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. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  4. Emissions Reduction Purchase Agreement ...

    A transaction that transfers carbon credits between two parties ...
  5. Carbon Credit

    A permit that allows the holder to emit one ton of carbon dioxide. ...
  6. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
Related Articles
  1. Green Investors Get Heard
    Insurance

    Green Investors Get Heard

  2. Evaluating Green Equity Investments
    Mutual Funds & ETFs

    Evaluating Green Equity Investments

  3. Clean Or Green Technology Investing
    Investing

    Clean Or Green Technology Investing

  4. Go Green With Socially Responsible Investing
    Personal Finance

    Go Green With Socially Responsible Investing

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center