How RECs Support Green Energy

RECs give green energy a way to turn its environmental advantage into a competitive advantage. Click the image to see a larger version.

First, your REC purchase is a subsidy for green energy that gives it the economic boost necessary to compete in America’s energy market.

Second, your REC purchase is a powerful statement of your commitment to green energy and a cleaner environment. By voluntarily spending money to support your belief, you have “voted with your dollars.”

If enough individuals buy RECs, and let their representatives know about their purchases, it will send a clear message that America is ready to take the steps and make the sacrifices necessary to make green energy a reality. Right now, the general belief is that people care more about saving a few cents on their energy rate. Your REC purchase tells everyone that you are willing to spend more for a better world. When people back up their beliefs with their dollars, politicians listen.

When you buy Green-e® Energy certified RECs, you’re not just supporting green energy. You’re supporting new green energy. All RECs certified by Green-e Energy promote a concept called additionality.

If you read What the HEC Is a REC? you know that green energy can’t compete in most competitive markets. Even in unregulated markets, where utilities make the decisions about what new plants to build, green energy doesn’t make economic sense. But adding RECs to the mix changes the equation. Investors know they will be able to sell RECs in addition to their electricity, which gives them a better chance to compete. New green energy plants, which often have trouble making headway against more established providers, also get a leg up on the competition through their REC sales.

Additionality happens when voluntary purchasers buy up all the RECs within an RPS area. This forces utilities to sponsor new green energy in order to meet their requirements.

RECs which support additionality help convince investors to put their money into new green energy sites. And that helps green grow.

If enough individuals buy RECs, it may even be possible to use RECs as a way to force utilities to add more green energy to their grid. This can happen in any state or region where there is a Renewable Portfolio Standard. Remember, with an RPS, the utility is required to use a certain percentage of green energy, and it must buy RECs to prove that it has met the standard.

If there aren’t a lot of other buyers competing for these RECS, this is not a problem. But if enough individuals and businesses are buying RECs, this increases competition. This is particularly true in states where the RPS requires the utilities to buy RECs from within their own grid. If individual buyers buy up enough RECs, there won’t be enough left for the utilities to meet their standards. This could conceivably force the utilities to add more green power sources to their grids, and mix in more green powered electricity, to put more RECs on the market so it can buy the required number.

While this hasn’t happened yet, the individual market for RECs grows every day. And you shouldn’t underestimate what millions of people can do when each works individually towards the same goal.