Renewable energy certificates (RECs) are transferable commodities that represent the environmental and other non-power attributes of renewable energy. RECs are used to demonstrate compliance with state renewable portfolio standards (RPS) which are designed to increase development and production of energy from renewable resources by imposing mandated targets for retail sales of renewable generation. RECS are also used in the voluntary green power market which allows individual purchasers to voluntarily purchase a REC and then claim an environmental benefit associated with that purchase. This background paper describes the importance of RECs and how state RPS policies and tracking systems influence REC availability, cost of compliance and price differences in REC markets from state to state. Resources for additional information about these topics are also provided. I. What is a REC? Renewable Energy Certificates (RECs) represent the environmental and other non-power attributes of renewable electricity. RECs are measured in megawatt-hours (MWh) and are created at the point of generation, as the electricity is introduced into the electricity grid. RECs are numbered, paper certificates that represent each MWh of renewable energy sold and provid
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