Known as:

• Green Tags
• Renewable Electricity Certificates
• Renewable Energy Credits
• Tradable Renewable Certificates

Renewable Energy Certificates (RECs) function mainly as proof of purchase for renewable energies, which in other way, can be traded, sold or bartered. In some countries, they represent the environmental attributes produced by some renewable energy projects of the government and are separately sold from electricity and other commodities. This type of certificate incentivizes carbon-neutral renewable energy by producing a production funding to electricity generated from renewable sources. It is important to recognize that the energy linked with a renewable energy certificate is sold separately for the consumer.

The said certificate’s prices depend on factors, such as the number of period of time or year the renewable energy certificate was generated, facility location, whether there is a close level of supply and demand condition, whether the REC is utilized for compliance even the type of power created. They are properly accounted for the assurance of no double entry cases.

In Australia, the responsibility of REC-registry is to facilitate the creation, surrender and transfer of renewable energy certificates (RECs) and maintain its various registrations. The only process allowed is the online registration.

The advocacy using a standard renewable energy certificate is to supply evidence of the production of amount  of renewable energy and to provide a system which enables renewable energy deal, enabling the creation of an industrial or economic market for renewable energy and to promote the development of new renewable energy capacity. This system is strictly implemented in Europe.

An example of renewable energy that requires renewable energy certificate is electricity. This simply means that electricity is produced after the issuance of such certificate. The said certificate is then ready for the trading phase. The certificate’s cycle ends when the consumer or supplier will consume or cancel it. This certificate is issued legally by the issuing body or the independent organization to make sure that the electricity produced comes from a renewable energy source. Another task is to have control on registrations which is usually a monopoly to avoid double issuance and to cancel it upon the owner’s request.

The main advantage of renewable energy certificates is its marketing process. Since it is market-based, it gives the people and other corporations a beneficial opportunity. Others are also permitted to buy these credits to compensate their energy-demanding activities that produce global warming gases like air travel.

The premeditated proposal of using renewable energy certificates is to lower the destruction of global warming and its sales will offset the cost of running the system of every country using it. It is a mutual marketing strategy concerned on the probable outcome of extreme industrial energy consumption. This innovation is the best discovered idea so far. In the millennium of outstanding technological upgrades, the use of renewable energy certificates is a positive potential mechanism for increasing our lifespan of existence.