Today, it’s easier than ever to begin your journey toward living a more sustainable lifestyle, from ridding single-use plastics to using less water when you shower. But for most people, it starts with an investment in green energy. While installing solar panels on the roof of your home is a great investment, it’s not the only way you can harness the power of our sun.
Meet Renewable Energy Credits. These credits
(also referred to as Renewable Energy Certificates or RECs) ensure the
electricity you purchase is generated from green energy sources such as wind
power, solar and geothermal. If you want to power your home with renewable
energy, you should have a basic understanding of how RECs work, as they
represent the bulk of how renewable energy is purchased in the U.S.
In this article, we’ll explain:
To understand what a REC is, you need to
understand the energy grid. The “grid” is an umbrella term for our entire energy
network — the power plants, transmission stations, powerlines, wires, sensors
and poles. Unless you completely generate your own electricity, we’re all
connected to one another through the power grid. It’s how we receive the
electricity that powers our lives.
Why it matters: Be it fossil fuels, renewables or nuclear power, these sources of energy all generate electricity. Electricity enters the grid from all of these different sources. So, once it reaches your house, it’s virtually impossible to tell whether your electricity comes from traditional or green energy. This is where RECs enter the picture.
RECs solve the issue of wondering about the
source of your electricity. A REC is a sellable, tradable and barterable legal
instrument that represents the environmental benefits of renewably generated
electricity.1 So, whoever owns these certificates (which comes with
purchasing electricity) gets to claim that the power they purchased comes from
renewable sources.
Specifically, electricity that’s added to the
grid CANNOT be considered renewable unless
it has a REC to substantiate its environmental benefits. Because of this
fact, RECs are the currency of all renewable energy on the market today.
RECs are created from any of the following
renewable energy sources:
Since Chariot is a solar energy company, let’s
use a solar farm as an example:
To be considered a REC, the green energy
created on that solar farm must be sold and added to the grid. This means if
you have solar panels generating electricity for your home, you aren’t creating
RECs unless you add it to the grid. This is why the energy grid plays such a
key role in the creation of RECs.
Each certificate is unique in that once it is
sold, it cannot be used again. It’s considered to be “retired.”
RECs are the basis of all green and renewable energy plans, even ours at Chariot Energy! When you enroll in a renewable energy plan, or even a partial renewable plan, your Retail Electricity Provider (REP) trades and buys RECs on your behalf to ensure you’re doing your part to contribute to the green economy. Pretty cool, right? You can actually see the percentage of renewable energy you’re purchasing on your Electricity Facts Label (EFL).
Businesses also tap into the green power market and substantiate your commitment to the environment via RECs. The two most popular methods are:
While having solar panels on your home is an excellent idea, that sort of renewable energy system isn’t a financially feasible option for most people — not yet, at least. RECs are an easy way for people who want to make a difference to have a positive impact on the world. Specifically, RECs help you:
Certain states employ a concept called a
Renewable Portfolio Standard. This mandate requires states to not only prove a
certain percentage of power sourced by renewables, but also by solar
specifically. Also known as a “solar carve out, ” it refers to states having to
“carve out” or designate a particular chunk of its energy portfolio for solar
electricity generation.2
That’s why solar energy, in particular, has
its own kind of certificate. In fact, these are the certificates Chariot
trades! SCRECs serve to differentiate solar from the rest of the renewable
energy crowd.
However, RECs and SCRECs represent only one slice
of the larger clean energy pie. Consumers and businesses also cut their carbon
footprint through Voluntary Emission Reductions, more commonly known as “carbon
offsets.”
RECs and carbon offsets are quite similar, but
rather than determining the number of kilowatt-hours produced, carbon offsets
are measured and sold by the tons of greenhouse gas emissions avoided. So,
while they accomplish much of the same outcome (i.e. reducing CO2
emissions), their goals and reasons for existence are fundamentally different.
Still, many people often confuse them, which is why it’s worth explaining their
differences.
Offsetting carbon involves specific activities
that reduce, capture or store carbon emissions such as planting trees. Trees
capture and store carbon in the earth, which reduces the amount of CO2
in the atmosphere. When you purchase a REC, you’re buying green power that
produces no emissions or pollution – not just offsetting or avoiding the
emissions you’re generating.
Now that you have a greater understanding of
how clean energy works in the U.S., you are able to make more informed
decisions when it comes to purchasing your next electricity plan.
No longer do you have to settle for brown
power from fossil fuels. Today, with the use of RECs, you can truly know the
energy you are purchasing is green, emission-free, and won’t dirty the
environment.
Are you ready to make the switch? Contact Chariot Energy today and compare the options you have in your area.
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