Can Arcadia help you save money on your electric bill? Is the company legit? And can you get clean energy cheaper than the price you’re paying today?
As someone who cares about the environment, climate change and saving money, the concept behind Arcadia piqued my interest.
What’s not to like? But of course, I had questions.
So, I signed up to see what the company has to offer and put together this Arcadia review to answer my own (and readers’) common questions.
Let’s dive in.
Arcadia provides a simple way to help increase the demand for renewable energy. For a small monthly fee, you can effectively cancel out your carbon footprint. While the service does offer a few ways to potentially save money on your electric bill, most people will end up paying slightly more to support a good cause.
- Increases the overall demand for renewable energy at a low cost.
- Offers a handful of features that may help you save money.
- Available across the U.S.
- Does not send renewable energy directly to your home.
- You're most likely to save if you live in a deregulated energy market. Most other members will pay more.
What Is Arcadia?
Arcadia (formerly known as “Arcadia Power”) is a company that gives consumers throughout the country the ability to support clean, renewable energy sources — such as those provided by solar panels and wind farms.
Arcadia has a somewhat unique — and at first, hard to understand — business model.
It doesn’t help that many Arcadia reviews online are outdated. This is an important note, because in November of 2020, Arcadia updated their pricing structure and membership plans.
So, in an effort to help clear things up, let’s go over some key facts about Arcadia.
- First things first: Arcadia is not a power company or an energy supplier. They do not produce or sell electricity of any kind.
- As an Arcadia Power member, you are not getting green energy sent directly to your home. That’s impossible, as all sources of energy — whether from fossil fuels or clean power — get pushed to the same power grid, mixed together, and distributed evenly via power lines.
- The environmental benefit of becoming an Arcadia Power member is that you pay a small fee to have your energy consumption matched with clean energy through the use of Renewable Energy Credits (see our in-depth explanation below). This increases the amount of clean power your local utility company has access to, and theoretically also increases the long-term demand for renewable energy sources.
- Arcadia’s two membership options are a flat $5 per month fee (the “Regular” plan) and the “Basic” plan, which charges you a 1.5 kWh surcharge based on your average use. Despite being called the “Basic” plan, most people will pay more with this option.
- Arcadia used to have a free plan, but it was eliminated.
Where Does Arcadia’s Electricity Come From?
So, here’s where things get a bit complicated: Arcadia is not an electricity company and does not send renewable power to your home.
Instead, it gives you the ability to increase the overall demand for renewable power through the use of something called Renewable Energy Credits.
We’ll touch on those in a minute. But first, it’s important to understand why the company doesn’t physically supply you with electricity from a renewable energy source.
Simply put, there’s no way for them to do so because all sources of power — whether from coal, nuclear, wind, solar or natural gas — eventually end up mixed together in the same place: the national power grid.
This energy may be derived from different sources, but it all looks and functions the same. There’s no way to tell the difference between wind energy and coal energy, for example.
Once energy is pumped into the grid, it gets distributed to individual homes and businesses through power lines.
Arcadia’s goal is to increase that figure.
What Are Renewable Energy Credits?
The reason why only 17% of our energy comes from renewable sources is that it’s more expensive to produce (although this is changing fast, as renewable energy is becoming cheaper). And that makes it more expensive to consume.
Long-term clean energy will be much more cost effective, but that’s not until we have the infrastructure in place to generate it. And, what’s going to help create that infrastructure is consumers demanding clean energy.
Renewable Energy Credits (also known as Renewable Energy Certificates or RECs) are a way for people and businesses to subsidize renewable energy generation by choosing to pay extra for their electricity.
Here’s how it works:
Every time an energy provider produces one megawatt-hour of clean energy — such as from a wind farm or solar panel — they get one renewable energy certificate.
That renewable energy certificate (which has a unique serial number) can then be sold.
This allows the buyer to signify that their money directly supported clean energy as opposed to fossil fuels, and it allows the producer to sell their clean energy into the grid at more competitive rates.
In other words, RECs are a way to distinguish between the types of energy that get pumped into the grid; they allow you to choose to pay for one type of energy over another. And by doing so, you can claim to “use” clean energy.
Long-term, the goal is, as a consumer, to increase the demand for this type of energy by making it more cost-competitive with so-called dirty power.
Arcadia essentially acts as an energy broker, identifying and partnering with clean energy producers and utility companies by purchasing RECs on behalf of their members.
So, as an Arcadia customer, you’ll still be using the same electricity company and power source you were using before you signed up. But those RECs allow you to effectively cancel out your carbon footprint and support renewable energy projects.
Thus, Arcadia gives ordinary citizens a way to make a positive environmental impact without having to take more expensive and difficult steps like installing their own solar panels.
Community Solar Projects
In addition to helping you offset your carbon usage with RECs (most of which come from wind farms), Arcadia provides an easy way to buy into either local or nationwide community solar programs.
With a community solar program, you pay an upfront fee to “subscribe” to one or more panels in a remote solar farm. Then, you get a monthly bill credit (applied to the amount you pay Arcadia) that reduces your overall energy bill.
As with RECs, you’re not directly consuming more solar energy.
You can think of this as a way to subsidize the production of solar energy; by paying extra, in the form of a lump-sum payment, you’re helping incentivize the installation of more solar panels.
The specific cost and savings figures for these programs vary based on a number of factors.
For the nationwide program, the upfront cost of panels is about $100 each, with an estimated monthly savings of $1 per month per panel. That means it would take you just over eight years to break even.
However, it’s important to note that both the local and nationwide programs have “savings terms.” For example, you may only earn the savings for a 10 year period.
Arcadia Membership Options
Important: Arcadia updated its pricing and membership options as of November 2020.
Arcadia has two separate paid membership plans: a Regular membership and a Basic membership.
(Worth mentioning again is that they no longer offer a free membership plan.)
The names of these two plans are confusing, and frankly do not make much sense. In summary, the Regular plan is the cheaper of the two, while the Basic plan will cost most people more money.
The $5 per month Regular membership plan is what most customers will find themselves in.
With this plan, you’re paying a flat fee of $5 per month to Arcadia.
From there, 100% of your energy use is matched with clean energy. There is no surcharge assessed based on your electricity usage — it’s just a flat $5.
One key difference with the $5 per month plan is that you no longer pay your utility company directly.
Instead, Arcadia essentially takes over the management of your electric account. You’ll link your energy provider account to your Arcadia Power account, and then pay Arcadia the amount of your electricity bill plus the $5 membership fee.
The other membership option is called the Basic plan.
I asked Arcadia why I was assigned this plan, and their response was:
The Basic plan is offered to members who have specific utilities or unique billing situations such as rooftop solar with an annual true-up or multiple due dates with their utility that prevents them from enrolling in our Bill Pay program.
My assumption is that I was assigned this plan because my local utilities are run by the city. And while Arcadia has partnered with many big energy suppliers in the United States, they have not created partnership deals with smaller cities like mine.
As a Basic plan member, you’re charged an additional 1.5 cents per your average kWh usage. In exchange, 100% of your energy usage is matched with RECs.
For my account, Arcadia calculated that I use an average of 707 kWh per month. As each kWh is 1.5 cents, this comes out to an additional $10.61.
Note that this amount stays the same month after month. So, even if your energy use goes up or down, you’ll still pay the same rate. Arcadia never recalculates this, but if your electricity use decreases you can ask for manual readjustment.
With the Basic plan, Arcadia does not take control of your utility account. Therefore, you’ll still pay your power bill directly — only paying Arcadia the $10.61 fee to have your energy use matched.
Is Arcadia More Expensive?
It depends. This answer can be yes or no.
For starters, you are always paying more with Arcadia than without it: either a $5 per month fee or 1.5 cents per kWh.
For this fee, the amount of energy you use will “retire” RECs on your behalf.
One way to think about this is that you’re voting with your dollars. The extra money you pay to Arcadia directly supports renewable energy generation, so it’s essentially an investment in your values.
But can Arcadia save you money on your monthly utility bill?
In a lot of their promotional material, Arcadia mentions the opportunity to save money.
While at first glance, the answer to whether Arcadia saves you money is an obvious “no,” there are some ways Arcadia can indeed lower your electricity bill.
As a member of either plan, you get access to the Arcadia Power dashboard and services like Smart Rate (which used to be called Price Alerts).
The Smart Rate feature is valuable because it can help you automatically find a lower rate plan in your area.
That’s not always easy to do on your own, because local utility companies are often monopolies and don’t provide the best possible customer experience.
If you live in one of the few competitive energy markets in the United States — meaning you can choose from competing energy providers — the Smart Rate feature continuously scans for the lowest rate available. Once that rate is located, you’ll be notified via email and switched over to it.
The company claims this saves customers an average of 5% to 20% on their energy bill — potentially more than offsetting the $5 per month fee.
The dashboard also helps you save money by giving you advanced insights into how to optimize and reduce your electricity consumption.
In fact, you actually get a customized checklist that you can work through to help lower your costs.
While these tips can certainly be found elsewhere, Arcadia has built some gamification aspects into its platform by giving you the ability to check off these tasks (or add them to your to-do list).
How Does Arcadia Make Money?
Arcadia charges you a monthly fee: either $5 per month or a rate of 1.5 cents per kWh.
But that’s not the only way they earn.
They also make money by:
- Taking a small percentage of the savings when they find you a better deal with Smart Rate.
- Earning money by connecting you to community solar power projects.
- Sales of products they partner with, like the Nest thermostat.
Arcadia Pros and Cons
Like any other service, there are good things and not-so-good things about Arcadia.
- Increases demand for renewable energy. Many people would like get their energy from a renewable source, but don’t know how. This gives them an easy way to help protect the environment that doesn’t take up their time or cost a fortune. All that’s involved is a quick sign-up process.
- Can help you find a lower energy rate if you’re located within a state that offers Smart Rate. Many people still don’t understand that they can shop for a better energy rate, much the same way they would shop for insurance. This is a great feature for people who want to check out their money-saving options while supporting clean energy — though it only works in competitive energy markets.
- It’s a cheap way to make a difference compared to buying your own solar power panels. You’ll reduce your carbon footprint and help lower CO2 emissions for almost no cost.
- It gives you an easy-to-see dashboard. The tools available in your Arcadia Power utility account are light years ahead of those provided by most local utility companies. If you’re an online type of person who loves using cutting-edge tools, this will be a great perk for you.
- It can save you on credit card transaction fees. A lot of utility companies charge fees to customers who pay their bill with credit cards. That can be a nuisance for people who like the ease of paying with credit cards. If you have a cash-back credit card, or are trying to earn a credit card bonus, you can earn money back for paying your power bill with your card every month (assuming you’re on the Regular plan).
- It’s free to cancel: You won’t be locked into a long-term contract or have to pay a fee if you change your mind about the membership.
- There is an additional fee on top of what you pay for utilities.
- As a Regular member, they only offer auto-pay options. If you’re cutting it close on having enough in your bank account to pay your utility bill, you can delay your auto payment with a three-day grace period. The bad thing is that you have to take extra steps to do so.
Is Arcadia Legit?
If you’re worried about doing business with a fly-by-night company, you can relax. Arcadia is a legit company with a solid 4.9 rating on TrustPilot. They have over 250,000 members and do business in each of the 50 states plus the District of Colombia.
So, the big question is: should you join?
That depends on you, your personal values and your individual situation.
If you care deeply about cutting your carbon footprint and have the room in your budget to potentially pay a little more, then consider joining.
You may still end up saving thanks to the company’s other features and tools, but that’s not guaranteed.
Even if you don’t join Arcadia, still consider shopping for your electricity or gas provider. It’s an easy way to save money, and there’s no reason you should just blindly take the first deal your local power company offers without making a few quick phone calls to check out your options.
Here’s a list of states that have deregulated their electricity markets:
- District of Colombia
- New Hampshire
- New Jersey
- New York
- Rhode Island
Here are the states that have deregulated their gas markets:
- District of Colombia
- New Hampshire
- New Jersey
- New Mexico
- New York
- Rhode Island
- South Dakota
- West Virginia
Arcadia Review: Closing Thoughts
I’m a big fan of the concept behind Arcadia, and appreciate the opportunity to support wind power, solar farms and other green energy projects over fossil fuel plants that pump CO2 emissions into the atmosphere and contribute to climate change.
Before their pricing changed in November 2020, they had a free plan which resulted in 50% of my energy usage being offset by RECs. Since they no longer offer this plan, I recently switched to the Basic option, costing me an additional $10.61 a month.
As my utility provider is run by the city, there is no way for me to save with Arcadia (as there isn’t a way to switch providers or negotiate my energy prices).
And while the company does offer some tools to help you reduce your energy consumption, and thus lower your monthly utility bill, I had already taken advantage of most of those opportunities before becoming an Arcadia Power member.
But for me, this is a small way to spend a little bit of money in accordance with my values. It feels good knowing that I’m supporting the development of clean energy sources and reducing my carbon footprint.