Navigating renewable energy purchases can be confusing, with terms like certificates, vintages, and reporting years often used interchangeably. This guide is designed to help clarify what Renewable Energy Certificates (RECs) are, how they work, and what to consider when buying them. Whether you are just getting started or looking to refine your sustainability strategy, this resource provides practical answers to help you make informed decisions.
Renewable Energy Buyers Guide
Certificate vs Credit
Renewable Energy Certificates (RECs) are sometimes called credits. While certificate and credit are generally considered to be interchangeable, the more accepted one is certificate.
Vintage
The buying and selling of RECs are based on vintage, which is when the associated electricity was generated. The forward market often trades as Front Half, the first 6 months of the year, and Back Half, the last 6 months of the year. When purchasing RECs you may see notes like “Vintage: BH2025” or “v2025”.
Reporting Year
Buyers are typically focused on Reporting Year, meaning the year energy consumption occurred. Tracking and reporting of RECs is based specifically on calendar years. A buyer’s fiscal year does not change this. When a buyer is managing RECs you will often see them categorized by reporting year. You may see notes like “RY2026” or “RY2027” on contracts for tracking purposes.
Green-e Certification
The Green-e® Certification program is designed to provide buyers with assurances as to the quality of what is being purchased. Green-e has rules that create standardization around what generators, vintages, and other requirements apply. Green-e is the industry standard and is widely adopted across use cases. Adding “green” to a 3rd party electricity supply agreement will default automatically to Green-e certified RECs.
We encourage all buyers to leverage this standard as the safest, most widely accepted strategy to meet sustainability objectives. Please note that Green-e RECs do come at a small premium and depending on your chosen reporting framework you can use CRS Listed, non-certified, EFECs, or other products to meet your goals. If you are unsure, it is best to rely on Green-e or to work with a consultant to help guide you.
More information is available on the Green-e website.
CRS Listed vs Green-e Certified
The Green-e Certification is maintained by the Center for Resource Solutions (CRS). Generators must be CRS Listed to produce RECs that are later Green-e Certified. The CRS designation signals the facility meets certain preliminary criteria. This is intended to aid wholesale buyers when selecting where to source RECs or electricity generation. The CRS Listed designation is not intended to be used by REC buyers or for renewable energy claims. If you purchased a Green-e Certified product and instead received uncertified RECs from a CRS Listed facility, you didn’t receive what you paid for!
For more information, please see this helpful guide.
Generation Sources
There are differing opinions as to what constitutes “green” or sustainable generation. While the following can all be considered green, we strongly encourage buyers to stick to a mixture of Wind and/or Solar resources. These are broadly applicable across sustainability frameworks and are consistently defensible when sustainability efforts are reviewed by third parties.
A list of CRS listed generators is available on the Green-e website.
Eligibility Period
Every calendar year can be covered by Green-e RECs generated within that year, the last 6 months of the year before, and the first 3 months of the year after. This creates a 21-month generation window to source from, helping the market stay liquid and encouraging all RECs to be utilized.
It is perfectly acceptable, and quite common, for an organization to meet RY2027 goals by using Vintage BH2026 RECs. In some instances, buyers may prefer to have Reporting Year and Vintage Year match, and that is absolutely an option but may come at a premium as it circumvents the more standardized offerings.
Generation Age
Green-e only accepts generators built in the last 15 years. This encourages the ongoing creation of new assets. A common example of customers reducing their purchasing costs, albeit modestly, is to source uncertified RECs from assets that have aged out of the Green-e program.
Retirement
When RECs are used to offset your electricity consumption they are “Retired” on your behalf. This is done through one of the many REC tracking systems across the US. Tracking systems include NAR, ERCOT, PJM GATTs, M-RETs, and more. Typically, this is done on your behalf by the REC seller who maintains their access to the various registries. Buyers should be certain their purchase agreements include this administrative step. The alternative is the buyer must, after purchase, join a specific registrar in order to receive a REC transfer and retire them independently. It is possible to need to become active across multiple registrars depending on the source of what was purchased, which may not be known until after the fact.
Regardless of who is administratively completing retirement, when retirement occurs it must be on behalf of a specific legal entity. Often retirement paperwork will also note what Reporting Year the RECs will be applied to (i.e. “RY2026”). Always ensure the right entity is used because once retired, there is no going back.
Location vs Market Based Emissions
Both Location and Market based emissions metrics have become the global standard way to report on and track sustainability efforts. The primary benefit of purchasing RECs is they offset your market based emissions.
FAQ
Why should I buy RECs?
To meet your sustainability objectives and help finance the addition of newer, cleaner generation that ultimately reduces energy costs for everyone.
Can I buy RECs in advance?
Yes! Purchasing in advance, meaning RECs will be delivered in subsequent years, means you are contracting today for costs paid later. The chosen seller will want to run a credit check against the buying entity. And there are various payment options available including upfront, at delivery, and over time. Please keep in mind buying RECs within the 21-month window is much easier and often cheaper. Including that many times of year you can purchase RECs for immediate delivery that span multiple reporting years.
How many RECs do I need to buy?
The easiest way to buy the right number of RECs is to wait until the end of a calendar year, calculate your total energy consumption for the year, and then round it up to the nearest MWh. For instance, if you consumed 25,678,910 kWh in Calendar 2026. You would need to purchase 25,679 RECs. For transactional simplicity, depending on the seller, you may end up purchasing 25,700 RECs or similar round quantity.
1 REC = 1 MWh = 1,000 kWh
Should I bundle RECs into my supply contract? Or buy them separately?
Great question! If you are already buying power from a 3rd party supplier, it is generally easier to bundle your RECs into that agreement (“Bundled RECs”). But there are many reasons to purchase RECs as a separate contract (“Standalone RECs”), including the wide variety of products, payment structures, and solutions available in the market.
Bundled Pros
Bundled Cons
What if my local electric utility has a renewable energy option?
Fantastic! This is another option in your toolkit to accomplish your sustainability goals. A growing number of electric utilities offer a “green tariff” option where the cost of renewable energy is embedded in your regular utility invoice. The option is more likely to be available in markets that do not already have 3rd party supply. The best strategy is to simply compare the published green tariff rate to buying RECs standalone, and if available to 3rd party supply options as well. The convenience of a tariff option is similar to third party supply, where the quantity of RECs is automatically matched to your consumption and the costs are paid monthly on your existing electric invoice. Energy managers should be very careful to consider cost as green tariff options can be well below and above the prevailing market cost of green power.
How much does it cost?
The cost of RECs is driven by several factors, but a safe estimate is between $2 and $6 per REC or $0.002 to $0.006 per kWh. This adds an approximately 1% to 3% premium to your annual electricity cost. Assuming a standardized Green-e any source REC purchase, the biggest factor driving price is quantity. Wholesale transactions of as many as 100,000+ RECs can be half the cost or even less of smaller purchases. Key cost factors include:
Can I carry RECs over to subsequent years?
When buying standalone RECs in advance, it is uncommon to shift unused quantities to subsequent years. However, if you purchased BH2026 RECs that ultimately did not get used, they can be applied to RY2027 prior to retirement.
Where are the RECs from?
You will see exactly where and when your RECs were created, down to the specific generating asset, upon receipt of your retirement certificates. While a large share of US renewables come from wind and solar assets in Texas, your green power may come from anywhere in the country. Part of the value proposition of creating standardization is to create a deep, liquid market that supports building more renewable energy. That liquid market provides stability and clarity for developers to finance and build new assets.
Can I get local green energy?
Absolutely! You can be incredibly granular with your green power purchase. Including where, when, and from which asset the REC is sourced from. But buyer beware, the more specificity and further you deviate from standardized products the higher the cost. For example, right now a Massachusetts solar REC is approximately 125 times more expensive than a national Green-e any source REC. And most reporting frameworks do not provide any additional benefit for this locality improvement.
When is the best time to buy RECs?
REC prices move with supply and demand like any other marketplace. This means there is no consistent time of year that is best. However, many customers purchase RECs in Q1 because that is when you know the prior year’s annual consumption. This is beneficial because you can purchase the exact quantity of RECs needed with confidence. And the cash cost for one calendar year is delayed until the next. This can also be a challenge as many organizations time their purchases this way, potentially creating more market volatility (which can be positive or negative) than other times of the year. Another common strategy is to purchase RECs annually based on market prices, looking for an ideal dip in the market. And having that purchase include a true up of any uncovered electricity consumption aggregated together with a purchase to cover future consumption.
Can I get 24/7 load matching green energy?
Several large technology companies have championed 24/7 load matching, meaning covering every hour of electricity consumption with a commensurate amount of green energy generation. The cost and complexity of doing this is not typically feasible for small or mid-sized buyers, although that is rapidly changing. There are options that bundle this into supply agreements, as well as a growing marketplace to purchase 24/7 load matching power separately.
For more information, talk to one of our sustainability advisors or visit Level Ten Energy.
Are REC purchases subject to sales tax?
Generally, standalone REC purchases will not include sales taxes. The quantity purchased times the price will equal the cost paid. Bundled RECs, because the cost is included in the overall rate, typically are subject to sales tax.
For additional information please contact us to schedule a quick call.