Renewable Energy Certificate (REC)

A Renewable Energy Certificate (REC) — sometimes called a Green Tag or Renewable Energy Credit — is a tradable certificate that represents proof that one megawatt-hour (MWh) of electricity was generated from a renewable energy source, such as solar, wind, or hydro.

When a solar system produces electricity, it actually creates two commodities:

1. The physical electricity that powers homes or businesses, and
2. The environmental attributes of that renewable generation — captured and tracked through RECs.

Each REC verifies that clean energy was produced and delivered to the grid. Businesses or organizations can sell their RECs to generate additional revenue, or “retire” them to claim the environmental benefits — for example, to meet corporate sustainability targets, achieve carbon neutrality, or comply with state renewable portfolio standards (RPS).

For commercial solar customers, RECs are a valuable way to monetize the environmental impact of their system and demonstrate measurable progress toward ESG or sustainability commitments.

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