Renewable Energy Credits - Understanding a Key Tool in the Transition to Renewable Energy and a Low Carbon Future

A policy primer completed by SDSG in January of 2020

RENEWABLE ENERGY CREDITS:
TOOLS IN TRACKING & TRADING FOR
RENEWABLE ENERGY TARGETS

The Renewable Energy Credit (RECs) market was developed as a way for states to show compliance with Renewable Energy Standards. This intangible market is a significant part of our utilities’ renewable energy planning but a little known concept for the lay person. This policy primer is designed to help explain what RECs are and how the REC market functions.

Below is a flow chart of Renewable Energy resources in 2012 and how those resources are utilized in the Renewable Energy Credit market. This data is from a time period when an overabundance of wind RECs drove down the price of RECs in the market and led to inexpensive RECs being banked for future use.