What are renewable energy credits?

For every kilowatt hour of electricity a renewable generator generates, it also generates a one-kilowatt hour renewable energy credit.  The generator can sell both commodities together as “renewable electricity” or sell the electricity as “generic” electricity to one buyer and the RECs to other buyers.

Legally, it’s all about who owns the RECs

See a picture at the wholesale utility level

See a picture at the retail household/business level

Here’s a simple way to think about it.  Let’s say your utility offered you the opportunity to pay a little more each month for wind power, and you did.  From that point on, the electricity feeding your meter would be exactly the same as it was before you started buying wind power.  That’s because all electricity is the same, and you can’t tell particular electrons to go to a particular house on the grid. 

So what do you get when you buy wind power from your utility?  You get electricity from the mix of all sources feeding the grid, and “credit” for having had the electricity you use replaced with wind power.   That “credit” is the core of renewable energy credits, or RECs.  When you buy wind power from your utility, you’re really just buying ordinary electricity and RECs in the same transaction from the same supplier.   In fact, your utility may or may not buy wind power on your behalf – they may simply buy wind RECs for you.  Either way it’s the same.  Because all electricity is the same, ownership of RECs and an equal amount of ANY electricity is legally deemed to be ownership of renewable electricity.

As an alternative, you can continue buying the electricity you’re going to get anyway from your utility, and use that “little more each month” to buy RECs from any of several REC suppliers.  NativeEnergy is such a supplier, but with a twist – with NativeEnergy your purchase can help finance construction of a specific new renewable energy project.  Learn more.