Selling Renewable Energy Credits – An Interesting Market

Selling renewable energy credits has flourished into a new and interesting market. Here is some information to help you understand the details and regulations related to the emerging market of buying and selling renewable energy credits.

Renewable Energy Certificates (RECs) are often referred to as Green Tags, and/or Tradable Renewable Certificates (TRCs). RECs are symbolic of the energy resources that will never deplete and are safe for our environment. RECs refer to the environmental and economic value of electricity produced from clean, renewable, emission-free energy resources. It is not actual energy but is just a name for clean power, which has offset the production of dirty power.

Producers of green power should think of strategies for selling renewable energy credits and the power itself to increase their profits. RECs can be bought to satisfy regulatory requirements or to improve their corporate appearance. Organizations buying RECs have the right to claim environmental advantage.

RECs let energy users across the country support alternative energy generation. They contribute to the growth of the renewable power sector and support making alternative power extremely cost competitive.

In areas with REC programs, an alternative energy provider such as a wind farm gets credited with one REC for every 1,000 kWh or one MWh of electricity it produces. 800 kWh per month is the average residential customer usage capacity. Each REC is given a unique identification number by a certifying organization to ensure that it is not sold twice. The green energy is fed into the electricity grid by law and then the complementary REC is ready to be sold on the open market.

Tracking RECs is a very important aspect to buying and selling renewable energy credits.  Several certification and accounting associations ensure compliance and proper assignment and acknowledgment. Climate Neutral Network, Green-e, and the Environmental Resources Trust’s EcoPower Program are just a couple of the organizations that certify RECs. Start with one of these organizations or one of your local electric company if you are serious about selling renewable energy credits.

Compliance markets and voluntary markets are the two main markets for RECs in the United States.  Renewable Portfolio Standard (RPS) is the policy responsible for creating the compliance markets. This policy states that the electric companies have to supply a predetermined percent of their electricity from renewable sources in a particular year.

For instance, California electric companies are supposed to provide 20% of their energy from renewable sources by 2010. Electric utilities with RPSs in these areas become compliant by buying RECs.

The best way to help companies and property owners go green is to sell your RECs on the voluntary market. Voluntary markets give customers with a desire to go green a choice to purchase renewable power. Most of the RECs purchased by commercial and domestic buyers are voluntary. Alternative power providers have the option of selling their RECs to voluntary buyers at a lower price than compliance market RECs.

Detractors indentify a flaw with this system of selling renewable energy credits, which is that it does not necessarily replace dirty energy. The production of some alternate energy resources such as wind resources, due to its irregularity and unpredictability, does not replace an equivalent amount of other sources per kW of capacity, but they do replace electricity from combustion sources on a per kWh basis thereby reducing greenhouse gases and undesirable by-products.