Renewable Energy Certificates in the United States

A renewable energy certificate, usually shortened to REC, is the paperwork that lets anyone in the United States say they "use" renewable electricity. It is one of the least visible and most important parts of the American power system. Every claim about a company running on "100% renewable electricity," every state law requiring utilities to buy a share of their power from wind or solar, and every green-power option on a residential bill rests on these certificates. They are also among the most argued-about instruments in climate policy. Supporters see a working accounting system that keeps renewable claims honest. Critics see a loophole that lets buyers take credit for clean power without causing any new clean power to exist.

This article explains what a REC is, where the system came from, how certificates are created, tracked, traded and retired, how they are used for state mandates and for voluntary purchases, what they cost, and where the real weaknesses are. It closes with practical guidance for households and organizations and a set of common questions.

What a REC actually is

The basic definition

The U.S. Environmental Protection Agency defines a REC as "a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable electricity generation." A certificate is issued when one megawatt-hour (MWh) of electricity is generated by an eligible renewable resource and delivered to the grid.

That definition contains three ideas worth unpacking.

First, a REC is a unit of 1 MWh. One megawatt-hour is 1,000 kilowatt-hours, the unit on a household electric bill. Every certificate stands for exactly that amount of renewable generation, no more and no less.

Second, a REC is about attributes, not electrons. The certificate does not contain electricity and cannot be used to turn on a light. It represents the "renewable-ness" of a megawatt-hour: the fact that it was made by wind, sun, water, geothermal heat or another qualifying source, along with the environmental characteristics that come with that.

Third, a REC is property. The person or company that owns the certificate owns the right to claim that megawatt-hour as renewable. If they sell the certificate, they sell that right.

Why the grid needs a certificate at all

The reason the system exists is physical. Once electricity enters a shared grid, it is indistinguishable. A wind turbine in Oklahoma and a gas plant in Texas push power into the same network, and the electrons flowing into any particular building come from whatever generators happen to be nearby and running. There is no way to "route" wind power to one customer and gas power to another.

The EPA puts it directly: because physical electricity does not reveal its origin, RECs are the instrument used to account for, track and assign ownership of renewable generation and use. On a shared grid, whether the renewable source is on a company's own roof or a thousand miles away, the certificate is what substantiates a claim to be using renewable electricity. The EPA also describes RECs as the accepted legal instrument for such claims in the U.S., supported by multiple levels of government, regional grid authorities, nonprofit groups, trade associations and case law.

In short, the REC turns an invisible physical fact (some renewable power was made and put on the grid) into a countable, ownable, tradable record.

Other names

The same instrument goes by several names. The Wikipedia article on the U.S. system lists "green tags," "renewable energy credits," "renewable electricity certificates" and "tradable renewable certificates" (TRCs). Certificates created specifically by solar generation are called solar renewable energy certificates, or SRECs. Outside North America, broadly similar instruments include Guarantees of Origin in Europe and International RECs (I-RECs) used in many other countries.

What is written on a certificate

A REC is a data record. The EPA lists the kinds of information a certificate typically carries, noting that the list is not exhaustive:

These fields matter because RECs are not all the same. A certificate from a solar farm built last year in New Jersey and one from a decades-old wind farm in the Midwest both represent 1 MWh, but they may differ enormously in price, in legal eligibility and in what a buyer can credibly claim.

How the REC system came to be

State mandates came first

The modern REC market grew out of state laws requiring utilities to buy renewable power. The earliest of these was in Iowa. In 1983 Iowa enacted its Alternative Energy Production law, which required the state's two investor-owned utilities to own or contract for a combined 105 megawatts of renewable generating capacity. It is widely described as the first renewable portfolio standard (RPS) in the country. The law lacked strong enforcement provisions, and the utilities were able to delay for years; the Iowa Utilities Board ordered compliance in July 1996. The board later split the 105 MW requirement between MidAmerican Energy (55.2 MW) and Interstate Power and Light (49.8 MW), based on their shares of 1990 peak demand. Iowa's wind industry ultimately grew far beyond that original target.

Iowa's law was a capacity requirement: build or contract for a certain number of megawatts. Later RPS laws in other states mostly took a different form, requiring that a percentage of retail electricity sales come from renewable sources by a given year. That percentage approach created the need for a unit of account. If a utility must show that, say, 20% of the megawatt-hours it sold were renewable, it needs a way to count renewable megawatt-hours, including ones bought from generators it does not own. The certificate is that unit.

Texas builds the first full tracking system

According to a 2003 review by the Center for Resource Solutions, Texas developed the first comprehensive REC system in the United States: a web-based platform for issuing, registering, trading and retiring certificates. The Texas REC program began operating in July 2001. Its design, with certificates created from metered generation data and retired when used, became a template for the regional tracking systems that followed.

Voluntary demand and certification

Alongside the compliance market, a voluntary market grew among households and businesses that wanted to buy renewable power by choice. The Center for Resource Solutions, a San Francisco nonprofit, launched the Green-e Energy certification program in 1997. CRS describes it as the first certification program of its kind. Green-e sets standards for what renewable products sold to consumers must contain and audits sellers to verify that what they sold matches what they bought and retired.

Corporate accounting rules

The other major force was corporate greenhouse gas accounting. In 2015 the Greenhouse Gas Protocol, the most widely used standard for corporate emissions inventories, published its Scope 2 Guidance. It required companies to report emissions from purchased electricity in two ways: a "location-based" figure using the average emissions of the grid where they operate, and a "market-based" figure reflecting the contracts and certificates they actually hold. Under the market-based method, energy attribute certificates such as RECs are the main way a company can report low- or zero-emission electricity. The guidance sets out eight Scope 2 Quality Criteria that these instruments must meet to be used. Companies without qualifying instruments must use a "residual mix" emissions factor.

That rule turned RECs into a central tool of corporate climate reporting and helped drive large voluntary purchases.

How a REC is created, tracked and retired

Step 1: Generation is measured

A renewable generator, whether a large wind farm or a utility-scale solar plant, registers with a tracking system. Its output is metered. For each MWh it delivers to the grid, the registry issues one certificate with a unique serial number and the data fields described above. Small systems such as rooftop solar may also generate certificates, sometimes through aggregators who combine many small systems into one registry account.

Step 2: The certificate sits in an account

The newly created certificate is deposited in the generator's account in the tracking system. At this point the generator holds two separate things: the physical electricity, which it has already sold into the grid or to a utility, and the certificate representing that electricity's renewable attributes.

Step 3: It can be sold, with or without the power

The certificate can then move in two broad ways.

• Bundled: sold together with the electricity it represents, often through a long-term power purchase agreement (PPA) between the generator and a buyer.
• Unbundled: sold separately from the electricity. The power goes to whoever buys it on the grid, and the certificate goes to a different buyer, who may be anywhere.

RECs can move directly between generator and buyer, but brokers, marketers and asset managers are common intermediaries. Generators often sell certificates to these intermediaries, who resell them later.

Step 4: Retirement

The step that gives the system meaning is retirement. When a buyer wants to claim the renewable attributes, whether to meet a state mandate or to support a voluntary claim, the certificate is retired in the tracking system. Retirement is permanent. A retired certificate cannot be sold again, which is how the system tries to prevent the same megawatt-hour from being claimed twice. A REC that has been bought but not retired is still just an asset sitting in an account; it is the retirement that supports a claim.

The regional tracking systems

The United States has no single national registry. Instead, certificates are tracked by regional and state systems that broadly follow the boundaries of grid operators and power pools. The main ones named in the Wikipedia article include:

Because certificates carry unique IDs and are retired inside these registries, double issuance within a single registry is difficult. The harder problems, discussed below, are about what claims people make with certificates and whether those claims are meaningful.

Two markets: compliance and voluntary

The compliance market

The compliance market exists because of state law. A renewable portfolio standard requires electricity suppliers to source a set percentage of their retail sales from eligible renewable resources by specified dates. Suppliers demonstrate compliance by retiring RECs equal to the required share of their sales.

Berkeley Lab, which publishes the standard annual status report on these policies, counted 29 states plus the District of Columbia with mandatory RPS policies in its 2024 edition. Sixteen of those states had final targets of at least 50% of retail sales, and four had 100% RPS targets. In addition, 16 states had adopted 100% clean electricity standards (CES), which can count non-renewable zero-carbon sources such as nuclear; most of those states also have an RPS.

Two examples cited in the Wikipedia article show how these targets were written: California required 33% renewable electricity by 2020, and New York had a 24% requirement by 2013. Both states have since adopted much higher targets.

Berkeley Lab's 2024 summary also gives a sense of how these policies have shaped the grid:

Most compliance markets also include an alternative compliance payment (ACP): a price per missing MWh that a supplier pays if it cannot or does not retire enough certificates. In practice the ACP acts as a ceiling on REC prices in that market, because no supplier would pay much more for a certificate than the penalty for not having one. Berkeley Lab noted that New England's main class of RECs traded near $40 per MWh in 2023, "just below ACP rates," while PJM Tier I RECs rose to about $35 per MWh by the end of 2023, surpassing ACP levels in some states.

Solar carve-outs and SRECs

Some states require that a portion of their RPS come specifically from solar, or from small distributed systems. This creates a separate solar REC market. The Wikipedia article explains the logic: without a set-aside, an undifferentiated RPS market tends to favor wind, which historically had better economics and scale, so solar carve-outs were intended to promote diversity of resources.

SREC markets have been volatile. The Wikipedia article, citing SRECTrade data, reports that a 2010 New Jersey SREC traded around $665 in July 2010, while New Jersey SRECs were around $160 in May 2014. In Delaware the corresponding figures were $255 and about $50. By 2021, SREC prices across state markets ranged from about $10 to more than $400 depending on the state. Berkeley Lab's 2024 report found solar REC prices "relatively stable but vary widely," with the highest at $200 to $450 per MWh in New Jersey, Massachusetts and the District of Columbia.

Those swings matter for homeowners and solar investors. In states with strong SREC markets, certificate sales have at times been a major part of the economics of a rooftop system. When too much solar was built relative to the carve-out, prices fell sharply, and investors who had counted on high SREC income were caught out.

The voluntary market

The voluntary market consists of buyers who are not legally required to buy renewable power but choose to. Most corporate purchases and household green-power programs fall here. In states without an RPS, or for generators whose output is not needed for compliance, RECs can be sold to voluntary buyers, usually at lower prices than compliance certificates.

The National Renewable Energy Laboratory tracks this market in an annual "Status and Trends in the U.S. Voluntary Green Power Market" report. For 2022, NREL figures put total voluntary green power purchases at about 272 million MWh, bought by about 9.6 million retail electricity customers. A 2023 NREL presentation broke that down by purchase route:

Two features stand out. Unbundled RECs were the single largest route by volume, and they were bought by relatively few, mostly large, customers. Power purchase agreements were bought by even fewer buyers, but each represents a very large contract, usually by a big corporation.

The Green-e program provides another view. CRS reported that Green-e certified retail sales exceeded 125.5 million MWh in 2023, up nearly 10% from 2022, with more than 21.4 million MWh from solar and more than 1.3 million retail customers, including almost 314,000 businesses. For 2024, CRS reported certified sales of more than 143 million MWh, the highest on record for the program.

Voluntary REC prices

Voluntary unbundled RECs have historically been cheap. NREL's report on 2021 data noted that nationally sourced, Green-e eligible RECs had been under $1 per MWh from about 2015, then rose from $1.50 per MWh in December 2020 to $6.60 per MWh by August 2021 as demand surged. For comparison, the U.S. Energy Information Administration reported that the average residential utility customer bought about 10,791 kWh in 2022, or roughly 11 MWh. At $1 to $7 per certificate, a household could match its entire annual consumption with unbundled RECs for somewhere between about $10 and $75 a year.

That low price is both the appeal and the core criticism of unbundled RECs, a point returned to below.

What qualifies as renewable

Eligibility rules differ by state and by certification program. Drawing on Green-e standards and a summary of RPS rules, the Wikipedia article lists resources that commonly qualify:

• Solar photovoltaics
• Wind
• Geothermal
• Low-impact hydropower, typically small run-of-river facilities rather than large dams and reservoirs that significantly alter river flows
• Biomass, biofuels and landfill gas
• Fuel cells, but only when powered by hydrogen produced from qualifying renewable generators rather than fossil fuels
• In some states, combined heat and power (cogeneration)

State definitions vary on the edges. Some states count existing large hydropower, some do not; some give credit to waste-to-energy, others exclude it. A REC that is eligible in one state's compliance market may not be eligible in another's, which is one reason prices differ so widely.

Worked examples

The numbers below are illustrations. The calculations are correct, but the inputs are hypothetical and chosen only to show how the arithmetic works.

Example 1: A company matching its annual consumption

A hypothetical company uses 10,000 MWh of electricity a year across its offices. To report zero market-based Scope 2 emissions from that electricity under the GHG Protocol, it needs to hold and retire qualifying instruments covering all 10,000 MWh.

If it buys unbundled RECs at a hypothetical $5 per MWh:

• 10,000 MWh x $5 = $50,000 per year.

If, instead, it signs a PPA for a new wind project, it might buy both the power and the RECs from that project. Its electricity cost might be higher or lower than its current utility rate, depending on market prices, but the RECs come bundled and the company has a direct contractual link to a specific project.

The first approach is cheaper and simpler. The second is much more likely to be associated with new renewable capacity being built.

Example 2: A utility meeting a portfolio standard

A hypothetical utility sells 10 million MWh a year in a state with a 30% RPS requirement for that year.

• Required RECs: 10,000,000 x 0.30 = 3,000,000 RECs.

Suppose it owns renewable generation producing 2,000,000 MWh, keeping and retiring those RECs. It must find another 1,000,000 RECs. If the state's ACP is a hypothetical $40 per MWh and market RECs cost a hypothetical $35, buying them costs:

• 1,000,000 x $35 = $35 million.

Paying the ACP instead would cost:

• 1,000,000 x $40 = $40 million.

So the utility buys certificates. If market prices rose above $40, it would rationally pay the ACP instead, which is why the ACP acts as a price ceiling.

Example 3: A homeowner with rooftop solar in an SREC state

A hypothetical 8 kW rooftop system produces 10,000 kWh a year. That is 10 MWh, so the system generates 10 SRECs a year.

• At a hypothetical $200 per SREC: 10 x $200 = $2,000 per year.
• At a hypothetical $50 per SREC: 10 x $50 = $500 per year.

This shows how sensitive solar economics in such states are to SREC prices, and why the market crashes described above hurt investors.

It also illustrates a point covered in the claims section: if the homeowner sells those 10 SRECs, someone else now owns the right to call that 10 MWh solar. The homeowner still uses the electricity, but can no longer accurately say their home runs on solar power.

The big debates

Additionality: does buying a REC cause anything?

The most important question about RECs is whether buying one leads to more renewable energy being built. This idea is called additionality. In emissions accounting it means that a purchase introduces new renewable energy onto the grid beyond what would have happened anyway.

The concern is easy to state. Suppose a wind farm was built because it was profitable selling electricity, and it would have run regardless. Every MWh it produces creates a REC. If a company buys those RECs for $2 each, the wind farm earns a little extra, but nothing changes on the grid: the same turbines spin, the same fossil plants run. The buyer, though, may report that its electricity use has zero emissions.

Research supports the concern for at least part of the market. Michael Gillenwater and co-authors, in a 2014 paper in the journal Renewable Energy, studied additionality of wind energy investments in the U.S. voluntary green power market and, drawing on data from 2004 to 2011, found that voluntary REC purchases did not lead to significant additional renewable investment or generation in that period. A companion 2013 paper in Energy Policy built a probabilistic model of wind investment decisions and the influence of the green power market. The Wikipedia article cautions that market changes since then may limit how far these findings apply.

The price data reinforce the point. When unbundled national RECs traded below $1 per MWh, as NREL reported for roughly 2015 to 2020, the revenue they provided was tiny compared with the cost of building a wind or solar plant. Few projects could have been built because of that income.

Defenders make several responses. REC revenue matters more for marginal projects and for small generators. Long-term contracts for RECs, sold in advance, can help finance new projects, and the Wikipedia article notes that some organizations sell RECs forward to guarantee a fixed price for a future project. Corporate PPAs, which bundle RECs with long-term contracts for specific projects, are widely seen as more likely to be additional. And in compliance markets, the RPS itself creates demand that does drive building, as Berkeley Lab's figures on RPS-linked capacity growth show.

There is also an argument from the other side. Some critics, as noted in the Wikipedia article, argue that requiring additionality functions as a subsidy, and that normal supply and demand already prevent excessive renewable generation in some markets.

Double counting

A second debate concerns double counting: two parties claiming the same renewable megawatt-hour. Tracking systems with serial numbers and retirement are designed to prevent outright duplication of certificates. The harder cases involve claims that do not depend on the certificate at all.

The most common example is the owner of a renewable system who sells its RECs but still describes their electricity as renewable. The Wikipedia article cites economist Severin Borenstein of the Energy Institute at the University of California, Berkeley's Haas School of Business, who wrote in 2016 that once certificates are separated from electricity, the Federal Trade Commission considers it deceptive for the system owner to describe the electricity as "clean," "renewable" or "solar."

The FTC's Green Guides, revised in 2012, address this directly. They state that if a marketer generates renewable electricity but sells renewable energy certificates for all of it, it would be deceptive for the marketer to represent, directly or by implication, that it uses renewable energy. The guides use the example of a manufacturer with rooftop solar that advertises itself as solar-powered while selling the RECs. In 2015 FTC staff sent a letter to Vermont utility Green Mountain Power cautioning against unqualified renewable claims in that context.

The Wikipedia article also notes criticism that double counting at the level of whole states can make reported emissions look lower than they are, and that when attributes are stripped from renewable power and sold elsewhere, the remaining "null" power can obscure the true emissions of a region's supply. Those specific claims are flagged as needing citations in the Wikipedia article, so they are best treated as arguments rather than established findings.

Geography and time

A REC from a wind farm in one part of the country can be retired by a company whose facilities are on a different grid, with very different power plants. The certificate says the company "used" renewable power, but physically its facilities ran on whatever was locally available.

A related issue is time. Annual matching lets a company count, for example, solar RECs produced at noon in spring against electricity it used at night in winter, when the local grid might be running mostly on fossil fuel.

These concerns are now central to the debate over corporate accounting rules. In October 2025 the GHG Protocol released proposed revisions to its Scope 2 guidance for public consultation, including requirements for hourly matching and for "deliverability," meaning the renewable generation should be in a location from which it could physically serve the buyer. The GHG Protocol's own description says hourly matching with deliverability improves the accuracy of scope 2 inventories. Commentary on the consultation reported strong opposition from many industry groups and companies, especially to hourly matching, and final publication of a revised standard is expected in 2027. Until then, the 2015 guidance, with annual matching, remains the operative rule.

Fairness between states

The Wikipedia article raises another structural problem: state-by-state RPS markets can create equity issues. Because air pollution and carbon emissions cross state lines, states without mandatory targets may benefit from pollution reductions paid for by electricity customers in states with mandates.

Certification and verification

Green-e

Green-e Energy is the best-known voluntary certification in the U.S. market. Participants must undergo an annual verification audit of all eligible transactions, carried out by an independent certified public accountant or a certified internal auditor. CRS maintains a list of qualifying auditors. The audit checks that the renewable product sold to customers was backed by enough certificates of the right type, vintage and location, and that those certificates were retired on the customers' behalf. A Green-e summary of the GHG Protocol criteria says Green-e certified RECs meet all of the Scope 2 Quality Criteria.

What certification does and does not tell you

Certification is meant to confirm that what a buyer paid for actually exists and was not sold twice. It does not, by itself, answer the additionality question. A Green-e certified REC from an existing project is a real, uniquely counted certificate, but buying it does not necessarily cause new renewable capacity.

RECs compared with carbon offsets

People often confuse RECs with carbon offsets. They are different instruments. The EPA explains that an offset represents one metric ton of greenhouse gas emissions avoided or reduced, while a REC represents the attributes of 1 MWh of renewable generation. They have different qualification and crediting rules and cannot be swapped one for one.

A company that buys RECs can report lower market-based emissions from electricity. It cannot use RECs to cancel out emissions from, say, its truck fleet.

Who buys RECs

Historically, some of the largest buyers have been institutions with high public profiles. The Wikipedia article reports a 2007 snapshot from the EPA's Green Power Partnership: the EPA said it covered 100% of its offices' electricity that year; the U.S. Air Force was then the largest federal buyer, at 899,142 MWh of RECs; the University of Pennsylvania was the largest university buyer, at 192,727 MWh of wind RECs; Intel was the leading corporate buyer, at 1,302,040 MWh; and Whole Foods was the largest retail buyer, at 509,104 MWh, enough to match all of its electricity use. Those figures are now old, and the market has grown many times over, but they show the kinds of organizations that built the voluntary market.

Today, NREL's data show the voluntary market split between a small number of very large buyers using PPAs and unbundled RECs, and millions of households and small businesses buying through utility programs, competitive suppliers and community choice aggregators.

Common misconceptions

"Buying RECs means the electricity coming into my building is renewable." It does not. The physical electricity is the same as everyone else's on that grid. The REC gives you the right to claim renewable attributes for a quantity of generation that happened somewhere.

"RECs and offsets are the same thing." As shown above, they measure different things and serve different claims.

"If I have solar panels, I am using solar power no matter what." If you sell your RECs, under FTC guidance you should not represent that you use solar or renewable power. You are still consuming the electricity your panels produce, but someone else owns the right to call it renewable.

"A REC purchase always causes new renewable energy." Research on the voluntary market, including Gillenwater and colleagues, suggests that cheap unbundled RECs from existing projects have had little effect on investment. Long-term contracts tied to new projects are more likely to make a difference.

"There is one national REC registry." There is not. Certificates are tracked in regional and state systems, and eligibility differs by state.

"All RECs are worth about the same." Prices range from around a dollar per MWh for some voluntary certificates to hundreds of dollars for SRECs in a few state markets.

Practical guidance

For households

1. Check your bill and your utility's options. Many utilities offer green pricing programs. NREL counted about 1.25 million customers in such programs in 2022. Ask what is behind the product: Is it backed by RECs? From which state or region? Is it Green-e certified?
2. If you live in a community choice aggregation area or a deregulated retail market, compare products from competitive suppliers. Read the product content label, which typically lists sources and locations.
3. If you have or are getting rooftop solar, read the contract carefully. Find out who owns the RECs. Many leases and power purchase arrangements assign RECs to the solar company. If you own them and live in a state with an SREC market, they may be a source of income. If you sell them, be accurate about what you say regarding your home's power.
4. Recognize what you are buying. A cheap unbundled REC is a real, accounted-for certificate. It is also unlikely to change what gets built. If impact matters most to you, look for programs tied to new local projects, community solar or long-term contracts.

For organizations

1. Know which claim you want to make. Annual "100% renewable" claims under current GHG Protocol rules can be met with unbundled RECs. Claims about causing new renewable energy, or about matching consumption hour by hour, require more.
2. Prefer recent vintages and the same grid region where possible. These are likely to be more credible to stakeholders and may align better with future accounting rules, given the GHG Protocol's ongoing revision.
3. Retire certificates, and keep records. Make sure the certificates are retired in a tracking system on your behalf, and keep the retirement reports.
4. Avoid making renewable claims about facilities whose RECs you have sold. The FTC's Green Guides treat that as deceptive.
5. Consider PPAs or virtual PPAs if you are large enough. They are more complex and carry price risk, but they are widely regarded as having a stronger link to new construction.
6. Use third-party certification such as Green-e for unbundled purchases, so you can show an independent audit of what you bought.

The outlook

Two forces are shaping the next phase of the U.S. REC system.

The first is state policy. Berkeley Lab projects combined RPS and clean electricity standard demand rising from about 500 TWh to about 1,700 TWh by 2050, with roughly 900 TWh of new clean electricity needed after counting existing eligible supply. That would require building at roughly three times the historical pace of RPS-driven construction. Compliance markets will remain a major source of REC demand.

The second is the accounting debate. The GHG Protocol's consultation on hourly matching and deliverability could, if adopted, change what corporate buyers need and make simple annual unbundled REC purchases less useful for claims. The strength of industry opposition reported in commentary suggests the final rules may be a compromise, with some observers suggesting hourly matching might be kept as a voluntary practice, at least for a time. Either way, the trend in the debate is toward requiring a closer physical and temporal connection between the renewable generation a buyer claims and the electricity it consumes.

The REC will remain the basic unit. What is changing is how much detail on the certificate, about where and when the power was made, determines what a buyer can say about it.

Frequently asked questions

How much electricity does one REC represent? One megawatt-hour, which is 1,000 kilowatt-hours.

Who issues RECs? Regional and state tracking systems such as WREGIS, PJM-GATS, NEPOOL-GIS, ERCOT, M-RETS and NYGATS issue them based on metered generation from registered renewable facilities.

What does it mean to retire a REC? Retirement permanently removes a certificate from circulation in its tracking system so that it cannot be sold or claimed again. It is the step that supports a renewable energy claim.

What is the difference between a bundled and an unbundled REC? A bundled REC is sold together with the electricity it represents, often under a power purchase agreement. An unbundled REC is sold separately from the electricity, so the buyer of the certificate is not the buyer of the power.

What is an SREC? A solar renewable energy certificate, created by solar generation. In states with solar carve-outs in their portfolio standards, SRECs trade in separate markets and are often far more expensive than other RECs.

How many states have renewable portfolio standards? Berkeley Lab's 2024 report counted 29 states plus the District of Columbia with mandatory RPS policies, and 16 states with 100% clean electricity standards.

How cheap can RECs be? NREL reported that nationally sourced voluntary RECs were under $1 per MWh from about 2015 to 2020, and around $6.60 per MWh in August 2021. Compliance RECs and SRECs can be far more expensive.

Do RECs reduce emissions? It depends. RECs bought to meet state portfolio standards are part of policies that have driven a large share of renewable growth. Cheap unbundled RECs from existing projects bought on the voluntary market have been found, in at least some research covering 2004 to 2011, to have little or no effect on new investment.

Can a company with RECs say it uses 100% renewable electricity? Under the current GHG Protocol market-based method and the FTC's Green Guides, a company that retires enough qualifying RECs to match its consumption can make such a claim, as long as it does not make claims about facilities whose RECs it has sold. Whether that claim reflects real-world impact is a separate question.

Is a REC the same as a carbon offset? No. A REC represents 1 MWh of renewable generation; an offset represents one metric ton of greenhouse gas emissions reduced or avoided.

Who certifies RECs? The best-known voluntary certification is Green-e Energy, run by the Center for Resource Solutions since 1997. It requires annual independent audits of sellers.

Sources

• Renewable Energy Certificate (United States) - Wikipedia)
• Renewable Energy Certificates (RECs) - U.S. EPA Green Power Markets
• Status and Trends in the U.S. Voluntary Green Power Market: 2022 Data - NREL
• Status and Trends in the U.S. Voluntary Green Power Market (2021 Data) - NREL
• Berkeley Lab publishes status update on state clean electricity standards (2024)
• Berkeley Lab publishes status update on state clean electricity standards - CleanTechnica summary
• 2024 Green-e Verification Report (2023 Data) - Center for Resource Solutions
• GHG Protocol Scope 2 Guidance
• Upcoming Scope 2 public consultation: hourly matching and deliverability - GHG Protocol
• GHG Protocol Scope 2 Revision: stakeholder feedback - STX Group
• FTC Green Guides summary (2012)
• FTC staff letter to Green Mountain Power (2015)
• What you can say about RECs is regulated by the FTC - Green Building Law Update
• Double-Counting Virtue - Severin Borenstein, Energy Institute at Haas
• Gillenwater, Lu and Fischlein, Additionality of wind energy investments in the U.S. voluntary green power market (2014)
• How much electricity does an American home use? - U.S. EIA
• Energy in Iowa - Wikipedia
• Iowa Alternative Energy Law - DSIRE program listing