Guide to Renewable Energy Credits

What the heck is a REC!?

You are probably already aware of the financial benefits and longterm savings you can enjoy by going solar. Protecting yourself from rising utility rates and investing in your economic future are two of the main reasons New England residents opt for a home solar PV system from ReVision Energy. 

However, many customers are excited to learn of an additional financial solar perk: selling solar Renewable Energy Credits. Also referred to as Renewable Energy Certificates or RECs, renewable energy certificates are a way to measure and track electricity generated by clean energy sources, such as solar, and assign monetary value to the energy produced. 

Both homeowners and businesses can buy and sell RECs, which is not the same as buying and selling electricity. Rather, RECs are a representation of your energy's intangible value that is a result of it being generated from a certified renewable energy source. 

While the world of RECs can be complicated and nuanced, most homeowners can easily set up the process and receive quarterly earnings from their RECs. Our team of solar experts can help you navigate the details and answer any questions you may have. Learn more about RECs in our guide below, which covers:

  1. What are RECs and how do they work?
  2. Why should you sell RECs? Why not?
  3. How to get started with RECs.

A Renewable Energy Certificate represents the intangible value of the clean energy you produce with your solar panels. Most of the New England states require utilities to acquire a certain percentage of their total electricity portfolio from renewable sources – called the Renewable Portfolio Standard (RPS). But since electricity follows the path of least resistance (like water), it’s generally impossible to know the source of any given electrons on the grid.

That’s where RECs come in. Renewable power generators (PV solar arrays, wind farms, etc.) are awarded 1 REC for every 1,000 kWh (1 MWH) of electricity they generate. States with stronger renewable portfolio standards typically have higher REC prices and RECs can be bought and sold throughout the New England ISO grid.

What’s the difference between RECs and credits I get on my utility bill?

RECs are completely separate from the kWh bill credits you receive on your bill from the flow of your solar electrons into the grid. Think of RECs as a bonus carbon certificate.

revision installed solar roof.jpegYour grid tied solar array will be net metered, meaning that anytime you produce more electricity than you’re using, that excess electricity flows back out to the grid and you receive a kWh credit that can be used against future consumption. This process of net metering is controlled by your local utility company.

RECs, on the other hand, represent the “green attributes” of the clean energy your solar array produces. Your grid-tied solar array will be net metered with or without selling RECs. 

Why should you sell your RECs?

new panels rooftop solar.jpegThere is no risk to selling your RECs. The REC market varies and the price you get for them will depend on their demand. You don’t risk losing any money selling your RECs, the worst case scenario is that you don’t make any money from them.

RECs are RECs across the country; however, the value granted by the REC might vary state to state. Most residential homeowners in New England make anywhere from $50-$500 a year selling their RECs. This comes in the form of a quarterly check that comes in the mail with really no effort on the seller’s behalf.

Why do some people opt not to sell RECs?

Some people don’t want to sell their RECs because they don't want someone else claiming the “green” attributes of their power generation. There are differing opinions to selling RECs; some see it as giving away the clean energy made to another market so that the buyer doesn’t have to invest in clean energy themselves, like a carbon trade.

What seems to be the majority opinion is that the REC market helps states to diversify their energy resources, promotes domestic energy production, and encourages economic development. The benefits of RECs extend to driving the market for wind, solar, and other renewable energy sources, as they provide a way to separately count and incentivize renewable energy; without RECs we would not be able to provide this extra incentive. If you want to delve deeper into this topic, check out our blog post on whether REC sales affect how "green" a solar project is.

outside inverter.pngAs a service to our customers, ReVision Energy’s default is to sign up all of our solar customers to sell their RECs. The process is simple and requires no action on your part. We design and install your solar project with an inverter has a revenue grade meter (like SolarEdge). Once your system is installed, we will send an email introducing you to Knollwood Energy, a third-party aggregator set up to sell RECs on your behalf, based on the data it receives from your inverter.

Knollwood takes a small fee (typically $5/REC) and passes the profits back to you. If you do not wish to sell your RECs, simply let your solar design specialist know and we will not sign you up. With our 20+ year experience in the industry, we believe Knollwood Energy offers our customers the best pricing and customer service for REC management. It takes less than 5 minutes to get set up and then your checks will arrive every 3 months with no action needed on your part. As always, please let our team know if you have any questions.