Finance
A Renewable Energy Certificate (REC) is a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable electricity generation. For every 1 megawatt-hour (MWh) of electricity generated from a qualified renewable energy source (like a solar or wind farm) and delivered to the grid, one REC is issued. These certificates can be sold or traded independently of the physical electricity to entities looking to claim the use of green energy. Purchasing a REC allows a buyer (such as a business or institution) to legally claim they used renewable energy equivalent to the amount on the certificate, even if their actual power came from the grid. RECs are a key component of voluntary green power markets and compliance markets (for meeting Renewable Portfolio Standards), providing revenue to renewable energy projects and a mechanism for tracking renewable energy usage.