Renewable Energy Credits, or RECs, represent the intangible environmental attributes of energy generated from renewable sources, like wind or solar, and delivered to the grid. A REC is issued for each megawatt-hour (1,000 kilowatt-hours) of renewable energy generated and delivered.
RECs are US instruments. (Their European equivalents are Guarantees of Origin, or GOs.) They are sold in two major markets:
- In many states, electric utilities are required to derive a minimum percentage of their electricity from renewable sources. RECs allow them to document that they've met those requirements. If they don't produce enough renewable electricity themselves, they can purchase RECs from other producers to fill the gap—buying the rights to the renewable aspects of energy.
- The voluntary market, where Cloverly lives, includes companies and individuals who want to offset their emissions. We buy RECs in order to move the world toward carbon neutrality.
In both markets, prices of RECs fluctuate according to supply and demand. Selling RECs creates an additional revenue stream for producers of renewable energy, making renewable energy projects more financially feasible.
For a current list of the offsets and RECs in Cloverly's portfolio and an interactive map showing their locations, go to our Offset Projects page.