Energy Tips, Solar & Renewables
What Is a Green Energy Plan?
Learn what makes an energy plan ‘green’ and how it can benefit both you and the planet
- What Answers You’ll Get On This Page
Important Points
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Green energy plans like GreenPower and carbon neutral options offer different ways to reduce your environmental impact, knowing the difference matters.
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Choosing the right plan or provider depends on your budget, values, and how much renewable energy you want to support.
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Even small changes, like switching plans or providers, can drive demand for clean energy and help accelerate Australia’s transition to a greener grid.
With more Australians rethinking how they supply energy to their homes, green energy plans are becoming an increasingly popular, and practical choice. Whether you’re trying to lower your environmental impact or simply align your energy use with your values, understanding how these plans work can help provide more clarity if you’re looking to go greener. Let’s break it down.
What is a Green Energy Plan?
With energy prices as volatile as ever and climate concerns top of mind, more Aussies are looking for simple ways to reduce their impact, and their bills. One option gaining traction is a green energy plan. But what exactly does that mean?
A green energy plan doesn’t change the electricity coming into your home. Instead, it makes sure that some or all of your usage is matched by electricity generated from renewable sources like wind, solar, or hydro. Retailers do this by purchasing renewable energy certificates, often through the government-backed GreenPower program, proving your electricity is being offset with clean, accredited generation.
Expert Tip
Think of the grid like a giant pool of water, filled from different taps (coal, solar, wind). You can’t control which tap your cup is filled from, but by choosing GreenPower, you’re paying to pour more clean water (renewables) into the pool.
For renters or homeowners without solar, green plans offer a simple yet powerful way to support the renewable transition. With the federal government targeting net zero emissions and record amounts of clean energy coming online, now is a particularly smart time to choose a plan that matches your values, and helps clean up the grid.
The Current State of Renewable Energy Use
Renewable energy in Australia is growing at a rapid pace, and it’s hard not to believe it’ll continue along this trajectory. According to the latest report from Australia’s Energy Account, which covers the 2022-23 financial period, renewable energy production increased by 12%, reaching 325 petajoules (PJ). That’s enough to supply around 33% of the country’s electricity needs, a solid step forward in Australia’s shift away from fossil fuels.
If you’re wondering which sources are doing the heavy lifting, solar is leading the way. It jumped by 21%, thanks to the continued popularity of rooftop systems and the expansion of large-scale solar farms. Wind power also grew, up 9%, with new wind projects going live in several states. The only dip came from hydro, which dropped by 2%, mostly due to less rainfall and lower water levels affecting generation capacity.
So what does this mean for you? It means the grid is getting cleaner, and if you’re already using solar or GreenPower, you’re helping push that transition even further. Solar, wind, and hydro are still the major players, but solar, in particular, is racing ahead as the fastest-growing source in Australia’s renewable portfolio.
Source: Australian Bureau of Statistics, Energy Account, Australia, 2025.
2GreenPower vs Carbon Neutral Energy: What’s the Difference?
If you’re shopping around for a new plan, chances are you’ll come across two terms: GreenPower and carbon-neutral electricity.
While they both reduce your environmental impact, they achieve this in very different ways.
GreenPower: A Trusted Way to Act on Climate Change
GreenPower is like asking for a receipt that proves clean energy was made, just for you. Your provider buys Large-scale Generation Certificates (LGC) and surrenders them to the Clean Energy Regulator in your name. Electricity providers purchase LGCs based on the amount their customers choose to add to their plan.
The best part? More and more Aussies are getting on board. From households to businesses, people are adding GreenPower to their energy plans to support renewable energy. And it’s not just a trend, there’s tangible proof supporting this statement. The graph below shows the gradual increase over time.
Source: GreenPower, “Q1 2025 GreenPower Quarterly Report,” July 2025,
Yes, it costs a bit more, but the impact is clear and measurable.
GreenPower typically adds around 4 to 8 cents per kilowatt-hour (kWh) to your regular electricity rate, depending on your retailer and the percentage of GreenPower you choose¹.
For example, if you’re on a 100% GreenPower plan and your household uses about 12-15 kWh of electricity per day, you could be paying an extra $0.50 to $1.20 per day to fully match your energy use with accredited renewable sources.
If that sounds like too much, many retailers offer partial GreenPower options, like 10%, 25%, or 50%, which can reduce the added cost to just a few dollars a month.
Carbon Neutral Electricity: Offset-Based
When you sign up for a carbon neutral electricity plan, the electricity that’s supplied to your home is still the same as everyone else’s. It comes from the national electricity grid, which is a mix of both renewable sources (like wind and solar) and fossil fuels (like coal and gas). That means the actual electrons flowing into your home aren’t necessarily “green.”
So, what makes it carbon neutral?
This is where offsetting comes into play. Your energy provider calculates the emissions generated from your share of electricity usage (based on average grid emissions) and then purchases carbon offsets to balance them out. These offsets might come from projects that plant trees, capture methane, or support renewable energy development overseas or in Australia.
For example, let’s say you use 4,000 kWh of electricity on an annual basis. If that electricity comes from fossil fuels, your retailer will buy enough carbon credits, either from Australian schemes like ACCUs under the Clean Energy Regulator or internationally certified projects, to match those emissions. These credits are then retired so they can’t be used again, providing a measurable and irreversible offset against your emissions.
Carbon neutral plans reduce your net carbon impact, but they don’t change the source of your electricity. In contrast, a GreenPower plan ensures that a portion of your usage is matched by electricity from certified Australian renewable sources. That means with GreenPower, you’re directly supporting renewable generation, not just offsetting the emissions after the fact.
Carbon neutral plans are a low-cost, relatively accessible way to support climate action without installing solar panels, many cost only a few cents per kWh added to your bill. However, offset quality matters. Credible plans use accredited standards like Climate Active or Gold Standard to ensure genuine emissions reductions. Still, it’s worth noting that many critics believe that offsets aren’t a substitute for actual emissions cuts, highlighting risks around permanence and long‑term climate integrity.
3Choosing the Right Plan
If you’re looking to make a real contribution to the shift toward renewable energy, a GreenPower plan is the most transparent and impactful option. As mentioned above, it might cost a little more, but it provides accountability and makes sure your electricity usage supports Australian clean energy projects.
If you’re on a stricter budget, a carbon-neutral plan might still offer an improvement over doing nothing, but it’s worth reading the contract to understand where your money is going and what kind of offsets are being used.
4Choosing a Green Provider: A Perspective From Both Sides
Choosing a green energy provider can feel more or less empowering. You’re making a conscious decision to support a more sustainable future. But behind the marketing and eco-friendly claims, it’s important to understand both what you’re really getting as a consumer and what challenges retailers face in delivering on those expectations.
The Consumer Perspective
For many Aussies, switching to a green energy plan is driven by a desire to reduce environmental impact. Whether you’re motivated by climate concerns, long-term sustainability, or simply want to align your home with your values, green plans offer a sense of agency in a traditionally opaque industry.
However, some consumers are surprised to learn that these plans don’t necessarily mean your home is running on 100% renewable power at all times. Since all electricity flows through the same grid, it’s physically impossible to control where every bit of electricity comes from.
Instead, retailers match your usage with certificates or offsets to account for your consumption, which is more of a financial mechanism than a physical one. GreenPower is like asking for a receipt that proves clean energy was made just for you. Your provider buys certified credits from renewable generators and retires them in your name. It doesn’t change what comes through your power socket, but it does mean more clean energy gets made overall
The Retailer Perspective
For energy retailers, offering green plans is both a business decision and a commitment. There’s growing demand for sustainable options, and many retailers want to meet those expectations. But it’s not always simple.
There are some challenges that retailers face, like:
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Grid limitations: Retailers can’t guarantee your home gets “green” electricity because all energy is pooled in the national grid, which still includes coal and gas generation.
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Cost and sourcing: Acquiring and retiring renewable energy certificates (especially for GreenPower) can be expensive. Retailers must balance these costs while remaining competitive with standard plans.
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Scalability: Offering 100% renewable matching for all customers requires access to large volumes of certificates or offsets, which may be limited, especially as more customers demand green options.
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Consumer education: Many customers conflate carbon-neutral plans with renewable energy, so retailers must work to communicate the difference, without misleading or ‘greenwashing’ clearly.
Despite these limitations, many retailers are stepping up and investing in renewable projects and expanding their GreenPower offerings.
Finding the Middle Ground
Ultimately, green energy plans are a partnership between consumers who want to support the clean energy transition and retailers who are trying to make it scalable and viable. While the system isn’t perfect, every household that opts into one of the programs listed above sends a signal to the market: clean energy matters.
5Will Switching To Green Energy Actually Make a Difference?
Yes, more than you might think.
Choosing green energy isn’t just about lowering your own carbon footprint; it’s about sending a clear message to energy companies, governments, and the wider market that Australians want cleaner, smarter, and more sustainable energy solutions.
The more people who make the switch, the stronger that message becomes.
When more households opt for solar or sign up for accredited GreenPower plans, they create real demand for renewable energy. This demand encourages energy providers to invest in projects like solar farms, wind turbines, and large-scale battery storage. Rather than relying on coal and gas, which still dominate a major part of Australia’s grid, your choice means more clean energy is being produced and fed into the system. Over time, this helps phase out dirtier electricity sources, step by step.
Beyond just energy supply, switching to green also drives innovation. When more people adopt clean technologies, whether that’s installing solar panels, driving electric vehicles, or adding home batteries, it helps normalise these solutions. This wider adoption pushes down costs and makes these technologies accessible to more Aussies like you.
Think of it like recycling or voting: one household might seem like a small drop in the ocean, but when thousands or millions take action, the whole system begins to shift. And it’s not just hope either. According to the Australian Energy Market Operator, reaching up to 82% renewable energy by 2030 is achievable, but only if everyday people and businesses keep backing the transition with their choices and support. Whether through your energy plan, the appliances you use, or your voice in the community, your actions can make a difference.
Author
Benjamin TomBenjamin is a utility specialist passionate about creating informative content about the energy, internet, and solar markets. With extensive experience in the telecommunications industry, Benjamin drives our unique blog posts, articles, and reviews. He is focused on breaking down the technical jargon so our readers can better understand the telco market and industry. Whether he is comparing the latest internet deals or creating unique guides, Benjamin takes great pride in creating helpful, easy-to-read content.
Sources:
¹GreenPower, “How much does GreenPower cost?”, July 2025, https://www.greenpower.gov.au/get-greenpower/how-much-does-greenpower-cost
²GreenPower, “Q1 2025 GreenPower Quarterly Report,” July 2025, https://www.greenpower.gov.au/sites/default/files/2025-06/Q1%202025%20-%20GreenPower%20Quarterly%20Report%20FINAL.pdf
