A market-based instrument known as a Renewable Energy Certificate (REC) verifies that the holder of the certificate owns one megawatt-hour (MWh) of electricity produced from a renewable energy source. The received REC can subsequently be sold on the open market as an energy commodity after the power provider has supplied the energy into the grid. Earned RECs may be sold, for instance, as a carbon credit to other polluting entities to offset their emissions. Green Tags, Tradable Renewable Certificates (TRCs), Renewable Electricity Certificates, and Renewable Energy Credits are some other names used for RECs.
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