A Renewable Energy Certificate (REC) is a market-based instrument that represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from renewable sources. RECs are created when renewable energy is produced and can be bought, sold, or traded separately from the actual electricity. They allow businesses and individuals to support renewable energy development and offset their carbon footprint.
Technical Details
Each REC represents 1 MWh of renewable energy generation. RECs are tracked through electronic registries and assigned unique serial numbers. They comply with standards set by the North American Renewable Energy Laboratory (NREL) and state renewable portfolio standards. The certificates remain valid for 3 to 5 years depending on program requirements.
Applications in Energy Programs
RECs enable renewable energy procurement without physical delivery of power. Companies use them to meet corporate sustainability goals and comply with renewable energy mandates. Property owners can purchase RECs to align with green energy commitments.
Practical Significance
RECs provide financial incentives for renewable energy projects and make renewable energy accessible to customers in areas without local renewable resources. Prices typically range from $10 to $50 per certificate, varying by region and energy source.