What Are Green Certificates (or RECs)?
Companies can offset their non-renewable energy consumption by purchasing Green Certificates (also known as Renewable Energy Certificates or RECs), which renewable producers earn for generating clean energy.
A company signs a contract to buy the certificates from renewable energy generators, but buys electricity from a utility or in the wholesale market. Meanwhile, the renewable power generator sells the electricity it produces into the wholesale market.
Green Certificates can be bundled together with a power purchase agreement (PPA) as part of a comprehensive renewable energy strategy and linked to a client’s precise consumption requirements, verifying that all the power they use is renewable.
What Are The Benefits Of Green Certificates?
- They provide verification that a company has paid for the production of renewable energy
- A good option for smaller companies that do not use enough power to justify a PPA but want to decarbonize their power supply, or in regulated markets where PPAs are not available
- Help to support the renewable power market by offering producers an additional revenue stream
- Facilitate an increase in renewable energy capacity, but only if a long-term contract is in place and the money from the certificates funds new projects