California Renewable Energy Credits – For Dummies
This is a quick reference guide on California Renewable Energy Credits (RECs). For more in-depth education, visit our Knowledge Center.
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One Renewable Energy Certificate (REC) represents the positive environmental attributes from one megawatt-hour (or 1,000 kWh) of renewable energy generation. The California Energy Commission recently described RECs this way:
.“When electricity is generated using an eligible renewable energy resource, two commodities are created. The first commodity is the electricity, and the second is the renewable energy credits representing the non-energy, environmental attributes associated with the electricity”
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There are two types of REC buyers: voluntary and compliance. Voluntary buyers are progressive organizations like Whole Foods, Intel, and PepsiCo. By purchasing the rights to green power in the form of RECs, these organizations can offset their dirty energy consumption and further support the development of the renewable energy industry.
Compliance buyers of RECs are electric utility companies or energy suppliers, who are required by law to purchase a certain percentage of their energy from renewable sources. This requirement is known as a Renewable Portfolio Standard (RPS). Currently about 30 states have some form of an RPS requirement. California recently approved one of the most aggressive RPS mandates in the country requiring utilities to get 33% of their energy from renewable sources by 2020.
Compliance REC Market
RECs have not started trading quite yet for the California RPS market. We are waiting on a key piece of policy that will allow Distributed Generation (i.e. residential and commercial solar) facilities to sell their RECs into an RPS market. The California Energy Commission (CEC) is expected to approve and implement this eligibility ruling in January of 2012.
In order participate and sell your RECs for income, you must register your system with WREGIS (Western Renewable Energy Generation Information Systems) and get certified by the CEC. The Leaf Exchange provides a simple way for residential and commercial solar system owners to get educated, get registered, and get paid for their Renewable Energy Certificates.
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Learn how this process works ====>
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