RECs and the Market Maker
Renewable Energy Certificates (REC's) are starting to buzz more often in my ears, so I figured that it was time to begin understanding what will someday become the "alternative" market for trading. Renewable Electricity Certificates or Tradable Renewable Certificates (TRCs) is viewed as the solution that will help states meet their Renewable Portfolio Standard (RPS) sooner, if not more aggressively. To simplify how the process works, here's my take: 1. Grid-tied producer of electricity (solar, wind...pick your flavor) produces a) electricity and b) the REC. 2. Once the renewable-based electricity is created and sent to the grid, there is no way of distinguishing between electricity generated from other sources. ("Come on! I swear my 1-panel system is powering Grand Central Station.") 3. The solution is to give the point of generation 1 REC for every megawatt of electricity contributed to the grid. 4. This gives you the two products (electricity a...