Renewable Energy Certificate (REC)

A Renewable Energy Certificate (REC) is a market-based instrument that represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable energy source. RECs can be bought and sold separately from the physical electricity, allowing organizations to claim they are using renewable energy even if their electricity comes from the grid.

RECs are the backbone of the US renewable energy tracking system. When your solar system generates 1 MWh (1,000 kWh) of electricity, it creates one REC. The REC can be “retired” (claimed by you or your utility for renewable energy compliance) or sold on the open market. Solar-specific RECs are called SRECs and are typically more valuable than general RECs because some state Renewable Portfolio Standards require a specific amount of solar energy. General REC prices are relatively low ($1–$5 per MWh) because supply is abundant. SRECs in states with solar carve-outs can be worth $10–$300+ per MWh. For most residential solar homeowners in net metering states, the RECs are automatically transferred to the utility as part of the net metering agreement. In SREC markets, homeowners retain and sell their SRECs for additional income.