The debate regarding Renewable Energy Credits (RECs) is increasing. Are they green washing and/or do the really reduce global warming?

What is a REC? In a nut shell, it is the environmental benefit of a renewable resource over that of a non-renewable resource.  An example would be if we have a solar array that produce 500 kWh per day and a coal plant that produces the same 500 kWh.  Both power plants produce the same amount of power. Few would argue that while the solar array produces no CO2, the coal plant does.  An REC represents the Green portion of the solar array, the reduction in CO2 component.  So from a prospective of our society, we say an REC of a solar array represents the value we place on reducing pollution and CO2 output.

I remember back in 1980’s, sitting in my Economics class and hearing about clean air credits.  How did this work? You assign a cost  for polluting the air and you assign a credit to those who lower their polluting below a base line, i.e. invest in additional filtration methods reducing pollution.  Those who pollute above this base line must purchase credits to off-set this additional pollution/dirty air, to equal the baseline.  Thus those who install processes to reduce pollution receive a credit and do not have to pay.  Another way to look at this is those who pollute help fund, or justify, or provide an additional incentive, to those who reduce polluting.

The biggest issue many have with RECs is the “not in my backyard” policy regarding job creation.  RECs are classified and may come from anywhere in the county, or within a state.  When I install a solar system in Sonoma County, I directly benefit jobs, tax revenue and permit fees.  REC’s are not this local, but do they do serve a purpose.

Who is the main purchaser of RECs?  The utilities who are being mandated to increase the amount of renewables they use to help reduce green house gases.  In California they are being mandated to increase this to 33% (renewable energy is considered solar, wind, Bio-mass, Small hydro and geothermal) by 2020.  RECs are allowed to be a portion of this total, but not the entire total.  The California Public Utilities Commission (PUC) regulates this.  So an REC helps justify the building of renewable energy plants by providing an additional incentives, reducing pollution and CO2 emissions.  And like many, while I believe it is better to build renewable energy systems locally, RECs help support the investment in renewable energies and within limits are a valid way to off-set renewable energy requirements for utilities.

At the posting of this email, PG&E was currently at about 19% renewables and Sonoma Clean Power (SCP) (http://www.scwa.ca.gov/cca/), a new option to PG&E in Sonoma Count, plans on opening their doors with a 33% renewable portfolio in 2014, growing to 50% by 2020.  SCP will get energy from renewable sources in about the same proportions as PG&E is currently and will make up the difference primarily using RECs.  I have heard many, including those that support PG&E, discount the value of RECs.  PG&E uses RECs as well and recently went to the PUC for a 100% renewable rate plan and was rejected because it was too REC heavy.

It is my belief that REC’s use is a valuable part of promoting renewable energies, like the clean air credits of the 1980’s.  The result of these clean air credits made it profitable for companies who reduced pollution while more costly to those that polluted.  It set a value on clean air, in the same way RECs set a value on reducing CO2 emissions.  With global warming being one of the biggest issues facing us in the years to come, anything we can do to reduce CO2 emissions, including using RECs to promote renewable energies, is a sound social and economic policy.