Renewable Energy Certificate (REC)

A Renewable Energy Certificate (REC) is a tradable commodity that represents the environmental attributes of 1 megawatt-hour (MWh) of electricity generated from a renewable energy source, such as solar, wind, or hydropower. RECs are used to track the environmental benefits of renewable energy generation and to support the development of new renewable energy projects.

The value of a REC is determined by a number of factors, including the supply and demand for RECs, the cost of renewable energy generation, and the policies that support renewable energy development. In general, the value of a REC has been increasing in recent years as the demand for renewable energy has grown.

RECs can be traded on a number of different exchanges, both in the United States and internationally. The most active market for RECs is the California Independent System Operator (CAISO) market, which accounts for a significant share of the global REC market.

There are a number of benefits to using RECs. First, RECs can help to support the development of new renewable energy projects. When a renewable energy project is built, the developer can sell the RECs associated with the project to generate revenue. This revenue can help to offset the cost of building the project and can make it more financially viable.

Second, RECs can help to increase the demand for renewable energy. When consumers purchase RECs, they are essentially signaling their support for renewable energy. This can help to create a market for renewable energy and encourage more renewable energy projects to be built.

Third, RECs can help to reduce greenhouse gas emissions. Renewable energy sources, such as solar and wind, do not produce greenhouse gases. When consumers purchase RECs, they are essentially helping to support the production of renewable energy and reduce greenhouse gas emissions.

RECs are a valuable tool for supporting the development of renewable energy and reducing greenhouse gas emissions. They can help to create a market for renewable energy, increase the demand for renewable energy, and reduce greenhouse gas emissions.