What are Renewable Energy Certificates (REC)s?
As a solar power generator you are producing power from a renewable energy source — the sun – which benefits the nation by reducing our reliance on non-renewable sources such as fossil fuels. State governments quantify those benefits in the form of Renewable Energy Certificates (REC). One megawatt hour of energy from a renewable source generator equals one REC. The RECs are part of an incentive program enacted by many states, including New Jersey, Pennsylvania, Delaware, and Maryland, to encourage the development of renewable source energy suppliers. Under this program, each state enacted Renewable Portfolio Standards (RPS)s which set the minimum percentage of a utility company’s power that must be produced from renewable sources. Because there is not enough renewable source suppliers from which the utility companies can buy power directly, they are allowed to buy RECs on the wholesale electricity market to make up the difference needed to satisfy state requirements. Although there is
