What are Renewable Energy Certificates?

Renewable Energy Certificates, or RECs, are a way to record and track electricity that was generated without fossil fuel emissions or pollution. RECs are also known as:

• Green Tags
• Renewable Energy Credits
• SRECs (Solar RECs)
• Green RECs (Wind RECs).

Some states require RECs as part of a commitment to reducing fossil fuel emissions by a certain percentage, as per their Renewable Portfolio Standard (RPS). Other states have a voluntary system that was likely begun in response to consumer demand for green energy. To explain, let's say a wind farm produces electricity. For every MWh (megawatt hour) produced, the wind company receives one REC. The power goes into the grid, and the wind farm sells the power and the RECs to the utility company, which now sells the consumer ‘green energy.’ Each REC is given a serial number, which is tracked from producer to utility company. Usually, the utility company will ‘retire’ it, meaning it cannot be sold or traded again. But the utility company gets to keep the status of having green energy for its customers.

Renewable Energy at Home

If you are generating renewable energy at home with wind, solar, geothermal or biomass, you become the generator that gets the RECs and sells them to your utility. Your power source will be verified and certified through a third-party program, such as Green-e, to qualify for RECs. You may also be eligible for the Investment Tax Credit (ITC) in the U.S., which allows you to deduct up to 30 per cent of the cost of your solar system from your taxes, further improving your ROI. Check the DSIRE website for Federal and state incentives and credits. If you don’t have renewable energy installed at home, but want to support green energy, call your utility company. Ask if they buy renewable power for their grid. Ask if they also bought the certified RECs that went with it. If they didn’t, you’re not buying green energy. If they did, you are supporting renewables. You can also use the Green-e website to find power companies offering green energy, and businesses and products that use certified RECs in their power supply. If you see a business that says they are powered 100 per cent by renewable energy, it means they are buying RECs in an amount equivalent to how much electricity they use. It’s not the romantic notion of a wind farm or solar array sending all their generated power to their offices!

RECs in the News

The concept of RECs is confusing, especially if you’re not a power company. It’s very abstract since it’s not tangible. But there is a good example of how they work in Solar Builder. Walmart is installing solar panels on 19 of their stores and two distribution centers in Illinois. The panels will produce enough solar power for 30,000 homes, and Walmart will own the RECs that accompany the power generated. That’s an over-simplified explanation, but hopefully, it will help make sense of RECs. Support renewables with your dollars! Do your homework, and encourage the growth of the renewable energy industry by supporting businesses that use certified green energy.

Would you like to be the first to hear about our new products and more? Sign up for our Nature’s Path Newsletter.