A Renewable Energy Credit (REC) certifies one megawatt-hour of renewable electricity generation. Buying and retiring RECs is the standard mechanism for claiming renewable energy use under the GHG Protocol market-based Scope 2 accounting framework. Voluntary RECs (purchased by commercial buyers for ESG goals) trade separately from compliance RECs (purchased by utilities for state mandates). Green-e certification verifies new renewable generation.
Voluntary vs compliance REC markets
Compliance RECs are purchased by utilities to meet state Renewable Portfolio Standards. The price is set by state-specific compliance markets and varies from $5 to $80 per MWh.
Voluntary RECs are purchased by commercial buyers for ESG goals. The price ranges from $1 to $15 per MWh depending on Green-e certification, generation vintage, and bundled vs unbundled.
Green-e certification matters
Green-e Energy is the gold standard for voluntary REC verification. Green-e certified RECs represent new renewable generation (built within the past 15 years) and are tracked to prevent double-counting.
Non-Green-e RECs may represent existing generation or have weak chain-of-custody. ESG buyers prioritize Green-e certified RECs for additionality and audit defensibility.
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