Five questions you should ask about Renewable Energy Credits (RECs)

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Renewable Energy Credits (RECs)

People are interested in reducing their impact and powering their homes, schools, businesses, and organizations, and local governments with wind and solar energy. One way they can do this is through the purchase of Renewable Energy Credits, or RECs, and companies sell them.

RECs can be confusing, so we thought we’d pose five key questions you should ask before buying.
 


1. How can I make sure the RECs are not double counted?

 

  • Ask whether the RECs are certified and verified by an independent organization. Tracking systems are not substitutes for third-party certification and verification, as tracking systems only monitor wholesale transactions. See also: Buy Certified-Verified Green Power (EPA).
    • The state tracks RECs only for utility programs.
    • Green-e is a voluntary independent organization that certifies RECs to the Green-e standard through annual audits. (Xcel WindSource is also Green-e certified)
       


2. Does the REC broker have a good service history?

 
Check BBB listings. For example, if the company is offering to pay your utility bills on your behalf, you’ll want to make sure they have a good record.
 


3. How does the price compare with green power provided by my utility?

 
Most utilities in Minnesota offer green power or green pricing programs. Click here to see a list of available programs. You should visit your electric utility’s website or ask them to learn more about their program so that you have a basis for comparison.

To offer an example, Xcel Energy’s WindSource program supplies subscribers with the “green” wind energy that is generated along with the REC. This means that WindSource customers don’t pay fossil fuel charges for the bundled RECs because that energy comes from a different pool of resources than the standard “house blend” of energy. From Xcel’s 2017 WindSource Product Content Label, the house blend is coal (29%), nuclear (30%), natural gas (16%), wind (15%), hydro (7%), biomass (3%), and solar (<1%). On average, factoring in the fuel cost credit, the price for WindSource in 2016 was about $0.01/kWh, which would cost the average Minnesota home that uses 800 kwh/month $8.
 


4. Where is the energy generated?

 
If you have preferences about how local your energy is, it could be nice to ask where the renewable energy sources that created the RECs are located.
 


5. When was the energy generated (i.e. what is the REC vintage)?

 
In Minnesota, RECs for utility programs are allowed to have a four-year shelf life to allow for economic procurement and to encourage early action. For Green-e certified products, the REC can be generated up to six months before or three months after the calendar year when the REC sale occurs.
 


Additional Resources

 


Get Answers blog series The Get Answers series on the Energy Stories Blog offers useful tips from CERTs and our partners to help you get to the bottom of your energy efficiency and renewable energy questions. Click here to see more stories in the series >>
 
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Minnesota Department of Commerce University of Minnesota Regional Sustainable Development Partnerships and Extension Great Plains Institute Southwest Regional Development Commission