Renewable Energy Certificate: How ‘Green’ Are They, Really?

renewable energy certificates
Foto: CC0 / Pixabay / Oimheidi

Renewable energy certificates are helping companies contribute towards the global push of reaching clean energy goals and targets. But are they as good as they seem?

Renewable energy certificates, a.k.a RECs, were introduced following the increasingly evident global demand for a reduction in carbon emissions and move towards the use of clean, green energy. In order to reach these global demands, large corporations, companies and even individual households can procure a REC through the use of renewable energies, including most commonly solar and wind, but which can be also issued through biofules, hydro-power generators and geothermal energy.

Who Can Buy and Sell Renewable Energy Certificates?

RECs are bought and certified from REC energy tracking systems that are based regionally across the United States. For example, Green-e is a non-profit organization that certifies RECs by ensuring no double-counting occurs and that all RECs are properly accounted for. 

Companies or households that are not themselves using renewable energy, but that are otherwise funding renewable energy to compensate for their electricity and energy usage can buy the RECs. This contributes to more renewable energy being added to the grid for others to use. RECs thus certify and track the amount of ‘renewable energy credits’ that are being generated on the companies’ or person’s behalf.

The easiest RECs to acquire are unbundled RECS. These RECs can be bought at any time and applied across any area or country. They are very flexible and so are the most popular form of REC to buy. Bundled RECs however, are bought with the associated energy use already planned. 

Types of Renewable Energy Certificates: RECs vs. SRECs

SRECs certify the use of renewable energy generated from solar panels.
SRECs certify the use of renewable energy generated from solar panels.
(Foto: CC0 / Pixabay / andreas160578)

Similar to RECs are SRECs, a.k.a solar renewable energy certificates. These certificates work just as RECs, but account only for renewable energy that has been generated by solar panels. When deciding which kind of certificate to buy, you should consider that there are pros and cons to solar power.

Both certificates are being used mainly by large companies to compensate for their non-renewable energy usage. These companies are either unable to produce energy using renewable methods, or have elected the ‘easy route’ out of growing green energy demands from the government and public to reduce their carbon emissions and help with reaching clean energy targets.

Pros of RECs

Renewable energy certificates are an important step in the right direction towards cleaning and ‘greening’ global energy usage. There are numerous pros to procuring RECs:

  • Support for renewable energy: Simply by purchasing RECs, the renewable energy market is being supported and promoted. The more companies that purchase RECS, the more awareness for renewable energies is being generated overall.
  • Help reduce carbon footprints: By purchasing RECs, more renewable energy is being generated, and thereby, reducing carbon footprints overall. 
  • Flexibility: If a company does not have the resources or infrastructure to, for example, install solar panels or is based in multiple locations, RECs can still help a company to contribute and improve the usage of renewable energies.
  • Know where your electricity comes from: RECs help to track exactly where electricity comes from, reassuring companies and individuals that the electricity they are using does in fact come from renewable sources.

Cons of RECs

RECs do not guarantee an offset of carbon emissions.
RECs do not guarantee an offset of carbon emissions.
(Foto: CC0 / Pixabay / Chris_LeBoutillier)

Despite the long list of pros to renewable energy certificates, some drawbacks remains:

  • Little effect: RECs do not directly impact the construction of solar or wind farms. The more companies that rely on RECs to reach energy targets are moving further away from the more important task of building more renewable energy farms to increase and improve renewable energy usage on a much larger scale.
  • It is not an offset: An offset is the verified reduction in emissions that has been calculated for an organization. The net emissions of the organization are calculated by subcontracting the organization’s offset. RECs, on the other hand, do not guarantee that fossil fuels are not used nor were avoided in the generation of energy of a particular company. RECs therefore do not directly act as an offset in emissions for an organization or company, who may purchase RECs, but continue to use fossil fuels. 
  • Unbundled RECs are harder to track: The flexibility of unbundled RECs makes assessing the environmental impacts of energy use difficult. There is now an oversupply of RECs, reducing prices in the market so much, that demand and revenue for renewable energy projects are going down.
  • Supply is exceeding demand: RECs are cheap and easy, so the market of renewable energies is un-balanced. This means there is little to no generation of innovation and growth in the renewable energy market itself. 

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