What are renewable energy credits?
For every kilowatt hour of electricity a renewable generator generates, it also generates a one-kilowatt hour renewable energy credit. The generator can sell both commodities together as “renewable electricity” or sell the electricity as “generic” electricity to one buyer and the RECs to other buyers. Legally, it’s all about who owns the RECs See a picture at the wholesale utility level See a picture at the retail household/business level Here’s a simple way to think about it. Let’s say your utility offered you the opportunity to pay a little more each month for wind power, and you did. From that point on, the electricity feeding your meter would be exactly the same as it was before you started buying wind power. That’s because all electricity is the same, and you can’t tell particular electrons to go to a particular house on the grid. So what do you get when you buy wind power from your utility? You get electricity from the mix of all sources feeding the grid, and “credit” for having
