Renewable Energy Credits

By Eva Bowie

These days, most organizations are looking for ways to operate in a more eco-friendly manner and reduce their carbon footprint. Some changes in the office - such as recycling and switching to compact fluorescent light bulbs - are easy to do.

But when the subject of renewable energy sources comes up, the alternatives aren’t as simple. One idea getting a lot of traction lately, and endorsed by the EPA and some environmental groups, is the purchase of Renewable Energy Credits (RECs), a.k.a. green tags or green certificates. Companies can purchase RECs to “offset” their consumption of non-renewable energy. This sounds great, but how exactly does it work?

Producers of renewable energy actually sell two products – the energy and RECs. RECs are tradable commodities that represent proof that one megawatt hour was produced through renewable energy sources. A possessor of RECs is entitled to claim that they have purchased renewable energy . . . essentially eco-conscious bragging rights.

The idea behind RECs is that a portion of the money spent for them is ultimately reinvested in renewable energy sources. And although there is some debate about their effectiveness, many Fortune 500 companies are offsetting as much as 100% of their energy use through the purchase of RECs.

Anyone considering RECs should also consider this: unless the energy comes directly from a renewable energy source, a purchaser of RECs is still consuming non-renewable energy. Why? Because energy of all types (renewable and non-renewable) is produced and placed on “the grid” for local power companies to access and deliver to homes and businesses. You could think of the grid as a big tub filled with liquid (the electricity), with all the different types mixed together. When we dip into the tub for our electricity (through our local power company) there’s no way to select one source over another – whether we purchase RECs or not.

But no matter how you feel about RECs, right now they are helping to generate attention for the larger issue of using renewable and recycled materials and sources of energy for mailings. And the fact is, our industry is getting greener every day!