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A renewable energy certificate (REC) represents the non-power attributes of one megawatt-hour (MWh) of renewable electricity generated and delivered to the grid. In the United States, it is the accounting instrument that carries the associated renewable-energy claim rights. Buying an unbundled REC does not send renewable electricity directly to your home or business.
What does a REC represent?
The U.S. Environmental Protection Agency (EPA) defines a REC as a market-based instrument representing the property rights to the environmental, social, and other non-power attributes of renewable electricity generation. One REC corresponds to one MWh of qualifying renewable generation, or 1,000 kilowatt-hours (kWh). EPA’s REC definition and its retail REC guidance describe this unit and its role.
The generator delivers electricity to the shared grid, where power from many sources is pooled. A REC is separate from that physical electricity: it records renewable attributes and assigns the associated claim rights. The grid connection alone does not tell a customer which source generated the electricity delivered to their outlet.
How do RECs work?
- Generation: A qualifying renewable facility generates electricity and delivers it to the grid.
- Issuance: A REC is issued for each MWh of qualifying generation. It records attributes such as the resource type, facility location, generation period, and project information.
- Transfer: The certificate can be transferred between account holders, with ownership recorded through a tracking system or documented along a contract path.
- Retirement: The owner retires the REC to use its attributes for a renewable-electricity claim. Retirement prevents that certificate from being transferred for another claim.
EPA’s overview of energy attribute tracking systems explains how tracking systems assign unique identifiers and record ownership and transfers. Tracking and retail certification are different: tracking records instruments and transactions, while third-party certification can independently audit a retail product and the quantity it represents.
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Does buying a REC mean your electricity is renewable?
It depends on the offer. A bundled green-power offer combines electricity supply with the RECs that support its renewable attributes. An unbundled REC is bought separately from electricity, so you continue receiving electricity through your ordinary supplier. The unbundled purchase supports a market-based accounting claim; it does not physically route power from the renewable generator to your home.
EPA says retail RECs may be sourced nationally and purchased for a performance period, commonly 12 months. Check the offer’s stated coverage rather than assuming that a purchase covers all of your electricity use.
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How to compare retail REC offers
Compare the terms that determine what the certificate represents and what claim you can make. EPA notes that restricting an offer to a particular location or resource mix can narrow supply and increase its price; no current price is established here.
- Bundled or unbundled: Is electricity supply included, or are you buying certificates separately?
- Resource type and mix: Does the offer specify wind, solar, or another resource, or a stated mix?
- Generation period: What vintage of generation does the REC cover, and does it align with the period you want to claim?
- Project location and market: Where was the electricity generated, and is that market appropriate for the claim you intend to make?
- Tracking and certification: Is ownership recorded in a tracking system? Has an independent certifier checked the retail product and quantity?
- Ownership and retirement: Who owns the certificates, who retires them, and what documentation will you receive?
- Claim scope: Does the quantity cover all or only part of your electricity use?
EPA’s retail REC guidance explains these purchasing considerations. Its FAQ discusses voluntary and compliance markets and identifies Green-e’s North American scope. Certification is useful to evaluate as one element of an offer; it is not the same as the tracking system that records certificate ownership.
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Are RECs the same as carbon offsets?
No. A REC represents the attributes of one MWh of renewable electricity generation. A carbon offset represents a metric ton of emissions avoided or reduced. They use different units and have different purposes and qualification criteria. A REC is not a carbon offset, and purchasing one does not by itself establish a specific quantity of avoided emissions.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What renewable-energy claims can a REC support?
EPA says a renewable-electricity claim depends on ownership of the associated energy attributes. Organizations should retire the supporting RECs, limit claims to the purchase’s scope, and ensure the claim matches the resource and market. EPA’s credible-claims guidance and its environmental-claims guidance explain these boundaries.
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Owning or hosting an on-site renewable system does not guarantee the right to claim its renewable attributes if the associated RECs have been sold. EPA also cautions that REC ownership does not establish a unique claim to regional grid operations or emissions impacts, and that a REC purchase alone should not be presented as proof of additionality or as reducing total emissions to the atmosphere.
The Federal Trade Commission’s Green Guides summary, dated October 2012, says marketers who generate renewable energy but sell all the associated RECs should not claim that they “use” renewable energy. See the FTC summary of the Green Guides. The page is dated 2012; businesses making current marketing claims should consult current legal guidance.
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