Renewable Energy Certificate (REC)

A Renewable Energy Certificate (REC) is a market-based instrument that represents the environmental and social attributes of renewable electricity generation. When one megawatt-hour (MWh) of electricity is generated from a renewable energy source and delivered to the electricity grid, a corresponding REC is issued. RECs play a crucial role in tracking and verifying renewable energy usage, providing a mechanism for organizations to claim their support for renewable energy and reduce their carbon footprint.

Key aspects of RECs include:

Environmental Attributes: RECs represent the non-power benefits of renewable energy, such as reduced greenhouse gas emissions and environmental impact.
Renewable Energy Claims: Organizations that purchase RECs can claim that they are using renewable energy, even if the electricity they consume is from conventional sources.
Market-Based Mechanism: RECs facilitate the development of renewable energy projects by providing an additional revenue stream for renewable energy producers.

By purchasing RECs, organizations can demonstrate their commitment to sustainability, support the renewable energy market, and meet regulatory or voluntary environmental goals.

Source(s):

U.S. Environmental Protection Agency. (2024). Renewable Energy Certificates (RECs).
Center for Resource Solutions. (n.d.). Renewable Energy Certificates (RECs) Explained.

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