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 (and who also cares about saving money), the concept behind Arcadia piqued my interest.
What’s not to like? But of course I had questions.
So, I signed up and put together this Arcadia Power review to answer my own (and readers’) common questions.
Let’s dive in.
Arcadia Power Review
What Is Arcadia?
Arcadia (formerly known as “Arcadia Power”) is a company that gives consumers throughout the country the option to support clean, renewable energy sources — such as those provided by solar panels and wind farms. Arcadia wants to link you up with renewable energy without impacting your bottom line (or while at least keeping any cost increases as minimal as possible).
To do that, the company offers consumers the opportunity to pay slightly more for renewable energy on a per-kilowatt-hour basis, while also lowering their net utility costs through the use of better software and automated comparison shopping.
Note: Arcadia often offers incentives for people in certain states to sign up and become a customer. Right now, residents of select states can get a free Google Home Mini just for joining the service. You can click here to see if your state is eligible.
Where Does Arcadia’s Electricity Come From?
Arcadia does not send renewable power to your home. Instead, it gives you the ability to increase the overall demand for clean energy 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 clean energy.
Simply put, there’s no way for them to do so. That’s 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 energy 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.
Once energy is pumped into the grid, it gets distributed to individual homes and business through power lines.
And right now, only about 17% of the total energy that goes into the grid comes from renewable sources. 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 because it’s more expensive to produce. And that makes it more expensive to consume.
Renewable Energy Credits (also known as Renewable Energy Certificates or RECs) are a way for people and businesses to subsidize the production of clean energy by choosing to pay extra.
Here’s how it works:
Every time an energy company produces one megawatt hour of clean energy — such as from wind or solar farms — they get one REC. That REC (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 more for one type of energy over another. And by doing so, you can claim to “use” clean energy.
Arcadia essentially acts as an energy broker, identifying and partnering with clean energy producers and purchasing RECs on behalf of their members.
So, as an Arcadia customer, you’ll still be using the same power source you were using before you signed up. But those RECs allow you to effectively cancel out your carbon footprint and increase the overall demand for clean energy sources.
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 project, 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 electricity cost.
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
Anybody can sign up for an Arcadia membership. But the specific plans you’re eligible for depends on your location.
These are the three different types of Arcadia membership:
- Free Plan: 50% of your energy usage is matched with RECs at no charge. This is only available to members whose utilities are provided by certain companies.
- Basic Plan: If you’re ineligible for the Free plan, you can still opt for the Basic plan, which allows you to define what percentage of your energy usage should be matched with RECs. You’ll then pay 1.5 cents more per kWh.
- Premium Plan: 100% of your energy usage is matched with RECs. You’ll pay an extra 1.5 cents per kWh.
When you join, you’ll link your Arcadia account with your electricity account/utility account. This gives Arcadia access to your usage statistics as well as your billing details.
As a member, you’ll pay Arcadia, not your utility provider. Arcadia will then pay your energy bill on your behalf.
Is Arcadia More Expensive?
It depends. This answer can be “yes” and “no.”
You won’t see a change on the Free plan. But with the Basic and Premium plans, you’ll pay 1.5 cents more per kilowatt hour. That means your energy will be slightly more expensive. But if it’s important for you to support the use of renewable resources, you might decide that’s fine.
How much more expensive are those two plans, compared to what you’re paying today?
The cost of electricity varies based on a number of factors, including where you live. But the average cost per kWh in the United States is around 13 cents. That means the paid Arcadia membership will cost you a little more than 10% extra per month.
Can Arcadia Save You Money?
Arcadia can potentially save you money. As a member, 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 energy 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 a deregulated energy market — 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% — potentially more than offsetting the increased cost of the 100%-renewable plan.
The dashboard also helps you save money by giving you advanced insights into how to optimize your energy usage.
How Does Arcadia Make Money?
Like many companies, Arcadia has a freemium type of business model. That kind of model is common in the software field, but not in the utility industry.
So while you’re free to join whichever plan you want, Arcadia’s ultimate goal is to get you onto the paid plan. While they’re a private company and don’t release the specific details of the financial statements, it’s presumed that their primary source of profit is the difference between what they pay for RECs and what they sell them to their customer for.
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, like the Nest thermostat.
Arcadia Pros and Cons
Like any other service, there are good things and not-so-good things about Arcadia.
- 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.
- Increases demand for renewable energy. Many people would like to support renewable energy, but don’t know how to do so. 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.
- It’s a cheap way to make a difference compared to buying your own solar power panels. You’ll reduce your carbon footprint for almost no cost.
- The free plan allows you to offset 50% of your energy usage with renewables. That gives you the chance to make a respectable difference without paying more per kWh.
- It gives you an easy-to-see dashboard. The tools 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. That can help offset the extra 1.5 cents per kWh, if you go with the premium plan.
- It’s free to cancel: You won’t be locked in to a long-term contract or have to pay a fee if you change your mind about the membership.
- Plans will change based on where you live. Not everyone will qualify for the plan they want.
- The premium plan may have you paying slightly more. Your base rate per kWh will go up a little. That’s only a con if you are thinking in terms of dollars and cents — not if you’re thinking about the overall good that you’re doing for the planet.
- The company’s goal is to up-sell you to the premium plan. You don’t have to sign up for that one, of course. But keep in mind that’s what they’re after.
- They only offer auto-pay options. If you’re cutting it close on having enough in your bank account to pay your gas and electricity bills, 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 4.5/5 rating on TrustPilot. They have over 250,000 members and do business in each of the 50 states.
So, the big question is, should you join?
That depends on you and your personal values and your individual situation.
If the free plan is available in your area, and you care about helping the environment, then there’s no reason not to join. It doesn’t cost anything and you can cancel at any time. Plus, the dashboard and associated features may help you cut your costs.
If you care deeply about cutting your carbon footprint and have the room in your budget to potentially pay a little more, then consider the Premium plan. 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 you 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
I’m a big fan of the concept behind Arcadia, and appreciate the opportunity to support wind power and solar projects over fossil fuels.
But at the end of the day, I decided not to sign up for a paid option, which was the only plan available to me.
If the Free plan was available, I would have signed up in a heartbeat. It’s a win-win for both my finances (thanks to the dashboard and other money-saving features) and for making an environmental impact by helping to drive down the costs of green energy.