LEED and Renewable Energy Certificates

Rob Freeman's picture
Rob Freeman
Vice President
November 20, 2014

RECs are needed to prove that your electricity really is green. They're also key for certain LEED credits. Here’s your quick guide to understanding LEED and RECs.

The environmental benefits from renewable energy generation are certified and tracked through RECs.
The environmental benefits from renewable energy generation are certified and tracked through RECs.
Credit: Flickr

Unlike men and women, all electricity is not created equal.

And depending on where you live in the U.S., there's a 50% chance you have a choice about whether to choose renewable energy generated electricity to run your buildings instead of electricity generated from fossil fuel.

But since you're still reliant on the grid to deliver your electricity, how do you know you're getting clean, renewable sources of electricity generation? That's where Renewable Energy Certificates (RECs) come in.

What are RECs?

A Renewable Energy Certificate, aka "REC", Green Tag, or Renewable Energy Credit, is a tradable commodity representing proof that one megawatt hour (MWh) of electricity was generated by a legitimate renewable energy source.

The certificate itself can be bought or sold, and embodies the right to claim the environmental benefits, such as greenhouse gas avoided, from the renewable energy source that produced the electricity.

Renewable energy sources eligible for RECs include solar photovoltaic, wind, geothermal, biomass, hydroelectric and tidal power. RECs are tracked and certified by organizations that verify the renewable energy production, so that you, as the producer or purchaser, know what you are getting.

A REC is the equivalent of one megawatt-hour (1,000 kilowatt hours) of renewable energy. RECs provide key information about the generation of renewable electricity that is delivered to the utility grid, so that buyers know how electricity is produced. RECs include the following information:

- Type of Renewable Energy
- Date of REC (when created)
- Date when renewable energy generator was built
- Location of renewable energy generator
- Eligibility of REC for renewable portfolio compliance
- Greenhouse gas emissions (if any)

How do RECs Work?

While renewable electricity production sources have been around for many decades, it wasn't until the 1990s that RECs were created in an effort to facilitate a market for renewable electricity to make it easier for companies and individuals to legitimately purchase electricity from renewable sources.

More specifically, the U.S. government, utilities, companies and individuals needed a tracking mechanism to ensure that the "renewable produced electrons" that comprised the electricity being sent onto the vast national U.S. grid, could be accounted for once they were mixed with the other "non-renewable electrons" producing electricity from fossil fuel sources (such as coal fired power plants).

In determining an accounting method for these renewable electrons, a market was created in which the option renewable electricity production could be split into two parts: 1) The electricity produced, and 2) the environmental benefit (e.g. greenhouse gas production avoided). This diagram from the EPA shows how each REC is made of two parts:

Credit: Terrapass.com


Because RECs consist of two parts, the electricity that is created by the renewable source and the corresponding environmental benefits, each REC that is created is unique and must be tracked to ensure that double counting does not occur.

A regional tracking system was developed across the United States to eliminate the potential double counting of RECs. The system is overseen by regional, quasi-governmental entities that issue and track each certificate according to its unique identification number.

Each REC can only belong to one account holder at a time.


LEED v4, the latest version of LEED, includes the ability to earn points toward green building certification by purchasing RECs and/or carbon offsets certified by the Center for Resource Solutions' Green-e program.Sign up for Poplar's Newsletter Today!

Teams pursuing credits for either Renewable Energy Production or Green Power should become familiar with Green-e compliant (or equivalent) Renewable Energy Certificates (RECs) and/or carbon offsets.

The LEED v4 EA Renewable Energy Production credit requires buildings that generate on-site renewable energy to retain the environmental and financial benefits of their production.

If a LEED project that generates electricity through renewable energy, such as solar or wind, chooses to sell the RECs associated with that production, the project can still claim the Renewable Energy Production credit by purchasing enough RECs or offsets to make up for the RECs that were sold.

In such cases, projects that are generating electricity are required to purchase RECs certified by the Center for Resource Solutions' Green-e program.

Projects that are generating heat or other nonelectric energy are required to purchase Green-e Climate–certified carbon offsets.

To achieve the Green Power credit, LEED v4 requires the use of renewable energy production that came online in 2005 or later, and that LEED projects purchase at least 50%, and as much as 100%, of their electricity from Green-e certified sources, or the equivalent. The commitment to purchase Green Power must be for a minimum of 5 years for New Construction, and a minimum of 2 years in Existing Buildings projects.

LEED v4 projects must also commit to offsetting total energy, not just electricity. You can learn more about the changes in LEED v4 with respect to Green Power here.



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