Renewable Energy Certificates (RECs)

Renewable Energy Certificates (RECs) are tradable instruments that certify a given quantity of electricity has been generated from renewable sources. A REC is created when a clean generator feeds power into the grid, and it can be bought or sold separately from the underlying electricity, which is why RECs are sometimes called energy attribute certificates.

How RECs work

1. Generation: a solar, wind or other renewable plant injects electricity into the grid.
2. Issuance: one certificate is issued for every megawatt-hour (MWh) of renewable electricity generated.
3. Purchase and retirement: a buyer purchases the REC and retires it to claim consumption of that renewable MWh.
4. Registry tracking: a registry records issuance and retirement to prevent the same MWh being claimed twice.

Types by region

• Guarantees of Origin (GOs): the instrument used across the European Union.
• I-RECs: the International REC Standard, used in many markets worldwide.
• RECs / Green-e: the certificate and certification system used in the United States.

RECs and carbon reporting

RECs are central to market-based Scope 2 accounting under the GHG Protocol: by retiring certificates, a company can report the emissions associated with its purchased electricity using the factor of the renewable source it has contracted. This sits alongside the location-based method, which reflects the average grid mix. Many firms use RECs as part of their net-zero roadmaps and renewable-electricity targets such as RE100.

Criticisms and good practice

• Additionality: buying unbundled certificates does not necessarily cause new renewable capacity to be built; long-term power purchase agreements (PPAs) are seen as higher impact.
• Double counting: reliable registries and retirement are essential to integrity.
• Quality and locality: certificates matched to the same market and time as consumption are more credible.

RECs are a useful tool for supporting renewable generation and substantiating clean-electricity claims, provided they are used transparently. At Manglai we help companies measure their carbon footprint and account for renewable electricity correctly in their reporting. Discover how Manglai can help you.