Renewable Energy Certificates (RECs)

RECs certify that one megawatt-hour (MWh) of renewable energy has been generated and added to the grid. They represent a tangible methodology used to foster support and engagement for renewable energy projects. This is achieved by allowing entities to purchase these certificates and then lay claim to having funded renewable energy production. It’s imperative to acknowledge that when one purchases a REC, they’re not purchasing the physical electricity but the benefits associated with the generation of that electricity.

One of the distinct qualities of RECs lies in their ability to break the ties between the physical electricity and the environmental attributes of renewable generation. RECs can be sold separately from the electricity they represent – the electricity goes to the local power grid while the REC can be sold on the open market. This process allows businesses to support renewable energy even if they are not located in regions with plentiful renewable resources.

RECs are robust tools in carbon accounting, as they play a crucial role in demonstrating use or support of renewable energy. These certificates provide a measurable way to determine the amount of renewable energy an entity is either using or supporting. Further, the acquisition and retirement of RECs can help organizations meet their sustainability goals, reduce their carbon footprint, and comply with regulations or policies requiring renewable energy usage. Therefore, RECs serve as an essential mechanism in both promoting the further generation of renewable energy and helping organizations fulfill their environmental commitments.