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Renewable Energy Certificates (RECs) PDF Print E-mail
Written by greeniac40021   
Monday, 12 May 2008

Renewable Energy Certificates (RECs)
The Sun is an ideal source of renewable energy.
With rising global populations, an ever increasing demand for energy, and compelling evidence for climate change, it is crucial that we invest in energy technologies that are not dependant on dangerous and polluting fossil fuels. While policy makers, scientists, and businessmen will have to take a lead role in developing and propagating these technologies, individuals can make a difference, too. Renewable Energy Certificates (RECs) are one of the easiest ways for individuals to support the generation of clean, renewable energy.  RECs make it possible for any individual, no matter where they live, to purchase renewable energy and encourage the growth of clean energy sources like wind farms, solar arrays, or biomass projects.

Essentially, when electricity from a renewable source is produced, there are two marketable products: the actual electricity and the social and environmental benefits of renewable power generation. The social and environmental benefits are accounted for and sold as RECs and the electricity is generally sold separately to a local power grid. This might seem strange at first, but it makes sense when you consider how the electricity infrastructure in the United States is set up. Simply put, there are central power “grids” around the country.  All power generators, both renewable and non-renewable sources alike, feed electricity into a grid where it is then dispersed to the utility companies and the people who need it.  Once electricity enters a power grid, the electrons from power generated by a wind farm are indistinguishable from those generated by a coal plant.

Even though it may all look the same in its electron form, energy is not created equally.  Electricity generated from coal or natural gas spews nasty chemicals into the air, most notably carbon dioxide, one of the main culprits for global temperature increases. Renewable energy generation is carbon free and uses renewable sources like wind, sunlight, and even trash or cow poop to generate electricity.  In addition to the negative effects caused by burning fossil fuels, coal, natural gas and oil are all finite resources that are quickly dwindling. The social and environmental benefits of renewable energy are vast, and many individuals choose renewable energy for these reasons.

Electricity generated from renewable energy is still a little more expensive than that from fossil fuel sources. Some states require that utilities get a certain percentage of their energy mix from renewable sources, in which case they would pay full price for clean energy, effectively purchasing the REC and the actual electricity generated. Without laws requiring utilities to make renewables a part of their energy mix most utilities will still choose to purchase the cheapest energy for customers. In a way, RECs have addressed the cost limitations of renewable energy and created a system where everyone wins. The electricity from renewable sources is sold to energy grids and has become an important and affordable power source for many utilities.  Customers, who otherwise would not have the choice to purchase renewable energy, have been given the chance to fund and guarantee the social and environmental benefits of clean electricity production, simultaneously increasing demand for and viability of renewable energy in the marketplace. An individual purchasing RECs is assured that, even if the actual electrons from a renewable source aren’t being used to power their specific needs, that amount of clean power was sold to the power grid, displacing electricity from fossil fuel production and the negative effects therein.

Biologic Joint Reconstruction
Wind farms provide clean, renewable energy at prices competitive to those of fossil fuels.
Usually there is a middleman - most likely a company or a non-profit – that purchases RECs from renewable energy producers, and then markets these RECs to individuals and organizations. You can find a pretty complete list of REC providers at the US Department of Energy's Energy Efficiency and Renewable Energy Website.  These businesses are regulated for authenticity by a third-party not-for-profit organization that requires proof that the RECs are legitimate and not being sold to more than one individual. Individuals interested in reducing their carbon footprint can continue to purchase electricity from their local provider, and then purchase RECs from a local REC provider.

RECs are just one way for individuals to take action against climate change and reduce environmental impact. Obviously, this is just one part of the solution to the ever growing problem. However, the more people that demand renewable energy, the faster the industry will grow, and the less we will rely on fossil fuels to serve our energy demands.  We can all make a difference, one kilowatt hour at a time. 
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Comments (2)
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1. 16-05-2008 14:41
thanks for clarifying REC's!
Excellent Article!  
 
Before I read this I skeptically thought that it was similar to the gimmick that carbon offsetting is. Instead, REC's is a great idea. Whereas buying carbon offsets amounts to cheating, REC's actually promotes real change.  
 
If you are trying to lower costs on your personal budget, it's probably better to invest in alternative off-grid technologies for personal use.  
 
But if money is an object and yet you still want to contribute towards real change, REC's are affordable and amount to donating money towards sustainable energy which is likely to have a significant impact in your local area. If you reside in the SF Bay Area, you might check out www.villagegreenenergy.com
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greeniac13
2. 16-05-2008 12:47
Good RECs vs Bad RECs
Fantastic article that captured the benefits to society of buying RECs. One point worth noting for consumers is that it is important to consider what state the RECs a vendor sells you are from. In many states (see the map here: http://www.eere.energy.gov/states/maps/renewable_portfolio_states.cfm) 
electric companies are required to purchase a certain percentage of their electricity from renewable energy. When you buy RECs from these states, you buy them away from the electric companies, forcing them to install new capacity to meet their renewables goals. 
 
Other states don't have this requirement on the electric companies. When you buy RECs from a state like Kansas or Nebraska, you don't force the local utility to install more renewable capacity, because they aren't required to buy renewables. As a result, RECs from these states have much less of an impact (and not coincidentally, are much cheaper for marketers to buy and resell to customers). 
 
We've tried to educate people about this difference here: www.villagegreenenergy.com/wonk-zone 
 
-Mike
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