Retail energy providers vs. rooftop solar

Retail energy providers (REPs) and rooftop solar are both great options for residential and commercial properties. While both reduce your carbon footprint and take control of your energy usage, they differ in environmental impact and economics. Importantly, REPs and rooftop solar aren't mutually exclusive—you benefit from both.

REPs and rooftop solar can reduce the environmental impact of your energy use. Rooftop solar is a clean, renewable, and carbon-free power source that uses unused roof space to generate electricity. REPs often provide energy plans featuring a green energy mix, typically involving one or a combination of wind and solar power.

Like utility green power programs, one significant difference in the environmental impact between REPs and rooftop solar is land use. To offer green or renewable plan options, a REP must purchase renewable energy wholesale 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.

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 more significant. When you own a solar panel system, you'll save significantly on electric bills over your system's entire 25 to 35-year lifetime. 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 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 generate 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.

Luckily, you don't have to choose between REPs and rooftop solar. In some cases, it may be most beneficial to pair the two together and reap both benefits.

Most EnergySage solar shoppers install an 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.