Green Energy Certificates

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While green energy is characterized by clean and renewable sources, there are still some variations on whether or not an energy source can be considered as such. To establish standards and promote funding for research and development on clean energy, green energy certificates are issued.

What are green energy certificates?

Green energy certificates serve as proof that the electric power used by the certificate holder comes from clean and renewable sources. As a commodity, one certificate is usually equivalent to 1 megawatt-hour of renewable energy. Also known as green tags and renewable energy certificates (RECs), green energy certificates may also be sold and traded by the owner. It should be noted, however, that the purchase of a certificate is distinct from payment made for actual power consumption. The advantages of owning a certificate is that it may entitle the owner to subsidies from programs that promote green energy, and it facilitates the generation of financial support for research and generation of renewable energy sources. In addition, certificates are monitored and assigned an ID number to ensure that a certificate is not counted twice.

How does one earn a green energy certificate?

A green energy certificate may be obtained through mandatory or voluntary terms, depending on what is prescribed in your country. In Canada, green energy certificates may be purchased from provincial retailers for both commercial and residential use. The price is usually at $20 per megawatt-hour, although the price for commercial users may be customized. A power provider may buy certificates by wholesale, and then sell these to its individual subscribers.