You already know about the types of solar panels, and maybe you have installed one too. But do you know you can enjoy the beneficial green energy or electricity generated by renewable resources without installing a solar panel system? I guess you were not aware of this. However, those who have heard about energy certificates consider it a thing that only corporations and big organizations can acquire. But you are also on the list to enjoy the benefits. How? Well, before that, get to know what is renewable energy certificate. Along with its purpose, significance, pros, cons, and issuing authority, you will learn how to get REC.
What is Renewable Energy Certificate?
Abbreviated as REC, a renewable energy certificate is a type of Energy Attributed Certificate (EAC). It represents environmental attributes of the generation of 1 megawatt-hour (MWh) of energy that renewable resources produce. This certificate is like a reliable claim of how much renewable energy resources are used.
Several data attributes included in a renewable energy certificate are as follows:
- Certificate (generation) vintage
- Certificate data
- Certificate type
- Certificate unique identification number
- Eligibility for certification or renewable portfolio standard (RPS)
- Emissions rate of the renewable resource
- Nameplate capacity of project
- Project name
- Project vintage (build date)
- Renewable facility location
- Renewable fuel type
- Tracking system ID
- Utility to which the project is interconnected
Note: The list mentioned is subject to change depending on the market and authorities associated with issuing the REC.
What is Renewable Energy Certificate? How REC Works?
A renewable energy certificate is also termed as renewable energy credit. Energy generated by a renewable resource is generally represented by this certificate. A renewable energy certificate is used for all resources, including solar, water, and wind.
Working with renewable energy certificates and renewable energy credits
The certificate enables the buyer to make a reliable claim but does not provide the privilege to buy back energy produced by his unit. After the production of renewable energy, it is transferred to the local power grid. Then REC or renewable energy credits are used as they act as tradable instruments.
- REC gives the right to the owner to claim renewable energy use from a specific source.
- One REC is for every megawatt-hour of electricity generated from renewable resources.
- Each REC has a unique identity and data that tell where the energy was produced and by which source.
- Once the owner uses a REC to claim the energy, it becomes obsolete and cannot be used as a tradable asset again.
- Another REC is issued, and the cycle continues.
What is the Purpose Of REC? What is the Significance of REC?
The purpose of REC or renewable energy credits is to distinguish between renewable and non-renewable resources. This was created so that buyers can easily distinguish between the energy generated by renewable resources. It is also significant for accounting and assigning ownership to the attributes of the generation of renewable electricity and its uses.
Renewable energy certificates are significant in the following ways:
- It enables states to succeed in geographical restrictions on the potential of renewable resources and assists them in meeting administrative requirements.
- Electricity components are separated from the environmental characteristics of power generated by renewable resources.
- The certificate encourages power generation by renewable resources even beyond the state limit issued by RPO.
What are Renewable Energy Certificates Pros and Cons?
Your journey does not stop with what is renewable energy certificate. Renewable energy certificates and renewable energy credits enable you to choose green energy with it, and you can consider it as a currency for green energy. However, despite its benefits, it has some disadvantages too. Take a look.
- You can use renewable energy without actually installing solar panel systems.
- It supports the renewable market and encourages more and more people to turn to renewable resources for energy production.
- You get the liberty to choose whether you want to purchase REC from the government or local providers.
- Gives you a chance to reduce your carbon footprint and contribute towards the betterment of nature and climate. With this your contribution to pollution also reduces.
- You become a face of encouragement to the community and people will be encouraged to use renewable energy through this cost-effective method.
- You can promote your commitment or the commitment of your company toward renewable energy.
- Also, with renewable energy certificate arbitrage, you get benefits like cost reduction in the usage of renewable electricity. Along with reliable claims regarding the substantial use of renewable electricity with a reduced carbon footprint.
The major disadvantage or drawback of this system is the authenticity of the energy that you are receiving. Sometimes, the energy you are buying may not be green energy. Also, there is no savings or revenue stream under this method. And all this gives it a questionable environmental impact.
Note: The scenario is assumption and estimate based and not targeted to any specific country, organization, or firm.
Who Issues Renewable Energy Certificates in India?
Renewable energy certificates (REC) are issued by the Central Electricity Regulatory Commission (CERC). If you are looking for the certificate in India, you have to follow the process:
1. Eligibility criteria: Have a metered facility with a minimum production capacity of 250 kW. Producers do not enjoy any benefits or concessions. What is the renewable energy certificate value if you are already enjoying subsidies?
2. Accreditation: If you are eligible, then apply for accreditation and register with the National Load Dispatch Centre (NLDC), the national agency for this.
3. REC: Once you are registered, you can obtain REC for every megawatt-hour (MWh) of energy. Details regarding energy generation are provided by the State Load Dispatch Centre (SLDC) to the national agency.
Note: The entire process is handled online, and you can do the same at the REC Registry website.
Who Needs REC?
A REC is issued to entities generating electricity from renewable resources. Individuals and corporations both need renewable energy certificates voluntarily. The certificate is the green attribute allowing organizations, companies, and you to offset the carbon footprint, that too without investing huge amounts in generation facilities. It is a better way to go green.
How to Get REC?
Four common ways through which corporations get REC are:
1. Energy Supplier Options (Green Power Programs or Green Tariffs)
Various electricity providers and suppliers are offering ways to procure renewable energy and issue REC in return. Green power (green pricing) programs and green tariffs are included in this scheme. The former is a short-term contract and the latter is a long term.
a) Green power or green pricing: In this program, you are charged a premium for every kilowatt-hour of energy you purchase. This is shown as a line on your utility bill. Also, you get a monthly package of a set amount of energy that will be charged on a cent per kilowatt-hour basis. REC is acquired by the company and retired on your behalf, and this is proportionate to the amount of green power purchased by you.
- Community Choice Aggregation: Under this program, the government procures electricity on behalf of the customer along with choosing the utility provider. Energy is sourced either from PPA or bundled REC is purchased and passed on to customers. It is useful to learn about various methods to acquire REC after getting knowledge about what is renewable energy certificates.
- Competitive Suppliers: Under this method, you can purchase electricity from a provider in your region. Such suppliers are known as competitive suppliers, and you have to pay for the energy used through monthly utility bills. REC is received by the corporation but at a premium price.
b) Green Tariff: It is like a long-term contract with the utility company and is also known as sleeved PPA. To acquire REC your company needs to enter into a contract with the utility company. The duration of the agreement is usually 3 to 7 years. This results in the addition of a new project to the grid without you negotiating your own PPA.
2. Power Purchase Agreements
It is a long-term contract and acts like an agreement between a renewable energy project developer and a corporation that usually lasts for 10–20 years. Two types of PPA are virtual and physical. Overall, for every megawatt-hour (MWh) of energy sold by a developer, he will receive a fixed price up to a certain number of megawatt-hours.
You can get a PPA only in certain locations of the country, but REC received through PPA can be used by companies throughout the country.
3. Purchasing Unbundled RECs
Such REC is not tied to a power purchasing agreement. It can be purchased from REC retailers this is why this is the most flexible one. Corporations can buy this REC in one area of a country and put it to use in other areas of the country.
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It is an on-site system selling and transmitting power to the grid. Even when electrons are not flowing directly to your outlets, you still have the bill. And once the on-site system is registered, REC will be issued for every megawatt-hour of power it generates. However, if you use REC for your energy requirements, they will retire after one use. But you can apply for another REC since your system is generating more power than you use.
So, what is renewable energy certificate? The answer to this is the reliable claim that shows your commitment and efforts towards nature by reducing your carbon footprint. Well, now you know who needs REC. It is for everyone and not just companies. Also, from the various methods mentioned on how to get REC which one is applicable in your region? What are your reviews of that method?
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