Renewable Energy Certificate (REC)
Definition - What does Renewable Energy Certificate (REC) mean?
A Renewable Energy Certificate (REC) is a tradable commodity that is issued for each megawatt hour of electricity produced through the use of renewable energy sources. RECs are an EPA incentive to generate renewable energy. Thus, a provider of renewable energy can sell it to a client who receives an REC.
Safeopedia explains Renewable Energy Certificate (REC)
An example of this system could be a wind-farm that generates electricity. For each Megawatt hour of electricity produced, it receives an REC. The energy is fed onto the grid, and the wind-farm can now sell its REC. The REC is used, or ‘retired’ when it is used to comply with regulatory requirements, to lodge renewable energy claims, or sold. Once this has happened, the REC may not be sold or used again.