Renewable Energy Credits (Certificates)


What is a Renewable Energy Certificate?


A Renewable Energy Certificate (REC) issued through a government authorized tracking system is a document that certifies that one megawatt hour (MWh) of "renewable" electricity was generated by an approved facility. The final owner of the REC is allowed to "claim" that 1,000 kilowatt hours of the electricity that they use in their home or business came from a "renewable" source. (1 REC = 1,000 kWh = 1MWh)

Download Professor Press's Article... (PDF Format)

Renewable energy certificates are a feel-good scam !
New Window Will Open


A Renewable Energy Certificate (REC) should specify the following information...

bulletThe type of renewable resource used to produce the electricity
bulletThe vintage of the renewable generator (the date it was built)
bulletThe vintage of the REC (the date when the electricity was generated)
bulletThe location of the generation facility
bulletThe eligibility of the REC to be used for portfolio compliance (usually important to utility companies)
bulletThe greenhouse gas emission reductions (if any)

What is the point? 

Many people and organizations are willing to pay more for electricity that has been produced in a cleaner, environmentally friendly "renewable" way.  For a business or a person to ethically (and legally) claim that they purchase green energy, they must either switch their actual electricity service to a supplier that actually holds the certificate or, if that is not possible, they must purchase and hold the certificate themselves. The certificates simply allow their final owners to legally claim that they use renewable electricity.  Once that claim is made, the certificate is "retired" and cannot be resold and additional claims cannot be made.

Most RECs have been purchased by utility companies who are obligated by law to maintain "portfolios" of energy production that includes a certain percentage of "renewable" energy.  Unfortunately, rather than actually producing electricity from "renewable" sources, the utilities merely purchase Renewable Energy Certificates in order to be able to legally claim that they have a certain percentage of "renewable" energy in their portfolio.

Many other RECs are purchased by corporations for the social credibility that they believe it provides.  They often attempt to use it as a marketing ploy to...

bulletCreate positive publicity
bulletEnhance their public image
bulletDemonstrate civic leadership
bulletServe as a means of differentiating their brands
bulletGenerate customer appreciation and loyalty
bulletGenerate investor interest
bulletGenerate employee pride


What are some examples of prices for Renewable Energy Certificates?

Example 1 (Wind)  COST is $54 for 12,000 Kwh / Year - View Screen Shot HERE
Example 2 (Wind)  COST is $234 for 12,000 Kwh / Year - View Screen Shot HERE
bulletAs you can see from the above examples, there can be a HUGE cost variation between certificate providers.  
bulletNorth American Power above is priced 433% Higher than Good Energy for the same Kwh / Year purchase.  
bulletIt's important to shop around if you choose to purchase RECs  

Is wind energy really the right choice for renewable energy?

There are those who think that it might not be such a great choice...


How much should someone pay for Renewable Energy Certificates?

Many people believe that it would be far better to directly invest in renewable energy projects such as rooftop solar or energy conservation measures on a smaller local basis.  One might consider purchasing stock at the next public offering of a "green" energy company. If one truly wants to merely purchase paper certificates as a "feel good" solution to a very serious problem, below is a chart which shows how the prices have changed through the previous years.


From whom should I purchase Renewable Energy Certificates?

The Environmental Protection Agency and the certification organization Green-E both maintain lists of actual energy producers who are certified to receive and sell Renewable Energy Certificates.  Many people argue that RECs should only be purchased directly from the "renewable" energy suppliers themselves.  The purchase of RECs from a broker or marketing agent does very little to directly support the businesses that actually generate renewable energy. If you purchase certificates from brokers, sales agents or any other middlemen, much of the money does not actually make it to the people responsible for actually helping to make America more energy independent.  The following links provide some very important information...

Find true green power suppliers in your state...

Purchase RECs directly from truly certified green power providers...

Understand the Environmental Protection Agency's rules.

Be careful about making claims and follow the EPA's guidelines...

Gray Areas In Your Green Power