Renewable Energy Certificate - REC

AAA

DEFINITION of 'Renewable Energy Certificate - REC'

A certificate that is proof that one megawatt-hour (MWh) of electricity was generated from a renewable energy resource. Once the electricity provider has fed the electricity into the grid, the Renewable Energy Certificate (REC) they received can then be sold on the open market as a commodity. Because of the additional cost for producing "green" energy, the RECs provide an additional income stream to the energy provider, thus making it a bit more attractive to produce.

Also known as Green Tags, Tradable Renewable Certificates (TRCs), and Renewable Energy Credits.

INVESTOPEDIA EXPLAINS 'Renewable Energy Certificate - REC'

There is no national registry of RECs, however the multiple issuing firms work together to ensure continuity of requirements. As of 2008, the "green" technologies for producing electricity are:

  • Solar
  • Geothermal
  • No Dam Hydro
  • Wind
  • Bio Fuels (Mass and Diesel)
  • Hydrogen Fuel Cell
RELATED TERMS
  1. Advanced Technology Vehicle Manufacturing ...

    A U.S. Government subsidy created under section 136 of the Energy ...
  2. American Clean Energy And Security ...

    A piece of legislation that was created in an attempt to establish ...
  3. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
  4. Renewable Resource

    A substance of economic value that can be replaced or replenished ...
  5. Nonrenewable Resource

    A resource of economic value that cannot be readily replaced ...
  6. Commodity

    1. A basic good used in commerce that is interchangeable with ...
Related Articles
  1. Insurance

    Green Investors Get Heard

    Find out how to make your portfolio and the companies in it greener.
  2. Mutual Funds & ETFs

    Evaluating Green Equity Investments

    Learn how to find stocks that are both eco-friendly and profitable.
  3. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  4. Personal Finance

    Go Green With Socially Responsible Investing

    Find out how morals and ethics can bring you a surprising return.
  5. Economics

    What Does It Mean To Be Green?

    Green investing is the new buzz word for companies and investors. Find out what it means.
  6. Options & Futures

    Top 10 Green Industries

    Put a little green in your wallet by investing in these growing areas.
  7. Options & Futures

    The Biofuels Debate Heats Up

    Interest in these new energy sources is growing. Should you buy in?
  8. Investing

    What is socially responsible investing?

    In the financial world, where profit and return are often the priorities of the average investor, the vehicles we use to reach our monetary goals can be overlooked. We know that mutual funds ...
  9. Investing

    What are cleantech stocks?

    Clean technology, commonly referred to as cleantech, is a term used to describe environmentally-friendly technologies that work to improve a company's operations, performance, productivity and ...
  10. Personal Finance

    Building Green For Your House And Wallet

    The earth-smart money is on these environmentally friendly housing projects.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center