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What Are Renewable Energy Certificates (RECs)?

Renewable energy certificates (RECs) represent the environmental attributes of renewable energy generation.

Each REC represents one megawatt-hour of electricity generated from a renewable energy source.

RECs are a tradable commodity, allowing organizations to support renewable energy development even if renewable generation does not directly power their facilities.

How Do RECs Work?

When renewable energy is generated, two distinct products are created: the actual electricity and the renewable attributes.

The renewable attributes are sold as RECs, which individuals and organizations can then purchase.

Purchasing RECs allows organizations to claim the environmental benefits of renewable energy. The RECs are registered and tracked to avoid double-counting, as the attributes are bought and sold separately from the physical electricity.

RECs provide revenue for renewable energy developers and incentivize further development of renewable generation. Purchasing RECs is an easy way for organizations to meet sustainability and renewable energy goals without changing their existing electricity supply.

RECs can come from various renewable sources like #solar, #wind, and #hydro. The specific attributes of the RECs depend on the type of renewable generation and location.

Organizations that want to claim they are powered by renewable energy can do so by purchasing an amount of RECs equal to their total electricity usage. Some utilities offer #greenpower programs where customers can opt to purchase RECs or renewable energy to meet a portion of their usage.

The Different Types of Green Power Supply Options

Green power can be obtained through several supply options, all of which involve the use of RECs. For organizations seeking to procure green power, the options include:

• Purchasing from local utilities: Some utilities offer green power products or programs that provide renewable energy to customers. These programs allow customers to purchase RECs to match a percentage of their electricity use.
• Buying from competitive suppliers: Customers can choose a competitive supplier that provides 100% renewable energy in deregulated electricity markets. The customer purchases renewable energy and the associated RECs.
• Contracting with renewable generators: Large customers can contract directly with renewable energy generators to procure renewable energy and RECs. They may choose to keep the RECs or sell them to others.
• Community choice aggregation (CCA): CCAs allow cities, counties, and other governmental entities to aggregate customer demand and purchase renewable energy on their behalf. Customers can then choose to opt up to 100% renewable energy.

In all cases, the key is ensuring the renewable energy generators produce electricity and that the associated environmental attributes are conveyed to the end-use customer in the form of RECs.

How Organizations Can Purchase Green Power

Organizations can purchase green power through their local utility company or a competitive energy supplier if available in their area. The most common ways for organizations to procure green power are:

Purchasing Renewable Energy Certificates (RECs)

RECs represent the environmental attributes of renewable electricity generation and the purchase of RECs helps drive the development of more renewable energy sources. Organizations can buy RECs from their utility, a REC broker, or directly from renewable energy generators. RECs are available from a variety of renewable sources like solar, wind, and geothermal. By purchasing RECs, organizations can claim the environmental benefits of renewable energy use and meet sustainability and emissions reduction goals.

Choosing a Green Power Product From the Utility

Some utilities offer green power products that provide renewable energy from sources like solar, wind, and biomass. Organizations can opt to have all or a portion of their electricity usage matched with renewable energy by choosing a utility’s green power product. The additional cost for the green power product is used by the utility to develop more renewable energy sources. Organizations that purchase a green power product can claim they are using renewable energy and lower their carbon footprint.

Installing an On-site Renewable Energy System

For organizations with adequate space and resources, installing an on-site renewable energy system like solar panels or wind turbines is an option to procure renewable energy. The organization can use the renewable electricity generated on-site and in some cases sell excess generation back to the grid. An on-site system provides energy cost savings, energy security, and environmental benefits. The organization has full ownership and control over the renewable energy system. However, the high upfront costs and long payback periods of installing on-site systems make this option infeasible for many organizations.

In summary, RECs provide an innovative market mechanism to foster the growth of green power. Although REC markets are still developing, they provide an opportunity for organizations of any size to participate in the green power movement. By understanding how RECs work and the options for purchasing them, organizations can make an informed choice about using their buying power to shape a greener future. Overall, RECs offer an accessible way for people and businesses to choose renewable energy and build a more sustainable energy system.