Green Renewable Energy Certificates
Renewable Energy Certificates or REC are a new trend that consumers and businesses are buying to differentiate themselves among energy buyers. They are simply a way to claim your purchase of renewable energy. You may have also heard them being referred to renewable energy credits or various other terms, but they are all the same.
What are RECs?
Green energy providers are granted one renewable energy credit when they produce a MWh they generated from energy using sources such as a wind farm, solar panels, geothermal and others. Renewable energy credits are commodities that can be traded and sold just as ordinary financial commodities. The energy is put into the electric grid and is only differentiated through the use of these certificates. Many independent companies have been established to ensure certification and verification of green energy sources.
I found a good video that gives you a quick overview of what renewable energy credits are:
History
The first time to actually distinguish traditional dirty energy sources from alternate sources was just a little over 10 years ago. Several markets were opened up in the late 90s that traded electricity generated from green sources, but there was little or no regulations on them. In 2001, several green energy companies began to sell REC to consumers to support the development of new technologies. In an effort to create a national accreditation of these tradable certificates (TRC), the Green-e program was created.
Compliance markets have been created by a policy that exists in 25 U.S. states called Renewable Portfolio Standard. Each of these states requires that electric companies supply to their customers a certain percentage of energy from alternate sources. They can meet their requirements by an equal amount of RECs to the percentage of electricity that is required. For example: A state has a requirement of 20% energy from alternate sources. It can then buy 20% of their total electricity usage in the form of RECs to meet the requirement. There are also voluntary markets in which customers or businesses can just buy RECs, as the name suggestions, voluntarily. The energy comes from states with no compliance market and usually come at a cheaper price.
The Department of Energy provides an in-depth history and a full explanation of RECs.
Benefits
There are many benefits that are achieved through having renewable energy credits that include:
- Allows consumers to directly put their dollars towards green energy without having to own the actual electricity generators.
- Standards are in place by various independent organizations to ensure the proper tracking of each certificate.
- Can be bought across state borders.
A hard thing that many people in America face is that they do not currently have green energy offered in their state and maybe not even in a surrounding state. This gives anybody in American access to energy produced from renewable sources. Even though the electricity you use may not come directly from the wind turbines or solar panels that produced it, it will go towards supporting green energy.
Negatives
Just because the idea of RECs seems great, they are not perfect and have some major flaws:
- Communication to all consumers to ensure a good understanding of the process.
- No national standard is yet in placve as they are regulated by several organizations.
- Not guaranteed to get full environmental benefit from buying.
The major problem with buying green credits in some parts of the country is that the green energy generators are not actually located in those area. Say you were to have a coal plant right down the road from you which produces harmful waste products and dangerous CO2 gases. Even if you buy renewable energy certificates from another state, it will not make the environment in your area any better.
Where to Buy From?
The whole processing of buying RECs may seem confusing, but it is no more difficult than buying energy from dirty traditional sources. You can call your local utility company to inquire about them or you can see check the Department of Energy’s Green Power Network site to see who offers green energy in your state.
Please share your experiences if you currently own RECs or your experiences with them.
Comments
This is great to know about. Lets see what this new government is getting for us. Lots of hope from this government, hope he does something good on this respect.