Renewable Energy Certificate (REC)
When a wind farm in Texas sends a megawatt-hour into the grid, two separate things are created. One is the electricity itself, which mixes indistinguishably with power from every other plant. The other is a certificate recording that this particular megawatt-hour was renewable — and that certificate can be sold to someone a thousand miles away who never touched the electrons.
That certificate is a renewable energy certificate. A renewable energy certificate (REC) is the North American instrument representing the environmental attributes of one megawatt-hour of renewable electricity — the proof behind a green-power claim, tradable on its own.
A renewable energy certificate (REC) represents the attributes of 1 MWh of renewable electricity delivered to a US or Canadian grid. One is issued per MWh, can be sold with or apart from the power, and is retired to make a claim — the US EAC for market-based Scope 2.
Definition — The Attribute, Not the Electron
A renewable energy certificate separates the environmental attributes of renewable generation — the fact that a megawatt-hour came from wind, solar, hydro, geothermal or biomass — from the physical electricity itself. Once power enters the grid it is fungible: no buyer can trace their supply back to a specific generator. The REC is the tradable proof that a given megawatt-hour of renewable energy was produced and delivered, and owning (and retiring) that certificate is what substantiates a claim to have used renewable electricity. “REC” is used interchangeably with “renewable energy credit”; both name the same instrument.
RECs are the North American energy attribute certificate. They are issued by regional tracking systems, one per megawatt-hour, and each carries data such as the generation source, vintage (the period of generation), and location. Like the EU’s guarantee of origin, a REC can be bundled with the electricity it came from or sold unbundled — traded entirely separately — which is what lets a company in one state buy the attributes of wind generated in another.
Definition at a glance
| What it is | A certificate representing the environmental attributes of 1 MWh of renewable electricity |
|---|---|
| Unit | One REC = 1 MWh generated and delivered to the grid |
| Also called | Renewable energy credit; “green tag”; solar RECs (SRECs) are the solar-specific subtype |
| Region | United States & Canada (the EU equivalent is the guarantee of origin) |
| Two markets | Compliance (state Renewable Portfolio Standards) and voluntary (often Green-e certified) |
| In accounting | The US energy attribute certificate for the market-based Scope 2 method |
Two REC Markets — Compliance and Voluntary
Unlike the EU’s single GO system, North American RECs live in two overlapping markets, and it matters which one a certificate comes from:
| Compliance RECs | Voluntary RECs | |
|---|---|---|
| Purpose | Meet a legal obligation | Voluntary green-power claims |
| Driver | State Renewable Portfolio Standards (RPS) — utilities must source a set share of renewables | Corporate and household choice; net-zero and RE100 targets |
| Quality mark | Defined by each state’s RPS rules | Often Green-e certified |
| Price | Set by the RPS market; can be substantial | Typically much lower for unbundled national RECs |
Some state RPS programmes include a solar carve-out served by solar RECs (SRECs) — a distinct, usually higher-value certificate for solar generation specifically. For corporate greenhouse-gas reporting, the voluntary market is the relevant one: a company retires voluntary RECs against its own electricity use to substantiate a market-based renewable claim.
How RECs Are Issued and Retired
RECs are created and tracked by regional electronic registries so that each megawatt-hour is counted once and only once. Major North American tracking systems include WREGIS (the West), M-RETS (the Midwest), PJM-GATS (the mid-Atlantic), NEPOOL-GIS (New England) and ERCOT (Texas). The lifecycle mirrors a guarantee of origin’s:
| Stage | What happens |
|---|---|
| 1. Issue | A tracking system issues one REC per MWh generated, tagged with source, vintage and location. |
| 2. Trade | The REC is sold bundled with its electricity or unbundled from it, and can change hands many times. |
| 3. Retire | To make a claim, the owner retires the REC in the registry. Retirement is permanent, so the same MWh cannot be claimed twice. |
The one-time-use rule enforced at retirement is what gives a REC its integrity: the “no double counting” principle that the whole certificate system depends on. A single megawatt-hour of renewable generation produces exactly one REC, and once it is retired against a claim it is gone.
RECs in GHG Accounting (Scope 2)
Under the GHG Protocol Scope 2 Guidance, purchased-electricity emissions are reported two ways. The location-based method uses the average grid emission factor for the region — in the US, the EPA eGRID factors. The market-based method uses the factor of the electricity the company specifically procured, and retired RECs are the instrument that substantiates that choice in North America. Retire renewable RECs against your consumption and the market-based figure for that electricity can be reported as close to zero; buy no certificates and you are assigned the residual mix.
Worked micro-example
A company consumes 5,000 MWh of grid electricity in the US over a year and reports Scope 2 both ways (eGRID national factor, snapshot):
- Location-based: 5,000 MWh × 0.350 t CO₂e/MWh = 1,750 t CO₂e (the US national grid average)
- Market-based, after retiring 5,000 renewable RECs: ≈ 0 t CO₂e for that electricity
Snapshot using the live US national grid factor of 0.350 kg CO₂e/kWh [GreenCalculus grid.usa.national.location_based · EPA EGRID 2023 'US23'!X3 · v2026.284] (eGRID, shown live). Both figures are reported — the GHG Protocol requires location-based and market-based side by side; RECs move only the market-based number. The renewable procurement calculator models this, and the Scope 2 electricity calculator runs both methods.
A REC proves that a megawatt-hour of renewable energy was generated — it does not prove that buying the certificate caused new renewable capacity to be built. Cheap, unbundled national RECs from existing generation can let a company report zero-carbon electricity without changing the grid. This “additionality” gap is why Green-e and frameworks like RE100 set quality criteria for acceptable certificates, and why a power purchase agreement that underwrites a specific new project is often regarded as higher-impact than unbundled RECs alone.
REC vs GO vs REGO — the EAC Family
A REC is the North American member of a global family of energy attribute certificates. Each does the same job — one certificate per MWh, tracking origin — under a different regional system, and they are not interchangeable across markets:
| Certificate | Region | Framework / body |
|---|---|---|
| REC | United States & Canada | Regional tracking systems; Green-e certification |
| Guarantee of Origin (GO) | EU & EEA | RED II Art 19; AIB EECS |
| REGO | United Kingdom | Ofgem |
| I-REC | Rest of world | International REC Standard (I-TRACK) |
“REC”, “guarantee of origin”, “REGO” and “I-REC” all describe the same underlying instrument — a 1 MWh energy attribute certificate — operating in different jurisdictions. If you report across regions, match each MWh to the certificate scheme of the market where the energy was consumed, and treat the four as siblings rather than substitutes.
Common Confusions
- Confusing a REC with a carbon offset. A REC represents 1 MWh of renewable electricity generation and is used for Scope 2; a carbon offset represents 1 tonne of CO₂e avoided or removed. They are different instruments with different units and uses.
- Thinking a REC delivers physical green power. It does not — grid electrons are fungible. A REC is a certificate for the origin attribute, tradable separately (unbundled) from the electricity.
- Assuming a REC lowers your location-based number. Retired RECs move only the market-based Scope 2 figure. The location-based number, based on the eGRID average, is unaffected and still reported.
- Mixing compliance and voluntary RECs. A REC already surrendered for a state RPS obligation cannot also back a voluntary corporate claim — that would double-count the same megawatt-hour.
- Equating a REC with additionality. A REC certifies origin, not that new capacity was added; unbundled RECs from existing plants do not by themselves build new renewables.
Frequently Asked Questions
A renewable energy certificate (REC) — also called a renewable energy credit — is the North American instrument that represents the environmental attributes of one megawatt-hour of renewable electricity delivered to the grid. Because grid electricity is fungible, the REC, not the electrons, is what proves a megawatt-hour was renewable. One REC is issued per MWh by a regional tracking system, can be sold bundled with the electricity or on its own (unbundled), and is “retired” when its owner uses it to make a renewable claim. RECs meet state Renewable Portfolio Standard obligations (compliance) or back voluntary green-power purchases.
They are the same type of instrument — a 1 MWh energy attribute certificate — under different regional systems. The REC is the North American certificate, issued through regional tracking systems and often Green-e certified. The guarantee of origin (GO) is the EU/EEA equivalent, defined by the Renewable Energy Directive and administered through the AIB. The UK’s post-Brexit version is the REGO, and the rest-of-world scheme is the I-REC. All track the origin of a megawatt-hour, but they are not interchangeable across markets: a claim should use the certificate valid where the energy was consumed.
No. A REC represents one megawatt-hour of renewable electricity generation and is used in the market-based method of Scope 2 reporting. A carbon offset (or credit) represents one tonne of CO₂e avoided or removed, and is used to compensate for emissions outside your inventory. They have different units (MWh versus tonnes CO₂e), different registries, and different roles: RECs substantiate a renewable-electricity claim inside your Scope 2 accounting, whereas offsets are applied after emissions are calculated. Using one where the other belongs is a common and material reporting error.
Under the GHG Protocol Scope 2 Guidance, a company reports purchased-electricity emissions two ways. The location-based method uses the average grid factor — in the US, EPA eGRID; the market-based method uses the factor of the electricity specifically procured. Retiring renewable RECs against your consumption is what substantiates the market-based choice, so the market-based figure for that electricity can be close to zero. A company that buys no certificates is assigned the residual mix instead. Both figures must be reported; RECs move only the market-based number.
Compliance RECs are used by utilities to meet a legal obligation — a state Renewable Portfolio Standard (RPS) that requires a set share of electricity to come from renewables. Voluntary RECs are bought by companies and households by choice, to back green-power claims and targets such as RE100, and are frequently Green-e certified. The two markets overlap but a single REC can only be used once: a certificate surrendered for RPS compliance cannot also support a voluntary corporate claim. Some states also run a solar carve-out served by solar RECs (SRECs), a higher-value certificate specific to solar generation.
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