Renewable Energy Credits (RECs) allow you to go green – virtually! RECs are how renewable power is purchased and managed. RECs allow companies to buy clean electricity environmental attributes from renewable sources as opposed to owning and producing yourself from on-site generation.
What is a Renewable Energy Credit?
One REC equals one megawatt-hour of power. When renewable energy is produced there are actually two components to the generation; the kilowatts of electricity produced and the environmental attributes of the electricity – the “claim” of green energy. Your organization can purchase RECs derived from wind, solar, geothermal, biomass, and some low-impact hydro facilities. RECs are purchased by the U.S. EPA, Air Force, Fortune 500 companies, major universities and NGOs.
You can purchase RECs in both regulated and deregulated states. In deregulated states, electricity suppliers may buy RECs to cover state mandated Renewable Portfolio Standards. If you want to be considered more “green” than compliance requires, there is the ability to purchase as many certificates as you wish. REC prices can vary widely. Purchasing RECs through a procurement bidding process can yield a lower cost. (View our recent case study on how we saved one client thousands by bidding out for RECs). RECs can be bundled as part of the electric power supply, or “unbundled” and purchased separately from supply.
In some states, a business can purchase RECs through its local utility instead of buying them in the competitive market.
Why buy RECs?
- If you are not sure you want to make the long-term commitment for solar or other renewable generation just yet
- Building/owning on-site generation is not a viable option for your organization but you still want to reduce the emissions associated with the electricity portion of your company’s energy use
- You have facilities in multiple states so a consolidated REC procurement strategy would be the best option to achieve renewable goals at all locations
- Green-e® RECs qualify for points under the LEED Green Power Credit
- Support renewable energy development, meet compliance requirements, support sustainability goals and demonstrate environmental leadership
When your company buys renewable energy credits, it’s supporting the renewable energy industry. REC sales provide income to fund more renewable projects or allow for a project to be more competitive against other traditional generation fuels. When your company spreads the word about their REC purchase and commitment to sustainability, those marketing efforts generate support from your customers, vendors and investors; raising awareness about renewable energy and your commitment to clean energy.
RECs can either be Green-e® certified or not. Green‑e® Energy is a certification for renewable energy and a consumer protection program to ensure quality and verification of ownership. It’s administered by the Center for Resource Solutions, a nonprofit based in San Francisco, CA. Green-e® is recommended or required in leading environmental standards like Leadership in Energy and Environmental Design (LEED), The Climate Registry (TCR), B Corporation, Sustainable Purchasing Leadership Council, and others.
For more information about renewables and buying (or selling) RECs for your company, contact a Usource energy advisor. We can assist you in determining how renewables can fit into your overall energy strategy by assessing both benefits and risks.