This resource—which is one of many instrument summaries offered by the Clean Energy Finance Solutions Center—provides in-depth information about tradable renewable energy certificates, including best practices, case studies, design and implementation information, experts and training opportunities.
Renewable energy certificates (RECs) represent the environmental attributes associated with one megawatt-hour (MWh) of electricity production. RECs can be traded, bought and sold separately from commodity electricity. In cases where a renewable electricity standard (RES) is in place, compliance can be demonstrated by the use of RECs. RECs can be bundled with the electricity generation itself or unbundled and sold separately, with one entity purchasing the electricity generation itself and the other purchasing the renewable characteristic of the generation. Effectively designed REC systems support robust, accurate and efficient tracking and accounting of renewable energy generation. REC systems can support a market-based and flexible approach to expand renewable energy investment.