Renewable Energy Certificates are a Smart Buy

The other consideration is your contact length. Two years is common and corresponds to requirements under LEED, but you might be able to lock in prices or get a better rate if you opt for a long-term agreement.

“Once the contract period has expired, a new contract can be negotiated to continue purchasing RECs,” notes Malesevich. “For Transwestern, contract periods that extend further than two years are rare. However, some properties have chosen longer periods, such as five years, to ensure they meet the requirements for recertification or avoid possible future price increases.”

The Importance of Verification
Because you’re buying a credit for energy and not the electricity itself, you need to partner with qualified providers. Look for developers who have earned the Green-e designation. The verification process includes a third-party audit of all claims and billing invoices to ensure the electricity is generated from renewable sources and only sold to one buyer.

“We assign RECs a unique registration number so they can be electronically tracked in a registry that documents the source type, when and where it was generated, the provider, and the purchaser,” Swenerton explains. “Once sold to an end user, the certificate is retired so it can only be purchased once.”

Because only one organization is allowed to lay claim to the green energy, this process ensures a REC isn’t double counted: “The electricity can’t be zero emission as a credit for your facility and zero emission when it’s actually drawn from the grid,” clarifies Swenerton.

For example, even if your utility is the owner of the renewable generation system, it can’t count the electricity as green if your company has purchased a REC for it. The same is true for any state with clean power sources – the state can’t claim the green electricity unless it’s the holder of the REC as well.

This is also the case if you had solar panels installed on your facility as part of a power purchase agreement (PPA) but the solar provider is selling RECs based on the energy produced – your company can’t claim that green power, Swenerton stresses. Unless you are also purchasing the certificates, you only benefit from the discounted utility prices under the PPA and marketing your property as a host for renewable energy.

Once the REC is retired, the electricity is no longer considered renewable and reverts to grid average, which is an emissions profile based on the typical resource mix of the generation region, Swenerton notes. The REC nonetheless is proof of its sustainable origins and provides your company with a meaningful way to support clean energy.

Jennie Morton is senior editor of BUILDINGS.

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