Renewable Energy Credits

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Renewable Energy Credits, (RECs) also known as Green Tags are certificates that are sold and traded in the United States. One REC represents 1,000 kWh (Kilowatt-hoREA) that have been generated from a renewable energy source, such as solar, wind, biomass, hydrogen fuel cells or geothermal. The REC is not to be confused with the energy itself; it stands apart.

For example, the State of California has mandated that by 2020, a third of all electricity must be generated by renewable sources. In order to comply with the legislation, the utility may only be able to produce 25% by renewable generation and will purchase the additional 8% in RECs that will allow them to be in compliance and avoid the installation of renewable energy generators.

RECs are sold or traded on a state-by-state basis. The goal is to reduce greenhouse gases in the atmosphere such as carbon dioxide and hydro-flourocarbons that affect climate change and cause global warming.

If you hear a company is "wind powered" or "buying green power" it probably means they are buying enough RECs to match their electricity usage. There is a common myth that you can "buy green power" from a Retail Energy Provider (REP) and that is somehow different from buying RECs. When you buy green power from a REP it means you are buying your delivered power and a REC, bundled together. The electrons from the wind farm aren't all going to your building either way; you are just ensuring that your usage is replaced in the pool with clean energy. RECs are the only way to track and trade grid-sourced green power.

WHY IS SUPPORTING RENEWABLE ENERGY SO IMPORTANT?

Generating renewable energy:

  • Saves natural resources
  • Does not create air pollution such as carbon dioxide and mercury
  • Provides supplemental income for farmers and ranchers who lease their land
  • Reduces our dependency on fossil fuels
  • Helps fight global climate change
  • Helps build demand for building new clean energy projects