What Are Renewable Energy Credits?
Renewable Energy Credits (RECs) are tradable, non-tangible energy commodities that represent proof that a quantity of electricity was generated from an eligible renewable energy resource. RECs represent all the “green” or clean energy attributes of electricity produced from renewable resources like solar PV. A REC includes everything that differentiates the effects of generating electricity with renewable resources instead of using other types of resources. It is important to remember that a REC also embodies the claim to the greenness attributes of renewable electricity generation, and only the ultimate consumer of the REC has rights to the claim; once a producer or owner of a REC has sold it, rather than consuming it themselves, they have sold the claim and cannot truthfully state that they are using renewable electricity, or that the electricity that was produced with the REC is renewable.
The owner and user of a Renewable Energy Certificate (REC) is the only party that can claim the environmental benefits and renewable energy from that REC. Naturally, issues of REC ownership, validity of certain claims and avoiding double counting are central to a robust voluntary renewable energy market.
Most building owners interested in pursuing the installation of a solar PV system on their property are motivated from an interest in using and claiming renewable energy for operations. Understanding the status of a project’s REC status and ownership is critical for organizations who are engaging in the purchase of solar PV arrays or the purchase of solar power. Failure to carefully define ownership of REC may cause the inability of a building owner to claim the renewable benefits they wish to obtain.
Understanding the status of a project’s REC status and ownership is critical for organizations who are engaging in the purchase of solar PV arrays or the purchase of solar power.