REC’s – Dollars and Sense

February 25, 2008

RECs, Renewable Energy Credits, Green Tags, Tradable Renewable Certificates, Renewable Energy Certificates. What does it all mean? Let’s begin with the basics of renewable energy (also referred to as clean energy). There are varying forms of this energy which are derived from resources that can not be depleted. In other words, these resources are naturally replenished. Wind and Solar power are two common examples of renewable/clean energy. Biomass, Biodiesel, and Geothermal are also types of clean energy. 

So what exactly is a REC (Renewable Energy Certificate) and how much does one cost? According to Wikipedia’s definition of Renewable Energy Certificates, RECs are “tradable environmental commodities that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource. These certificates can be sold and traded and the owner of the REC can claim to have purchased renewable energy.” Businesses and individuals can buy these RECs whether or not they have access to clean energy.

The cost of the REC depends on which type of renewable energy one is interested in purchasing. The price of these renewable energies can fluctuate. The quantity of the RECs purchased is often determined by how much electricity a business or home uses over a period of time. The REC provider will help you with the calculation. Suffice it to say that RECs are not super expensive. For example, a business I know recently purchased RECs to offset their yearly energy consumption in their 6,000 square foot office. The total amount of the RECs was less than $350 for the year.

The bottom line is that purchasing RECs makes good business and environmental sense without breaking the bank.


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