Blog: What the REC? How Renewable Energy Credits Work

Renewable Energy Credits (RECs) are a system that helps to incentivize the generation of renewable energy by providing a market-based mechanism for trading and tracking the production of clean energy. Here’s how they work:

1. Renewable energy generation: A renewable energy generator, such as a solar farm, produces electricity from a renewable energy source (the sun).
2. Renewable energy credit creation: For every megawatt-hour (MWh) of electricity generated by the renewable energy source, one REC is created.
3. REC ownership: The renewable energy generator can sell the RECs to a third party, such as a utility or company that wants to offset its carbon emissions. The buyer of the RECs then owns the environmental attributes of the clean energy produced by the generator, while the generator retains ownership of the physical electricity. At Koulomb, we purchase RECs to offset all the energy produced by our chargers.
4. Retirement or use: The buyer of the RECs can retire them, which means they are permanently removed from the market, or use them to meet regulatory requirements, such as state renewable energy standards.
5. Trading and tracking: RECs are tracked and traded through a registry system, which ensures that each REC is unique and can only be counted once towards a company’s clean energy goals.

The use of RECs has helped to spur the development of renewable energy projects, as it creates a financial incentive for generators to produce clean energy. By buying RECs, companies can support the development of renewable energy and reduce their carbon footprint without necessarily having to generate the electricity themselves. The REC system has also been instrumental in creating a transparent market for renewable energy, which has helped to increase the adoption of renewable energy across the United States and beyond. Koulomb uses RECs to ensure that any charge coming from the grid is offset with renewable energy, and in some cases from solar farms Koulomb has built itself.