What is a Renewable Energy Certificate (REC)?

A renewable energy certificate is simply the approved method for transferring, trading, selling or buying the environmental benefit associated with renewable energy.  

To understand renewable energy certificates, you first need to understand what makes renewable energy desirable, as well as a little about how electricity is transmitted. 

Renewable energy is basically: 

  • Commodity electricity (neutral electrons) + environmental benefit (renewable energy credits) 

Renewable energy needs to be separated into these two parts because of the nature of the energy grid. When electricity is transmitted through the power grid, it has no environmental attributes. It is simply made up of neutral electrons. There is no way to tell the difference between an electron that was delivered to the grid by a renewable power plant and one from a coal fired power plant. What is of concern is not the electrons themselves, but rather how the electron stream was generated. 

Renewable Energy Certificates are a way for producers of renewable energy to sell the two parts separately since it is MUCH more complicated to sell them together and most residential customers, like those buying Blue Sky would not have the opportunity to purchase them together. The credits can be sold to anyone who wants to support renewable energy, while the electricity is sold on the open market without any claim about its environmental attributes. 

Information on Rocky Mountain Power's use of RECs »

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