Government mandates and corporate sustainability goals are increasing the demand for green initiatives. Renewable Energy Certificates (RECs) play a crucial role in helping companies reach their environmental targets.
With a growing number of businesses looking to cut down their environmental impact, it's important to understand how RECs work and what benefits they offer.
Let's explore the ins and outs of RECs and show how Pilot Energy can be a part of this eco-friendly solution.
How Renewable Energy Certificates Work
Each REC represents proof that a renewable energy source has produced one megawatt-hour (MWh) of electricity and fed it into the grid. These certificates are the currency of the renewable energy market, allowing businesses to claim and report that they are using renewable energy.
When renewable energy facilities generate electricity, they produce two separate entities: the physical electricity and the environmental attributes associated with that clean energy, which are encapsulated in RECs. RECs act as the market's way of identifying and trading these environmental benefits. For every MWh of electricity produced from a renewable source, a REC is issued.
This certificate carries details about the energy's production, such as the type of renewable resource used (e.g., wind or solar), the facility where it was generated, the date of generation, and a unique tracking ID. This makes RECs a tangible representation of the environmental qualities of renewable energy, separate from the electricity itself.
For the energy producers—say, a private solar farm or wind farm that sells its generated power to the grid—receiving a REC for every MWh of electricity sold is a form of recognition and financial return on their green investment.
The lifecycle of a REC doesn't end with its creation. There are regulatory tracking mechanisms for RECs to ensure their validity and prevent double counting.
Once a business or individual purchases a REC to offset their energy use and the energy is used, it is withdrawn or retired, meaning the buyer can claim those environmental benefits as their own, even if the actual green energy was produced elsewhere.
This offers companies a flexible, accessible way to meet their sustainability goals and support the growth of renewable energy.
The Benefits of Incorporating RECs into Corporate Sustainability Strategies
Renewable Energy Certificates present significant opportunities for businesses committed to sustainability practices, integrating smoothly with energy procurement processes and broader environmental goals.
Here's a breakdown of the benefits that RECs provide:
• RECs provide an accessible entry point for businesses of all sizes to meet their renewable goals and contribute to renewable energy adoption.
• Beyond being an initial step, RECs can help fill in the gaps to complete your sustainability efforts. After implementing efficiency measures and on-site renewables, RECs can go “the last mile” in achieving your environmental goals.
• Investing in RECs can boost a company's brand by highlighting a commitment to renewable energy and sustainability.
Practical Steps for Businesses Starting with Renewable Energy Certificates
For businesses ready to start using RECs, here are a few steps to begin:
• Determine how much energy you use and where it comes from. This will help quantify the volume of RECs you may seek to purchase.
• Decide what you want to achieve with RECs in terms of your broader renewable energy and sustainability business goals.
• Learn more about what you should ask of your energy advisor. Find the right energy procurement and management partner for you!
Pilot Energy As Your Partner In Energy Procurement
Founded in 2001, Pilot Energy is an unbiased and independent energy procurement advisor that empowers leaders to confidently know when, where, and how much energy to purchase by leveraging our unique blend of industry knowledge and innovative digital platforms. Putting our know-how to work daily, we drive clarity and control in decision-making and take pride in providing unparalleled personalized service. Guiding businesses with strategic innovation while committing to sustainable solutions.
Reach out today to learn how Renewable Energy Certificates can align with your business’s sustainability goals and help you make a meaningful impact.
