Understanding Renewable Energy Credits in California
RECs (, sometimes called Certificates) are a measure of used in states like California to help subsidize and market . Businesses can create, buy, and sell RECs to help meet their goals, offset , and much more.
Coldwell consultation services to enable both buyers and sellers in the REC market. However, we understand that businesses new to the process may have plenty of questions. Let’s go over some of the more commonly asked questions. provides
1. What exactly are RECs?
RECs are units that represent the created by specific renewable sources, like grids and wind . One REC represents one megawatt-hour ( ) of produced and delivered by a . These units can be traded on a market between businesses and owners as a method of raising cash or meeting sustainability goals. RECs generated entirely from installations in California may be referred to as SRECs ( or .)
2. How do RECs work?
RECs represent but buying or selling them doesn’t mean that an organization is buying or selling the itself. Instead, it is trading on the value of renewability. That may sound strange, but it’s an important credit in a state like California where meeting goals or qualifying for tax credits and incentives are key commercial goals.
REC units are produced by sources, and automatically credited to the organization that owns those sources, from massive grids to companies investing in panels on their buildings. Wind farms, biomass, and other types of can also generate RECs.
The owner of the REC can either hold it or sell, but a REC can only be sold once. When a company purchases a REC, they are purchasing proof that they have “used” that , even if the actual has gone elsewhere on the grid.
3. What are the benefits of RECs?
There are several benefits to RECs depending on an organization’s position, including economic and :
- RECs are a commodity that creators can sell to raise cash with their excess .
- RECs are a credit that can be held to lower an organization’s numbers or meet other and sustainability goals (Whole Foods and Starbucks both do this, for example).
- Organizations and consumers can purchase RECs specifically to encourage the .
- The market acts as a subsidy to encourage more use.
- Utilities and other organizations can buy RECs specifically to meet regulations in California.
4. How do you buy RECs?
There are two common options when buying RECs. First, you can buy directly from a utility company that has resources. Second, you can contact a third-party that sells on behalf of electric companies and other providers. These companies are typically certified with Green-e certifications in North America.
If your organization is looking for a specific REC purchase strategy or wants to meet certain contact Coldwell for more information and help creating the correct purchase plans. goals, you can
prices can vary based on a number of market factors. This includes the location of the , the type of , basic supply and demand, and if the RECs are being bought in bulk for compliance reasons.
5. How do you sell RECs?
There are various ways to sell RECs and Coldwell can help streamline the process of selecting the right strategy for selling your excess . However, it’s important to note that when an organization sells its RECs, it cannot claim the use of that it has produced.
6. What is California’s Low Carbon Fuel Standard (LCFS) Program and how does it work?
This is a program designed to reduce carbon emission levels from transportation fuel, specifically targeted at groups like the trucking industry. The program uses “carbon intensity” or CI levels of specific fuels to set fuel targets. If an organization uses transportation fuels with a lower CI than the current established target, they generate LCFS credits. These function in a very similar way to RECs and are frequently sold to fuel producers to cover their carbon emission deficits.
7. Can RECs be used in the LCFS program?
RECs can be used to receive LCFS credits for low CI , making fuel producers and similar organizations potential purchasers of RECs. However, those RECs cannot also be used for the Voluntary (VRE) Program. In other words, there’s no double-dipping.
About Coldwell Solar
Coldwell Solar is dedicated to providing effective, reliable and efficient solar energy solutions and services to business and utility clients.
Founded in 1986, Coldwell Solar, Inc. is based in Rocklin with offices in Tulare, Bakersfield and Petaluma, California. The company offers superior standards of professionalism and integrity in the building of long-lasting solar installations that provide the highest energy output – with significant savings on energy costs. Transparency and ongoing service support to customers, coupled with integrity in all of the company’s work, is the bedrock of Coldwell Solar’s business values, and always will be. Highly-skilled employees bring unmatched power system engineering and project management experience from the solar, construction and energy management industries. A significant part of that expertise is the result of the company’s history of innovation in design, engineering and construction.
Coldwell Solar handles the entire solar installation process, including permits,
rebates, engineering, construction, on-going monitoring and support of the
system for years, as an energy partner.
All of our experts are certified to ensure your project is done right.
Coldwell Solar focuses on serving agribusiness, farms, utilities, architects, general contractors, commercial buildings, properties, schools, manufacturing and industrial companies. The company is certified to meet the most complex standards and consistently delivers the highest-quality, long-lasting workmanship.
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