your options and ensure you're getting the best plan for you.

Looking to go eco-friendly? Check out Finder Green

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