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Renewable Energy Credits

This article provides with useful information about: Renewable Energy Credits
Renewable Energy Credits are intangible energy commodities used in America to prove that one megawatt hour of electric power has been generated from a qualifying renewable energy source. Renewable Energy Credits are often called Tradable Renewable Certificates (TRC), or Renewable Energy Certificates (REC). These energy credits can be traded or sold, and the holder can declare them as renewable energy purchases. Renewable Energy Credits offer incentives to industries that generate electricity from renewable sources.

How Renewable Energy Credits Work

Renewable Energy Credits are given an identification number that is unique so it cannot be counted more than once. Green energy is then distributed to the electrical grid, and the attached Renewable Energy Credit is sold. Wind farms and other green energy providers earn one Renewable Energy Credit for every one thousand hours of electricity that is produced.

Markets for Renewable Energy Credits - Compliance

The two primary markets for Renewable Energy Credits in the United States are compliance and voluntary. Compliance markets provide energy credits for electric and utility companies in various locations. The Renewable Portfolio Standard states that all utility companies must use renewable generators to supply a specific amount of the electricity they use by a certain year. Electric companies comply with these requirements when they purchase Renewable Energy Credits.

Markets for Renewable Energy Credits - Voluntary

Voluntary markets are for customers who want to purchase renewable power to use as renewable energy. Voluntary homeowners and corporate businesses can purchase Renewable Energy Credits at more affordable prices than the credits that are sold on compliance markets. Customers who purchase voluntary Renewable Energy Credits should make their purchases from generators that are in the compliance market.

Renewable Energy Credit Producers

There are a wide variety of generation technologies that produce Renewable Energy Credits. Some of the most commonly used are solar electric, geothermal, wind, and hydropower. Low impact, hydro-power facilities do not require reservoirs or large dams. States that use combined power and heat systems also qualify as producers of Renewable Energy Credits.

Renewable Credit Prices

The prices of renewable credits are determined by several key factors. These deciding factors include where the facility is located, the year the credits were generated, and whether or not there is a tight demand or supply for Renewable Energy Credits. Many states offer incentives such as low prices for contracts that last for twenty or more years. Consumer demand for Renewable Energy Credits has made them cost effective and readily available.

Many colleges, universities, federal agencies, and well known companies purchase Renewable Energy Credits to support green power. They are also purchased by the military, corporate companies that produce high technology products, and large retail food markets. These companies purchase huge amounts of Renewable Energy Credits each year primarily from wind power.

If you are interested in purchasing Renewable Energy Credits for your home or business, find out if your state supports the regulations set by the Renewable Portfolio Standard. These regulations are used to monitor the amount of energy that is being produced from renewable energy sources.