Renewable Energy Certificate (REC) – Definition & Detailed Explanation – Solar Energy Glossary Terms

I. What is a Renewable Energy Certificate (REC)?

A Renewable Energy Certificate (REC) is a tradable certificate that represents the environmental attributes of renewable energy generation. When renewable energy is produced, it is assigned a REC, which can then be sold separately from the actual electricity generated. RECs are used to track and incentivize the production of renewable energy and are often used to demonstrate compliance with renewable energy standards and goals.

II. How do RECs work?

RECs work by separating the environmental attributes of renewable energy generation from the physical electricity itself. When renewable energy is generated, the producer receives both the electricity and the associated RECs. The RECs can then be sold separately to entities looking to offset their carbon footprint or meet renewable energy goals. Each REC represents one megawatt-hour (MWh) of renewable energy generation.

III. What are the benefits of RECs?

There are several benefits to using RECs. First and foremost, RECs help to incentivize the production of renewable energy by providing an additional revenue stream for renewable energy producers. This can help to make renewable energy projects more financially viable and accelerate the transition to a clean energy economy. Additionally, RECs allow businesses and individuals to support renewable energy generation and reduce their carbon footprint without having to install renewable energy systems themselves.

IV. How are RECs used in the solar energy industry?

In the solar energy industry, RECs play a crucial role in incentivizing the development of solar projects. Solar energy producers can earn RECs for each megawatt-hour of electricity generated from solar panels. These RECs can then be sold to utilities, businesses, or individuals looking to support solar energy generation. By purchasing solar RECs, consumers can support the growth of solar energy without having to install solar panels on their own property.

V. What is the difference between RECs and carbon offsets?

While both RECs and carbon offsets are used to support renewable energy and reduce carbon emissions, there are some key differences between the two. RECs specifically represent the environmental attributes of renewable energy generation, such as the reduction of greenhouse gas emissions. Carbon offsets, on the other hand, are credits that represent the reduction or removal of greenhouse gas emissions from sources outside of renewable energy generation, such as forestry projects or methane capture.

VI. How can individuals and businesses purchase RECs?

Individuals and businesses can purchase RECs through a variety of channels. Many utilities offer programs that allow customers to purchase RECs to support renewable energy generation. Additionally, there are online platforms and renewable energy brokers that facilitate the purchase of RECs from a variety of renewable energy projects. By purchasing RECs, individuals and businesses can support the growth of renewable energy and reduce their carbon footprint.