Renewable Energy Credits (RECs) are used to promote and track the production and use of renewable energy sources. 

RECs can play a crucial role in incentivizing renewable energy development and providing revenue streams for renewable energy producers. They contribute to reducing greenhouse gas emissions and promoting a more sustainable energy future. 

RECs can also be referred to as Green Tags, Renewable Energy Certificates, or Tradable Renewable Certificates.

Here's how RECs generally work:

Renewable Energy Generation:

When a renewable energy facility, such as a wind farm, solar power plant, biomass facility, or hydropower plant, generates electricity, it is considered "green" or renewable energy.

Certification:

Independent organizations, often government agencies or third-party certifiers, verify and certify that a certain amount of energy has been generated from renewable sources.

Renewable Energy Credits:

For every megawatt-hour (MWh) of renewable energy generated and certified, a corresponding Renewable Energy Credit is created. Each REC represents the environmental benefits of producing electricity from renewable sources, such as reducing greenhouse gas emissions and dependence on fossil fuels.

Trading and Transactions:

RECs can be bought, sold, and traded on various renewable energy markets. Entities that generate renewable energy and exceed their renewable energy targets can sell their surplus RECs to other parties that have emission reduction targets or want to support renewable energy.

Renewable Energy Usage Claims:

Organizations and individuals can purchase RECs to claim that they are using renewable energy even if their direct electricity supply might still come from non-renewable sources. This allows them to support renewable energy project

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