Renewable energy is generated by sources that can be renewed as opposed to sources that can be used only once, such as fossil fuels.
Under Massachusetts state law, a variety of resources qualify as renewable. The primary sources are:
The supply of sunlight, wind, and flowing water is not diminished when we “mine” energy from them.
Buying electricity from renewable sources is important. It does not create air pollution or the greenhouse gases that are generated from burning fossil fuels, such as oil, natural gas, coal, or propane. Salem PowerChoice has prioritized buying renewable energy from the New England region as a way to help make our local grid greener and cleaner.
When the current contract went into effect, the Standard option included a 20% voluntary purchase of renewable energy from our region over and above the minimum required by state law. The cost of that additional renewable energy was embedded in the price of the Standard option. Until recently, the impact of purchasing this extra renewable energy from our region was an increase in demand for more renewable energy on our local grid. Renewable energy developers saw that demand and built new renewable energy projects to meet it.
However, recent shifts in federal policy, including the sunsetting of tax credits and a slowdown in new project permitting, have made it significantly harder to build new renewable energy infrastructure. Because of these barriers, the extra cost associated with buying an additional 20% from renewable sources is, for now, not having the desired impact. Specifically, it does not drive the development of new regional renewable energy projects.
In 2026, the City made the decision to remove the additional 20% renewable energy from the Standard option for calendar years 2025 and 2026. The funds collected for the extra renewables in 2025 and 2026 will instead be used to reduce the impact of anticipated price increases that are expected at the end of the year.
However, the City of Salem remains deeply committed to accelerating renewable energy development and will continue to explore new, more effective ways to support a cleaner, greener grid through this program as market conditions evolve.
Unless you have a renewable energy system, such as solar panels, plugged directly into your home or office, you cannot purchase the specific electricity that is generated by a renewable energy project. The electricity flowing through the grid is a comingled mix of electricity generated by renewable energy projects as well as electricity generated by burning fossil fuels.
As a result, a separate accounting system has been created to keep track of renewable energy and allow it to be bought and sold. That system uses renewable energy certificates, or RECs. Every time a renewable energy project generates 1 megawatt-hour of electricity, 1 REC is minted. That REC can then be sold. Purchasing a REC gives you, and no one else, the right to say you used the electricity from that renewable energy project.
Anyone who wishes to purchase renewable electricity must then purchase 2 things (these two costs are often bundled together, which is why renewable energy costs a bit more):
You can buy as many RECs as you wish
Buying RECs provides an important source of revenue for renewable energy developers. Voluntarily buying more RECs than are required by state law signals to developers that there’s a market for more renewable energy locally and provides a motivator to build more.
Participants in the Plus option buy more MA Class I RECs (see below) than are required by state law.
What are MA Class I RECs?
MA Class I renewable energy certificates (RECs) are from renewable energy projects located in the New England region that began commercial operation after 1997, generate electricity using any of the following technologies, and meet all other program eligibility criteria:
All of the additional electricity from renewable sources that is purchased through Salem PowerChoice is from MA Class I-eligible renewable energy projects.
