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Are Renewable Energy Certificates (RECs) Encouraging Green Energy Production?

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Alex Rivera

Chief Editor at EduNow.me

Are Renewable Energy Certificates (RECs) Encouraging Green Energy Production?

As in the voluntary carbon market, RECs represent environmental benefits through carbon credits (known as offsets in this context). But unlike carbon credits which only represent additional environmental advantages, RECs directly connect with green power generation while not necessarily acting as additional contributions to environmental health and sustainability.

Facilities seeking to meet emissions goals or demonstrate their green energy commitment face the difficulty of tracking and verifying that their electricity comes from renewable sources, so RECs provide an ideal solution.

Purchasing RECs

Purchase of Renewable Energy Certificates is an easy and direct way to support renewable energy projects. Acquiring these certificates ensure that electricity generated from any given project comes solely from renewable resources while helping increase their demand across the nation.

Companies and organizations typically purchase renewable energy certificates (RECs) to reduce their carbon footprint and meet both regulatory requirements and internal sustainability goals. By purchasing RECs, companies can demonstrate their environmental commitment without investing in costly onsite renewable energy systems such as solar panels or wind turbines that often require extensive wiring rewiring and renovation work.

One REC represents the environmental attributes of one megawatt-hour of power produced from renewable resources like wind, solar, biomass, geothermal or low impact hydro. They may be sold separately from electricity or bundled together; when sold together as bundles they’re known as bundled RECs and can be obtained either from your utility provider or purchased on the open market.

Your Renewable Energy Certificates may come from anywhere within the US, and can be packaged or unbundled according to your needs. Furthermore, Green-e certified RECs provide peace of mind by being verified by an outside party as high-quality products that contribute towards environmental protection while being used according to their intended use.

Once a REC has been purchased and used up, it cannot be resold – similar to a certificate of deposit or gift card – so once it’s gone it cannot be bought again.

Some critics of purchasing renewable energy certificates (RECs) contend that purchasing them does not serve the same purpose as direct energy strategies in reducing carbon footprints. They may point out how company’s reliance on RECs could be misleading and inaccurate, leading to double-counting or not building renewable power sources from unbundled purchases alone. However, such issues have been significantly diminished due to registry tools designed to avoid double-counting and ensure your RECs come from quality sources.

Buying Unbundled RECs

Unbundled Renewable Energy Certificates are an ideal way for buyers looking to support renewable energy while meeting public relations and emissions reduction goals more flexibly. Unbundled RECs can be purchased separately from electricity supply, and typically priced according to market conditions such as supply/demand, technology preferences and RPS regulations in compliance markets. They may even be traded via “REC arbitrage,” where buyers in one state can purchase cheaper RECs in another state in order to fulfill RPS regulations more cost effectively.

In such an instance, purchasing renewable energy credits (RECs) from an oversupplied market could help lower power prices while simultaneously supporting new renewable projects in your region. It is important to remember, however, that purchasing unbundled RECs won’t give the same benefits as purchasing an energy service agreement (ESA) or long-term deal as their emissions reduction benefits would only come from new generation facilities replacing fossil fuel-based power generation facilities with their emission reducing power sources.

Purchase of Renewable Energy Certificates without their associated electricity creates no potential revenue stream; however, with a Bundled PPA or Long Term Deal you have an opportunity to generate revenue alongside the costs of renewable energy to offset other expenses and boost profitability.

Attracting new business and showing leadership on climate change requires supporting renewable energy production directly, through investments such as solar farms or wind turbines. But if your goal is simply meeting corporate social responsibility objectives and showing leadership on climate change without incurring major expenses such as infrastructure investments, purchasing Renewable Energy Certificates may be the most efficient means of doing so.

The Renewable Energy Crediting (REC) System was designed to account for renewable energy generated by projects, and track its return to the grid. Any excess power that is not utilized by its owner is returned back into the grid for use by other consumers on it; given how difficult and costly battery storage solutions are, most of a project’s output goes back into it anyway; this ensures accurate environmental reporting by counting and crediting green energy correctly.

Buying RECs for Compliance

RECs provide evidence that the electricity a person or business consumes comes from renewable resources. Each REC represents one megawatt-hour (1000 kilowatt hours), generated from sources like wind, solar, biomass, geothermal, low impact hydro, or other technologies. As electricity generated at homes and businesses is mixed together onto one national power grid system and it’s difficult to pinpoint exactly where any particular kilowatt hour of electricity came from, RECs help identify any that come from renewable resources and distinguish that from electricity from non-renewable resources.

Many states have Renewable Portfolio Standard (RPS) requirements that mandate utilities produce a certain percentage of electricity from renewable sources, driving the market for Renewable Energy Certificates (RECs). Buyers purchase these RECs to meet compliance needs more easily than with other green power procurement methods such as owned onsite PPAs or offsite purchases. Bundled REC purchases offer another efficient means for fulfilling compliance needs than PPAs or offsite REC purchases.

Other motivations for purchasing RECs include lowering greenhouse gas emissions and showing support for climate action. Companies without the time or ability to install an on-site renewable energy system often opt to buy RECs from an established provider/marketer as this allows them to show commitment while reaching more people interested in sustainability without becoming overly complicated.

Critics of unbundled RECs warn purchasers against overrelying on them as an environmental solution, since these instruments can be traded and sold multiple times and double-counting may lead to inaccurate carbon reduction claims. Furthermore, as they don’t limit fossil fuel production and represent only a small portion of energy usage overall in an organization, it is wiser for purchasers to supplement these purchasing strategies with other efforts such as energy efficiency measures.

Buying RECs for Investment

World leaders recognize the need to reduce carbon emissions, and individuals, businesses, and corporations are taking steps. One way of showing your green energy efforts is through purchasing Renewable Energy Certificates (RECs). You can either directly purchase them or enter a virtual power purchase agreement (VPPA). Both options can help your business meet climate change goals while building relationships with customers and employees.

Unbundled Renewable Energy Certificates (RECs) offer the most flexible and cost-effective approach to buying renewable energy, as you can purchase them from any location across the US without being locked into any one area or type of resource – possibly including non-renewables like coal and natural gas! Unbundled RECs can also help satisfy various compliance and voluntary energy goals, such as REPS reporting requirements or sustainability reporting needs.

Purchase of Renewable Energy Credits can not only reduce your company’s carbon footprint but also help advance renewable energy production across the board. As more RECs are purchased, demand will drive increased renewables to be produced thereby lessening fossil fuel market competition and helping mitigate climate change.

Renewable Energy Certificates can be purchased from numerous renewable energy producers, including wind, solar, geothermal and hydropower without dams. Each provider offers different pricing structures – for instance some provide discounted or even free RECs in exchange for purchasing certain amount of green electricity; while other sell them at market rate – making RECs the perfect way for businesses to reach their REPS or sustainability goals without investing in costly on-site renewables such as solar panels or other technologies.

If you want to know where your RECs come from, consider entering into a virtual power purchase agreement, which allows you to buy part of the physical output from renewable energy projects. This method guarantees that they come from renewable sources while still offering potential locational or additionality benefits.

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