RECs explained. Deep Dive.
Renewable Energy Certificates are not a marketing tool. They are a recognized, market instrument used by businesses, governments, universities, and climate leading companies in the Fortune 500 to make verifiable clean energy claims. Here is a deep dive into how they work, including the parts others usually gloss over.
The Problem
This is the foundational fact that makes Renewable Energy Certificates necessary, and understanding it makes everything else click.
When electricity is generated and delivered to the transmission grid, it becomes physically indistinguishable from every other electron on the grid. Solar power from a farm and coal power from a plant are identical once they enter the same transmission lines. There is no technical mechanism to route clean electrons to clean energy customers and dirty electrons to everyone else. The grid does not work that way. It has never worked that way.
This creates a genuine problem for anyone who wants renewable energy and to make a credible claim about it. If you cannot distinguish clean electricity from dirty electricity on the grid, how does anyone, whether a homeowner, a corporation, or a government agency, legitimately know the source of energy?
The answer is a parallel tracking system that operates separately from the physical electricity. One that records what was generated, assigns ownership of that clean attribute, and prevents the same clean energy from being claimed by more than one party.
That system is the Renewable Energy Certificate.
The key point to carry forward:
The REC is not the electricity. It is the documented proof that clean electricity was generated and delivered to the grid, separately tracked, separately retired.
What is a REC?
A Renewable Energy Certificate is issued every time a renewable energy facility generates one megawatt-hour of electricity, that is 1,000 kilowatt-hours, and delivers it to the grid. Each certificate is not a generic credit. It is a specific, numbered record.
The key point to carry forward:
A REC is not a promise of future generation. It represents electricity that was generated and delivered. The certificate is the receipt or proof of zero emissions.
A fingerprint that exists once.
Each REC transaction is recorded against a unique identifier. No two certificates share a serial number. Ever.
The Lifecycle
A Renewable Energy Certificate passes through five distinct stages between the moment clean electricity is generated and the moment your dashboard reflects your share of that generation. Each stage is recorded. Each stage matters..
STAGE 01 — GENERATION
A renewable energy facility, whether a solar installation, a wind farm, or a hydroelectric plant, generates electricity and delivers it to the transmission grid. For every 1,000 kilowatt-hours generated and delivered, the tracking system issues one Renewable Energy Certificate.
At this moment, something important happens. The physical electricity and the certificate become two separate things. The electricity flows into the grid and immediately becomes indistinguishable from every other electron. The certificate enters the registry as a documented record of that generation.
This separation is the foundational concept. The certificate is not the electricity. It is the proof that the electricity was clean. From this point forward they travel separately.
STAGE 02 — ISSUANCE
The certificate enters a tracking registry with its full data record intact. It is now an official instrument, recognized by the U.S. Environmental Protection Agency, valid for use in state Renewable Portfolio Standard compliance programs, and accepted as the standard for voluntary clean energy claims across the private sector.
The certificate now exists as a trackable, tradable instrument. It can be bought and sold, but the moment it is retired, it is gone from circulation permanently.
STAGE 03 — ACQUISITION
Sustainable Choice monitors the collective demand by source and amount of our membership each month. Based on the total volume across all member plans for each source, we locate and secure the corresponding number of Renewable Energy Certificates from verified renewable energy projects in the registries.
This is an aggregate purchase. Individual member amounts are not tracked separately in the registry. The purchase is made at the membership level, and your share is calculated proportionally from your plan. This is how virtually every clean energy membership program operates. We say this not to minimize it, but to be transparent about it, because we believe you should understand exactly what you are participating in.
Example: If the membership collectively chooses 3,000 MWh of solar, 1,000 MWh of wind, and 500 kWh of hydro, we purchase and retire 3,000 solar RECs, 1,000 wind RECs, and 500 hydro RECs from verified, registered projects. Your dashboard reflects your calculated share of that retirement based on your plan
STAGE 04 — RETIREMENT
Retirement is the most consequential step in the lifecycle and the least understood. When Sustainable Choice retires Renewable Energy Certificates on behalf of our membership, those certificates are permanently removed from circulation. The tracking registry marks them as consumed. They cannot be resold. They cannot be transferred. They cannot be claimed by any other party. Ever. The retirement record is permanent and publicly logged in the registry.
This permanence is what makes a renewable energy claim legally credible. Without retirement, a certificate could theoretically be sold multiple times, allowing multiple parties to claim the same clean energy Retirement prevents that. The irreversibility is the point.
Sustainable Choice retires certificates on behalf of the collective membership. You do not currently receive an individually named certificate. What you receive is your proportional share of that retirement, reflected in your dashboard as real kilowatt-hours, real CO2 avoided, and real impact derived from real retirements. We are working to develop individually assigned certificates delivered directly to each member. That capability is not yet available. We will announce when it is.
The retirement happened. The records exist. Your share is real. The dashboard is your window into it.
STAGE 05 — ATTRIBUTION
Sustainable Choice dashboard updates monthly to reflect your share. The numbers you see, including kilowatt-hours supported, pounds of CO2 avoided, homes powered equivalent, and trees planted equivalent, are calculated from the actual volume of certificates. Not from marketing estimates.
Your plan determines your share. The retirements determine the total. The math is applied and the result is your dashboard. This is your record of participation in the clean energy economy. It is not a symbolic gesture. It is a calculated reflection of real electricity generated by real renewable energy facilities.
Your impact compounds month by month, as does the collective impact of the entire Sustainable Choice membership.
The Economics
To understand why RECs matter, it helps to understand something most people do not know about how traditional electricity markets work.
Electricity is bought and sold on price per kilowatt-hour or megawatt-hour (1,000 kWh). A megawatt-hour from a coal plant and a megawatt-hour from a solar installation compete on exactly the same terms in the wholesale market. The solar project gets no premium for producing zero emissions. The coal plant pays no penalty for producing pollution. The traditional electricity market, by design, does not recognize the environmental value of clean generation.
This creates a structural problem for renewable energy. The thing that makes it valuable, the fact that it produces electricity without burning fossil fuels, is invisible to the traditional market. These market dynamics determine whether a project gets financed and built. Renewable Energy Certificates exist to make that invisible value visible.
Benefit 1
REC revenue is a recognized income stream that improves a project's financial profile. Lenders and investors weigh projected REC revenue when evaluating viability.
Benefit 2
RECs are not only relevant to clean energy development. Older renewable facilities face ongoing economic pressure as equipment ages. REC revenue provides continued additional income that helps established projects remain operational and competitive, helping to keep clean electricity on the grid.
Benefit 3
The traditional electricity market never rewards a project for producing zero emissions. That environmental value is invisible. REC revenue specifically compensates renewable generation for being clean, and it flows exclusively to qualifying renewable sources.
The Asymmetry
When you purchase a Sustainable Choice membership, your dollars flow toward clean energy projects in a way that dollars spent on conventional electricity do not. Only verified renewable energy sources generate RECs, which means REC revenue is a financial advantage that belongs exclusively to clean energy. Every dollar that flows through the REC market is a dollar that could not have gone to a fossil fuel project instead.
Dirty energy does not get this benefit. That asymmetry is the point.
The Additionality Question
The additionality question, meaning whether any specific REC purchase caused any specific project to be built, is genuinely difficult to answer. Causality in energy markets is complex. But there is a cleaner way to think about it: the question is not whether your purchase caused a specific solar panel or wind turbine to be installed. The question is what the clean energy market looks like with strong REC demand versus without it.
Without a viable REC market, clean energy projects lose a revenue stream that fossil fuel projects never had to begin with. They lose a financial advantage. They lose the economic recognition of their zero-emissions generation. The playing field tilts further against them. Strong REC demand does not guarantee every clean energy project gets built. But it improves the economics of clean energy relative to dirty energy in a market that was never designed to reward it. In a transition that depends on incremental advantages compounding over time, that matters.
Not all RECs are the same
Renewable Energy Certificates track the source of generation. Solar, wind, hydro, biomass, landfill gas, and others all qualify under federal and most state definitions of renewable energy. This means a program can carry a green energy label, include combustion sources, and be doing so entirely within the rules.
Many utility green energy programs and competitive offerings do exactly that. Biomass, which involves burning organic material such as wood, agricultural waste, and dedicated energy crops, is a common inclusion. Solid waste combustion, sometimes called waste-to-energy, is another. Both generate RECs. Both qualify as renewable under most tracking standards.
Sustainable Choice does not source from either.
Every REC we purchase and retire on behalf of our membership comes from one of three sources: solar generation, wind generation, or hydroelectric generation. No combustion. No burning. No emissions from the energy production itself. When we say clean energy, we mean electricity generated without burning anything.
This is not a universal standard in the industry. It is a choice we made and a commitment we hold to. When you choose your Sustainable Choice plan, whether AllSolar, SolarWind, or HydroWind, you know exactly what you are supporting and what you are not.
Verification
Want to learn more about RECs? Here is a short collection of authorities for review.
U.S. Environmental Protection Agency
EPA's authoritative resource on the system of REC procurement, tracking, and retirement that makes clean energy claims credible.
Center for Resource Solutions
The leading independent certification standard for RECs in the voluntary market.
Major U.S. REC Registries
Western Renewable Energy Generation Information System (WREGIS): https://www.wregis.org/
PJM Generation Attributes Tracking Systems (PJM GATS): https://www.pjm-eis.com/
Midwest Renewable Energy Tracking System (M-RETS): https://www.mrets.org/
New England Power Pool Generation Information System (NEPOOL GIS): https://nepoolgis.com/
The Electric Reliability Council of Texas (ERCOT): https://sa.ercot.com/rec/home
World Resources Institute
Bottom Line on Renewable Energy Certificates: Fact Sheet
The Questions We Get Most Often
Yes. There are no installation requirements, no property modifications, and no landlord permissions needed. If you pay an electricity bill or want to match your household energy usage with clean generation, you are eligible. Renters, apartment dwellers, condo owners, and homeowners are all welcome.
No. Your electricity service stays exactly as it is. Sustainable Choice operates entirely separately from your utility, matching your usage with clean energy through the certificate system, not through your electricity delivery. Your utility bill, your provider, and your service are all unchanged.
Sustainable Choice purchases and retires RECs at the membership level. The aggregate choices of our entire membership determines the volume and type of clean energy we source and retire.Individual members do not currently receive individually assigned certificates.
Your proportional share of those retirements is reflected in your dashboard. We are working to develop individually assigned certificates that will be delivered directly to each member. We will announce that capability when it is ready.
No, while both are used to reduce carbon footprints, they are used for different purposes and are not interchangeable.
Renewable Energy Certificates (RECs) and carbon offsets are not the same; they are distinct tools for sustainability.
Key Differences
- Purpose: RECs fund renewable energy generation; offsets fund carbon reduction projects beyond electricity.
- Scope: RECs only address electricity usage, whereas offsets can cover broader emissions.
Compliance RECs are purchased by electric utilities to meet state Renewable Portfolio Standard requirements, which are legal mandates that a certain percentage of electricity sold must come from renewable sources. Voluntary RECs are purchased by individuals and organizations that choose to support clean energy beyond what is legally required. Sustainable Choice members participate in the voluntary market. We do not help utilities meet their legal requirements.
Ready to Participate?
No installation. No utility switch. Clean energy tracked and verified, starting today.