renewable energy credits

RECs

For customers in certain parts of the country, the only way to buy green power may be to purchase Renewable Energy Credits (RECs).  A REC represents one megawatt-hour (MWh) of green energy produced and delivered into the power grid.  When a customer buys a REC, a customer is still supplied from their current electricity supplier, but their power is offset by the delivery of renewable electricity somewhere else on the grid in the quantity of RECs purchased.

RECs give business customers greater flexibility in buying green power, and typically allow businesses to specify a certain type of power (e.g. wind, solar, etc.), a customization that may not be possible under green supply.  RECs can also be used by businesses leasing space or which otherwise do not have control over choosing their electricity supply.  RECs also allow businesses to maintain existing relationships with their utility or electricity provider while still purchasing green energy.  Some of the drawbacks of RECs are that they do not provide a price hedge against fossil fuels, and may be complex to explain to the public when businesses share their sustainability plans.