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Renewable Energy Credits (RECs)

Category: Energy Supply, Renewable Energy Credits

Renewable energy credits are non-tangible commodities that represent the property rights to the environmental and social benefits of renewable energy. One REC is equal to 1 megawatt hour  (MWh) of renewable energy produced. RECs are created at the time of electricity generation by renewable energy sources such solar, wind, geothermal, etc. RECs are verified, managed and traded by third-party organizations.

Benefits

  • One of the easiest and most flexible ways to mitigate purchased electricity related emissions.
  • Supports development of renewable energy resources by providing an additional revenue stream.
  • Minimal upfront cost with no long-term contract required.
  • Universities could not only purchase clean energy, but sell their own REC’s if existing wind or solar operations overproduce

Challenges

  • By definition, purchasing RECs will increase electricity costs.
  • RECs vary greatly in quality, traceability and price.
  • Not all stakeholders may view this as a genuine carbon-mitigation strategy.
  • Can vary greatly state-to-state
Renewable Energy Credits

Impacts

  • GHG Impact

    Enormous

    Can be significant if large amounts are purchased

  • Economic Impact

    Small Net Cost

    By definition purchasing RECs is cost-additive.

  • Feasibility

    Doable

    Many institutions are already purchasing RECs.

  • Timeline

    < 1 year

    RECs are available for purchase. Internal approval may take time.

  • Maintenance

    Low / None

    Other than annual monitoring and purchasing, there is no maintenance required.

  • Publicity

    That's cool

    One of the most accessible solutions but stakeholders may remain skeptical.