What Are Renewable Energy Certificates

Posted on Jun 7, 2014 in Energy Efficiency by Matthew Speer 0 Comments

With increased adoption of the sustainable lifestyle, many organizations are looking to make renewable energy part of their corporate plan. Renewable energy certificates (RECs) were created to allow organizations to support the growth of green energy, even when renewable energy sources are not available locally. RECs have proven popular among corporate sustainability programs considering that just over 50 percent of the U.S. offers green power products as an option locally, leaving many regions without direct green power options. Thus, renewable energy certificates allow eco-conscious organizations to enjoy the benefits of renewable energy use, even if their power comes from traditional means. A bit confusing, though an interesting model that may help propel renewable energy production in America.

What Are Renewable Energy Certificates: Understand the Basics

RECs are known under quite a few different names, such as Renewable Energy Credits, Green Tags, Renewable Electricity Certificates, or Tradable Renewable Certificate (TRCs). Thus, we can easily see why confusion can occur during conversions or when reviewing documentation or articles associated to RECs. While the names are interchangeable, the main premise of flexibility is the same.

According to the EPA, RECs are the environmental and non-power attributes of green energy generation and are actually components of all green electricity products. Buyers of RECs can select the certificates based on the location of the generator and the resource, such as solar, wind or geothermal. They also point out that these certificates are measured by single megawatt-watt increments and exist at the moment of power generation.

In a nutshell, RECs offer flexibility to organizations that want to participate in renewable energy production and consumption, even when renewable energy isn’t available or cost effective locally. For example, if a company creating reusable water bottles wanted to use renewable energy to power their production facility, but only had traditional energy sources available, they could turn to RECs. By purchasing the RECs, the organization allows for additional renewable energy to enter the power grid, even if not being used by their facility, however the reduction of carbon emissions is still gained.

Renewable Energy Credits: Viable Option or Gimmick?

There is a debate among renewable energy experts whether renewable energy credits are an effective way to increase the adoption of green energy. The controversy is even acknowledged by the EPA. They note that since RECs can be sold separately from the actual power generation the potential for fraud does exist unless RECs are tracked from creation to final use. Additionally, some news headlines have uncovered fraud into the hundreds of millions of dollars, stemming from some trying to make a quick buck.

Ultimately, even with some of the negatives, the positives seem to outweigh everything else. By promoting increased production and utilization of renewable energy, we are on a clear pathway to a sustainable living.