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Green Electricity for Everyone: How Renewable Energy Certificates Work

Naman Bajaj
August 15, 2023

Powering our homes through green electricity sources such as solar, wind, and geothermal can significantly reduce our environmental impact and carbon footprint.

Certain states, also known as deregulated energy markets allow you to choose a green energy provider through the public utility service.

However, if you live in one of the regulated energy markets where you can’t switch electricity companies or are unable to install solar panels on your rooftop, a renewable energy certificate (also known as renewable energy credit or REC) can help you achieve your clean electricity goals.

What is a Renewable Energy Certificate?

Known as the currency of the renewable energy market, a REC is generated when a renewable energy source like solar or wind generates one megawatt-hour (MWh) of electricity and delivers it to the grid.

A solar farm that generates 10MWh of electricity and feeds it into the grid generates 10 RECs. Individuals or businesses can purchase these certificates, which cannot be sold again once they have been bought. This process is known as retiring the RECs.

When you purchase a REC, you are not buying a clean unit of electricity, but rather the environmental benefits associated with it. The physical electricity delivered to your home would not change but REC allows you to legally claim that you are using renewable sources of electricity.

While it is not equivalent to getting renewable electricity at your home, it’s a great way to support the acceleration of green electricity generation without the need to install solar panels or other renewable energy systems.

In deregulated energy markets, purchasing green power means you are buying a clean unit of electricity and the corresponding bundled Renewable Energy Certificate (REC). You can still purchase only the unbundled REC.

Also known as a green tag, a REC comes with a unique tracking number and includes information such as where it was generated, the type of renewable resource it came from, and the date of generation.

All the exchanges are tracked and recorded and this prevents them from being double-counted.

How to purchase Renewable Energy Credits in your state

You can purchase RECs in any U.S. state. If your utility is one of the 850 utilities in the U.S. that offer a green power program, you can purchase your RECs directly from it.

You can also purchase RECs directly from outside suppliers, bypassing your utility. These suppliers allow you to make a one-time purchase or you can enroll for a monthly subscription program.

Look for suppliers that are Green-e certified (filter by residential renewable energy certificate) as it guarantees that the RECs come from a new energy project, and are not double counted. This way, you can help support the expansion of the renewable energy market.

Switching to renewable energy and off of fossil fuels is a crucial part of a low-carbon future, and purchasing RECs is one way to do it.

Naman Bajaj
August 15, 2023

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