Electric From Renewable Sources

RENEWABLE ENERGY CREDITS

If you’re starting to learn more about solar – or even if you’re well on your way to becoming a solar expert – Renewable Energy Credits (RECs) are one of those terms you’ll see get thrown around a lot that can cause a fair amount of confusion. At Sun Tribe, we’re committed to being a full energy partner, which means working with you to understand the entire energy landscape, so it’s important for us to set the record straight.

What is a REC?

The most common definition of a Renewable Energy Credit (REC) is deceptively simple: it’s a promise or guarantee that the electricity you’re using came from a renewable resource. But the most confusing thing about RECs is that they are intangible –– they are a concept –– and yet they can still be bought and sold like a physical good. So when you hear the term “RECs” think of them as the official certificate of authentication for renewable energy.

When electricity is generated by a renewable resource such as solar, that energy is added to the greater electrical grid. A further breakdown of how the grid functions in detail is a whole other lesson, so for our purposes here, you’ll just have to take our word for it: there is no way of differentiating the electricity made from renewables (like wind or solar) from energy that comes from other sources (like coal or natural gas). Like money in a bank, a record of how much you’ve deposited is kept but the individual dollar bills you deposit aren’t kept separate and they look identical to every other dollar bill in the vault. All that money is mixed together and redistributed every time someone makes a withdrawal from the bank. You can think of RECs as a powerful three-in-one: RECs are the official proof, currency, and record that the energy being used came from a renewable source.

How Do You Get RECs?

RECs are sold on SREC (Solar Renewable Energy Credit) markets, and traditionally, one REC is equal to one megawatt-hour of electricity. Again, understanding the full complexities of SREC markets would take some time, but the takeaway is this: thanks to sophisticated metering and interconnection equipment, we know exactly how much electricity is generated by every solar system we install, which allows us to accurately measure RECs for our partners. The question of whether to retain your RECs is a choice for each individual company or public sector entity considering installing a solar system, but the key is working with an experience solar provider that can help advise you on that decision.

Further complicating this picture is the use of RECs by utilities, which will often offer “products” for their customers which allow that customer’s energy to only come from “renewable” sources as part of a bundled program which will often have “REC” in the name. The challenge for customers is significant: not all of the energy sourced for these programs is local, clean, or new. Yet directly purchasing solar power from a provider like Sun Tribe (whether on-site or off-site) ensures that our partners know where their power is coming from.

Want to learn more about how Renewable Energy Credits (RECs) can impact your solar project?
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