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Basics of Renewable Energy Certificates

The solar or wind power system you install on your home or business generates two things. The obvious is electricity although it also produces something most consumers don’t know of, Renewable Energy Credits (RECs) also know as “green tags.”

For example, since the solar panels you install generate electricity that does not hurt the environment or human health, that benefit is an asset which are usually purchased by consumers because they want to be more “green” or by utilities as a result of regulatory requirements. One REC represents one megawatt-hour of renewable electricity.

If your state does not offer rebates, you maybe still be able to earn income from your solar power system by selling the RECs your system generates. In 2007, a 2.5 kW solar electric system could earn about $140 per year in REC sales.

Currently, REC pricing is unpredictable, although the value for RECs are expected to rise in the future, as legislation is passed to set a national cap on carbon emissions. In 2008, in the utility market RECs sold in a range of $20-$30. Check the map below to see if you live in a state that has a REC trading program in place.

Want to learn more about green tags? Click on this link.

Author: Deep Patel

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