In Focus: Renewable Energy Credits 0

Sometimes it pays to be bad; Bonnie and Clyde, Jesse James, and Al Capone wouldn’t have been famous otherwise.

However, when it comes to stealing from the environment, that’s not always the case. In fact, thanks to renewable energy credits, it is just the opposite.

Renewable energy credits, or REC, are an energy market innovation designed to bolster the creation, generation, and distribution of electricity emanating from renewable sources. Essentially RECs provide renewable energy generators a secondary source of income along with the electricity they produce.

Let me explain:

For an example, consider an individual who owns a patch of solar cells in California. These solar cells generate electricity when the sun is out, and this electricity is measured in kilowatt-hours (kWh). However, because this is a renewable energy source, it is also generating a renewable energy credit.

Because all electricity is the same (just flow of electrons), it is in fact the REC that differentiates ‘clean’ from ‘dirty’ electricity.

What does this mean?

Well, for markets that have a mandated renewable energy portfolio, it means that renewable energy credits can be sold, independent of the electricity, to the states, companies, or organization in need of green, clean energy. As an example, if the state of New York did not meet its required renewable energy quota, it could fill the gap by purchasing RECs from a solar farmer in Nevada.

Thus the solar farmer benefits from both the electricity he produces and the REC it subsequently generates.

It is important to note that once electricity has been severed from its source and associated REC, it is no longer considered ‘green’. Without the REC, electricity is the same, no matter where it came from.

At its core, RECs are still a market experiment. They are constantly being refined and altered to accurately compensate the energy generator. It should be noted that this is a topic of great political debate since the market price of RECs often reflects the prominence of a renewable energy portfolio.

A great resource to get further briefed on RECs is the EPA website listed below:
www.epa.gov/greenpower/gpmarket/rec.htm
If you are interested in purchasing or selling RECs, EnergyGridIQ is the perfect forum to do so. By connecting users on both a production and consumption side through an incentive rich databse, EnergyGridIQ allows the renewable energy credit sellers to contact the renewable energy credit consumers no matter where the market.

Check out EnergyGridIQs project page for more details.

Original Article on EnergyGridIQ

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