Renewable energy certificates also popularly known as Renewable Energy Credits of RECs are an initiative that represents the energy generated by renewable energy sources, such as wind or solar power facilities. Buying REC energy is not equivalent to buying electricity. Rather, RECs represents the clean energy traits of renewable electricity.
So, how do REC credits come to be? Well, electrons enter the electricity from different sources, ranging from wind and solar to natural gas and nuclear power. As a result of this, there’s no way to know precisely what energy source your electricity emanates from.
To help curb this issue once and for all, you can purchase REC credits together with your electricity. RECs are merely certificates that transfer the ‘renewable’ aspects of renewable energy to the owner. In short, REC credits, paired with electricity from the grid, are renewable energy generated on your behalf.
It is worth mentioning that RECs are generated when a renewable energy source produces one megawatt-hour (MWh) of electricity and delivers it to the grid. Assuming a wind power produces 5 MWh of electricity. Well, they have five credits to keep or sell.
In the event that your business buys those credits, you’re buying the ‘renewable’ aspect of the electricity from the wind farm, and you can say that 5 MWh of your electricity emanated from a renewable source.
There’s no way in which a REC that has been sold once can be purchased again. All REC credits are uniquely numbered and generally include information such as where they were generated, the type of renewable resource they came from, and the generation date. The exchange of REC energy is tracked and recorded.
The good thing about RECs is that it offers certified proof that you’re using renewable energy from the grid without the need to install solar panels or other renewable energy systems at your business or home. You can deem them to be a tracking system for renewable energy.
We can never sign off without mentioning the sheer fact that REC procurement supports the renewable energy market by offering a demand signal, encouraging renewable energy production to meet the demand.
In this way, RECs not only help ensure businesses meet their carbon emission targets, they also encourage renewable energy generation. No wonder it is a good fit for businesses that want to support the renewable energy market.