What Is The Difference Between Renewable Energy Certificates (RECs) And Carbon Credits?

1 megawatt-hour (1 MWh) = 1,000 kilowatt-hours (1,000 kWh)

A Renewable Energy Certificate (REC) is a certificate of ownership for one megawatt-hour (1 MWh) of electricity generated from a renewable energy resource (like a solar power plant, a wind turbine, etc.).

Renewable Energy Certificates (RECs) are a market-based instrument that certifies the bearer owns one megawatt-hour (1 MWh) of electricity generated from a renewable energy resource. Once the power provider has fed the energy into the grid, the REC received can then be sold on the open market as an energy commodity.

RECs can go by other names, including Green Tags, Tradable Renewable Certificates (TRCs), Renewable Electricity Certificates, or Renewable Energy Credits.

The difference between Renewable Energy Certificates and Carbon Credits

RECs and carbon credits are both measured in units of one megawatt-hour (1 MWh) of electricity.

An REC only certifies the renewable attribute of its associated electric generation. It does not quantify nor certify any created emissions reductions or offsets.

A Carbon credit (a.k.a. carbon offset) both quantifies and certifies the renewable attribute and emission reductions created through grid displacement of fossil-fuel based electricity.

You cannot use the same one megawatt-hour (1 MWh) to create both an REC and a carbon credit. This is to prevent double-counting.

However, you can start creating RECs after your carbon offset term ends and your system officially ceases creating emission reductions.

FURTHER READING
Investopedia: Renewable Energy Certificate (REC): Definition, Types, Example.

Carbon Offset Guide: Renewable energy certificates (RECs)

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