Find out how Renewable Energy Certificates (RECs) work, what they represent, and how companies use them to match electricity consumption with renewable generation.

What is a Renewable Energy Certificate (REC)?

A Renewable Energy Certificate (REC) represents proof that one megawatt-hour (MWh) of electricity has been generated from a renewable source, such as wind, solar, or hydropower, and delivered to the grid. Because electricity from different sources mixes once it enters the grid, it cannot be traced to a specific end user. RECs address this by assigning a certificate to each unit of renewable electricity generated.

When a company purchases and retires a REC, it can claim that an equivalent amount of renewable electricity has been generated and added to the grid on its behalf. The electricity it consumes, however, still comes from the shared grid.

How do RECs work within electricity markets?

For each megawatt-hour of renewable electricity generated, a certificate is issued. The electricity flows into the local grid and is consumed by nearby users. The certificate can be sold separately.

Companies can purchase and retire these certificates to match their electricity consumption with renewable generation. This “book-and-claim” system allows companies to support renewable electricity production and report renewable energy use, regardless of the physical source of the electricity they consume.

Are RECs the same as Guarantees of Origin (GOs) or I-RECs?

The underlying concept is consistent across regions, but different systems are used. In Europe, renewable electricity attributes are tracked through Guarantees of Origin (GOs). International markets often use International Renewable Energy Certificates (I-RECs). In North America, the term REC is commonly used.

These systems operate under different governance frameworks but share the same function: to track renewable electricity generation through registries and ensure that certificates are uniquely issued, traded, and retired.

Do RECs reduce a company’s carbon emissions?

Under the Greenhouse Gas Protocol, companies may use RECs when reporting electricity emissions under the Scope 2 market-based method. This allows them to match electricity consumption with renewable generation.

Certificates do not necessarily indicate that new renewable energy capacity has been added. As a result, many organizations treat RECs as one component of a broader decarbonization strategy, which may also include direct renewable procurement, power purchase agreements, and on-site generation.

How is double counting avoided when using RECs?

Certificates are issued, tracked, and retired in electronic registries to prevent multiple claims on the same unit of renewable electricity. Each certificate has a unique identifier and can only be claimed once.

When a company uses a certificate to support a renewable electricity claim, it must be formally retired in the registry. In Europe, disclosure systems and the residual mix also aim to prevent renewable attributes from being counted by both certificate buyers and grid electricity consumers.