RENEWABLE ENERGY CREDITS

Renewable Energy Credits (RECs) are certificates issued by a government agency to a power company which utilizes environmentally friendly methods to generate electricity.  The Renewable Energy Credits can in turn be traded and sold on the open market, providing an incentive to companies which produce “green” power. Citizens and companies who are trying to support green power can also take advantage of Renewable Energy Credits, regardless as to the source of their power.

Sources of green power include solar, wind, geothermal, biomass, biodiesel, some fuel cells, and low impact hydropower.  In a company which uses these sources in a state which participates with the Renewable Energy Credits program, the company is offered one credit for a set amount of energy produced, typically 1,000 kilowatt hours. The credit is given a distinct number so that it can be tracked, the power is fed into the grid, and the company offers the credit for sale.

Renewable power companies benefit from Renewable Energy Credits because they serve as an incentive. Many non-renewable energy sources are subsidized, making it difficult for green energy companies to survive. By being able to sell the power and Renewable Energy Credits, the company can afford to thrive in the market. Prices for Renewable Energy Credits vary widely, just like other commodities, and they are available for sale in numerous locations.

By purchasing Renewable Energy Credits, consumers can claim that they are supporting green energy.  While a consumer would ideally also purchase renewable energy for his or her home, this is not always possible. Renewable Energy Credits allow companies and individuals to support alternative power in areas which do not offer it directly. Consumers should also, of course, practice conservation and work to get green power in their area, but Renewable Energy Credits are a good place to start.  For companies, they are an important part of doing business responsibly, while thinking about future generations.