A renewable energy certificate, or REC, is a legal instrument that gives its holder  the exclusive right to claim the purchase of an amount of renewable energy, usually one (1) MWh. Once a REC has been purchased, federal regulations state that no other party has the right to claim the use of that MWh of renewable energy, even if that party directly consumes that energy on-site.ir federal tax liability.

Individuals, family offices, and closely held private companies can offset federal tax liability from passive income.

Any producer of renewable energy registered with the appropriate renewable energy tracking system. A renewable energy tracking system can be created by a state with a renewable portfolio standard (goals for production of renewable energy within the state), or it may be a private or non-profit entity. If a state’s renewable portfolio standard’s goals for a specific technology have not been met, RECs generated using that technology in that state are called “compliance RECs.” RECs generated in states without an RPS or whose RPS standards have been met for the technology used to generate them are called “voluntary RECs.”

In practice, anyone can buy RECs, and in fact many individuals receive renewable energy credits from community solar projects or are allocated them by their utilities. Generally, however, Ever.green works with companies, nonprofits and other organizations that need to purchase RECs to meet their sustainability goals.

This idea centers around the fact that while organizations that purchase RECs claim reduced  Scope 2 emissions, they still in fact use grid power, and the United States electricity grids still depend in large part on fossil fuels such as coal, oil and natural gas. In theory, RECs are supposed to provide a way for customers to express market demand for renewable energy and thus stimulate the production of new renewable energy generation resources. Recent studies, however, have shown that evidence for this is weak, in particular outside of compliance markets. The greenwashing allegation thus stems from this suspicion that standard unbundled spot market REC purchases have little effect in greening our electricity grids.

There have been calls to heighten the standards on RECs, in large part to tie them more closely to the production of new renewable generation resources. This is why Ever.green has developed the high-impact REC.

As noted above, Ever.green RECs are only sold through forward commitments. If you see one or more REC projects on our marketplace that you would be interested in supporting through a long-term REC purchase, please contact us and we can begin the process of onboarding you as a customer before presenting you with a draft forward purchase agreement for review.
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Generally, our contracting process involves back-to-back agreements with developers and end-user customers. We will enter into forward purchase agreements for RECs directly from developers on new or repowered projects, after completing a diligence process. This forward purchase agreement will also contain representations backing up the high-impact nature of the RECs. Prior to, or concurrent with, the commencement of the project’s commercial operations, Ever.green will resell those high-impact RECs as Ever.green RECs under forward purchase agreements with end customers.
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One exception to the above is if an existing customer contract is terminating, but Ever.green remains committed to purchase RECs from an existing project, Ever.green may contract with a new customer to resell the newly available REC stream. We view these as RECs as still having high impact because the developer relies on the continued revenue stream from the REC sales at the time of construction to guarantee the viability of the project, and Ever.green relies on the new end-user customer to enable it to meet its obligations to the developer.

We generally require a minimum term of at least five (5) years.

The long-term nature of Ever.green’s contracts with developers are one of the key elements guaranteeing their high level of impact, so contracts cannot be terminated at convenience. However, we are open to negotiating early termination provisions with buyers provided we can find a replacement sponsor.

There is no legal limit to the amount of RECs a purchase can buy, although generally companies only buy the RECs required to match their Scope 2 emissions. Some organizations have considered purchasing RECs on behalf of their vendors and suppliers to address their Scope 3 emissions as well (or at least those elements of Scope 3 emissions attributable to energy use in an organization’s supply chain).

Once you have entered into a forward purchase agreement for your Ever.green RECs, you will receive a welcome packet containing, among other things, a summary of the terms and conditions of your REC purchase, the schedule for REC delivery and invoicing, and Green-e disclosures.

The date you first receive RECs will vary depending on the project, but will generally be within 60-90 days following either (i) the end the end of the first quarter in which the first renewable energy project that you are supporting begins commercial operation or (ii) in cases where the project is already in commercial operation, the first quarter after entry into the forward purchase agreement.

Once you begin receiving Ever.green RECs you will also receive, each year, a prospective and historical summary of the source of the Ever.green RECs expected to be sold, and actually sold, to you during that year.

REC buyers face several risks, many of which have already been addressed above. But fear not, as Ever.green works closely with buyers to mitigate these risks.

• Facility delays: New renewable energy projects face many challenges, not all of which are addressed by a forward purchase agreement for Ever.green RECs. For example, projects may face unforeseen hurdles in obtaining interconnection, permits, or otherwise completing construction. Our contracts generally permit buyers to terminate a forward REC commitment if project completion is delayed beyond a certain point past the estimated completion date, and buyers can mitigate this risk by choosing projects nearer to completion, or by choosing repowered projects.
• Underproduction: Renewable energy sources are generally subject to variance in production by year. This risk may vary from project to project, and technology to technology; Ever.green works with customers to help identify these risks on a specific project and appropriate mitigation strategies, which may include buying slightly more RECs than required, or contracting for the sale of RECs that are of equivalent impact.
• Overproduction: Conversely, a buyer may find that its electricity demands are less than forecasted, and find itself with more RECs than it can use to offset its Scope 2 emissions. Again, Ever.green will work with customers to mitigate these risks; for example, RECs can sometimes be used in an adjacent year to the one in which they are produced, or in limited circumstances can be resold. 
• Change in law: RECs are subject to various laws and regulations. As such, the usefulness of a REC could be changed materially by federal and state governments, or by changes enacted by non-governmental organizations with significant influence on government policy, such as the Greenhouse Gas Protocol or the Center for Resource Solutions.