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Renewable Energy Credits (RECs)
What is a renewable energy certificate (REC)?
What do I get if I purchase RECs?
What is a renewable energy certificate (REC)?
Renewable energy certificates (RECs) are the mechanism by which energy suppliers and other entities such as businesses, organizations, and homeowners can purchase clean energy. Specifically, one REC equals the environmental benefits of producing 1,000 kilowatt-hours (kWh) of electricity from a clean energy generation source rather than a fossil fuel source. Since burning fossil fuels to generate electricity releases a lot carbon dioxide and other greenhouse gases, choosing to produce electricity from clean, renewable resources reduces the amount of pollution released from generating electricity.
Technically, when an energy supplier purchases clean energy for its customers it is buying RECs equal to the amount of electricity the customers use. The energy supplier then "bundles" the cost of the REC with the cost of electricity service to deliver clean energy to its customers.
However, anyone can choose to buy RECs from a REC marketer. The value of not polluting, essentially a carbon offset can be sold to others to offset their pollution. Purchasing RECs helps to decrease one’s environmental footprint.
The graphic below helps to illustrate what a REC is. Remember, when you buy clean energy from an energy supplier, the supplier passes the REC onto you with electricity service. When you buy a REC through a REC marketer, you are just purchasing the environmental benefit of the clean energy without electricity service.
1. Buying RECs increases the vitality of the renewable energy market and encourages additional generation projects. Renewable energy resources do not receive the same level of government subsidies as fossil fuel resources. By supporting renewable energy technologies through other market channels, consumers can help to increase the availability of the technology and spur more project development.
2. It’s a way to reduce your environmental footprint. As more electricity is produced from renewable sources, less electricity will be produced from fossil fuels. This helps decrease emissions from electricity generation that leads to smog, acid rain, and global warming.
3. Renewable electricity generation can provide new industries for America. As regional demand for clean energy increases, those regions become attractive to clean energy suppliers. For example, our region already hosts a world class solar panel manufacturing facility and facilities for making wind turbine components. Small businesses benefit through installer networks, contracts and other transactions. Collectively this results in hundreds of high paying jobs, which benefits local economies.
4. It’s easy! You can make a small purchase now instead of buying a hybrid car or installing solar panels. It's just not always possible to make a large financial commitment to a new car or a home improvement project. However, it is easy to make a purchase supporting cleaner energy generation.
5. Anyone can buy RECs. Homeowners, renters, businesses, congregations can all buy RECs. It's a great option if you don’t pay for electricity directly, i.e., if it is included in your rent or lease.
There are several businesses that sell RECs on-line. Residents, businesses and other groups can purchase RECs just like you purchase other products through the Internet. And depending on the marketer, RECs can be a one-time purchase or can be smaller monthly payments. The REC marketers participating in Clean Energy Rewards are posted here. Click through to their web sites to learn more about the product options.
To be eligible for rewards choose to purchase the number of RECs equivalent to at least a 50% of the electricity you use a year. Of course you are encouraged to offset 100% of your electricity use too! The Clean Energy Rewards program will provide consumers with rewards up to 20,000 kWh per year.
You can estimate the number of RECs to purchase in one of three ways:
Type of Home
1-2 Bedroom Apt., Townhouse, or Single-family house
3-4 Bedroom Townhouse or Single-family house
4+ Bedroom Single-family house
Estimated Monthly Electricity Use (kWh)
500
1,000
1,500
Estimated Annual Electricity Use (kWh)
6,000
12,000
18,000
100% Electricity Use Offset (kWh equivalent)
6,000
12,000
18,000
50% Offset -- Minimum REC purchase to receive rewards (kWh equivalent)
3,000
6,000
9,000
What do I get if I purchase RECs?
Some companies will send you a certificate saying you purchased a certain number of RECs, others might send you a nice letter. It depends on the company. What you do get is a reward, or a discount on the price of the REC from Montgomery County, and peace of mind knowing that you contributed to reducing greenhouse gases and have offset your electricity use.
Updated January 9, 2009.