This guide explains what RECs are, how they work, how they differ from carbon offsets, what you can say when you buy them, and the REC options Terrapass offers.
Key takeaways
- A REC represents the environmental attributes of 1 megawatt hour (MWh, or 1,000 kilowatt hours) of renewable electricity delivered to the grid.
- RECs are tracked with unique ID numbers, so each one can be claimed by only one buyer.
- Buying RECs does not change the physical electricity that reaches your home. It gives you the right to claim the renewable generation behind each certificate.
- RECs are not carbon offsets. A REC is measured in megawatt hours, and a carbon credit is measured in metric tons of CO2 equivalent.
- The FTC Green Guides call for REC based claims to be accurate and qualified.
- For businesses, the GHG Protocol is proposing hourly matching rules for RECs, with a final standard expected in 2027.
- Terrapass offers personal RECs as a one time purchase or a monthly subscription, and Green-e Energy Certified RECs with a 5 MWh minimum.
What Has Changed for RECs in 2026
2026 snapshot
- Scope 2 rules may tighten: The GHG Protocol is revising its Scope 2 guidance. Its October 2025 proposal would require hourly matching and deliverability for RECs used in market based reporting. The consultation closed on January 31, 2026 with more than 1,000 submissions, a second consultation is planned in 2026, and a final standard is expected in 2027. Verified RECs remain valid under the current standard.
- Average home use: The average US residential customer used 865 kWh per month in 2024, according to the EIA.
- State targets keep rising: California’s renewables standard calls for 50% by 2026, 60% by 2030, and 100% renewable and zero carbon electricity by 2045. In 2023, 42.9% of the state’s retail electricity sales came from certified renewables.
- Claims guidance: The FTC has been reviewing its Green Guides since 2022. Its current renewable energy guidance in section 260.15 still applies and is summarized below.
What Is a Renewable Energy Certificate?
You may hear other names for RECs (pronounced like “wreck”), such as green tags, renewable energy credits, and tradable renewable certificates. A REC is created for each megawatt hour of electricity generated from a renewable source like solar, wind, geothermal, biomass, or certain hydropower and delivered to the grid. A megawatt hour is equal to 1,000 kilowatt hours.
When renewable electricity is generated, two things are created: the electricity itself and the environmental attributes of producing it without burning fossil fuels. RECs are how those attributes are tracked and accounted for. They can be bought, sold, and traded within the United States, and each one is assigned a unique ID number in a tracking system so it can be followed from creation to retirement.
How Do RECs Work?
The electricity from a wind farm or solar array flows into the big pool of electricity where we all swim, otherwise known as the power grid. Once it is on the grid, it mixes with electricity from every other source. When you buy regular power, you receive commingled energy, a mix of renewable and fossil fuel sourced power.
RECs let the renewable attributes be sold separately from the electricity. The process looks like this:
- A renewable generator produces 1 MWh and delivers it to the grid.
- A tracking system issues one REC for that megawatt hour.
- The REC is sold, either bundled with the electricity or on its own (unbundled).
- The buyer retires the REC, so no one else can claim it.
It is important to understand what a REC does and does not do. It does not change the physical electricity that arrives at your home. What it does is give you the right to claim that renewable generation equal to the RECs you retire has been matched with your electricity use, and it provides revenue to renewable generators.
How much is 1 MWh?
One MWh is 1,000 kWh. The average US residential customer used 865 kWh per month in 2024, so one REC is a little more than the electricity an average home uses in a month.
Who Buys RECs?
RECs are bought for two main reasons. The first is compliance. Many states require utilities to supply a set share of their electricity from renewable sources by specific deadlines, and they use RECs to show they have met those targets. California, for example, requires 50% renewable electricity by 2026, 60% by 2030, and 100% renewable and zero carbon electricity by 2045. These compliance programs are part of the REC trading game, and RECs can be traded across state lines, though each program sets its own rules about which RECs are eligible.
The second is voluntary demand. Businesses, institutions, and individuals buy RECs to support renewable energy and to match their electricity use with renewable generation. You do not need the budget of a state government to take part.
RECs vs. Carbon Offsets
RECs and carbon offsets are often confused, but they are different tools:
| Renewable energy certificate (REC) | Carbon offset (carbon credit) | |
|---|---|---|
| Unit | 1 megawatt hour of renewable electricity | 1 metric ton of CO2 equivalent reduced or removed |
| What it tracks | The renewable attributes of electricity generation | A verified reduction or removal of greenhouse gases |
| Typical use | Matching electricity use with renewable generation and reporting market based Scope 2 emissions | Funding reductions or removals for emissions you have not yet cut |
Many people use both, for example RECs for their electricity use and offsets for travel. Learn more in our guides to carbon offsets explained and the difference between a carbon offset and a carbon credit.
What Can You Say When You Buy RECs?
The FTC’s Green Guides (16 CFR Part 260) include renewable energy claims guidance in section 260.15. In plain terms:
- RECs convey the right to claim use of the renewable electricity behind them. A company that has matched its electricity use with RECs can describe that accurately, for example “we matched 100% of our 2026 electricity use with RECs.”
- A company that generates renewable electricity but sells RECs for all of it should not claim that it uses renewable energy, because the REC owner holds that claim.
- Avoid saying RECs offset emissions or make your electricity carbon free. Describe what you did: you purchased RECs to support renewable generation equal to your electricity use.
This is general information, not legal advice. If you make public claims, check them against current guidance and your state’s rules.
Do RECs Make a Difference?
It depends on the project and the buyer. Supporters point out that REC revenue helps renewable projects, gives buyers a way to back renewable electricity, and is the accounting basis that prevents the same clean power from being claimed twice. Critics note that RECs from existing facilities may not add new renewable capacity. To get the most from a purchase, look for transparency about the source and year of generation, consider certified products such as Green-e Energy, and pair RECs with efficiency measures that reduce how much electricity you use. See our guides to the advantages and disadvantages of renewable energy and green, renewable, and clean energy.
RECs and Business Reporting
Many organizations use RECs to lower their reported market based Scope 2 emissions under the GHG Protocol. That is why the proposed changes matter. If hourly matching and deliverability are adopted in the final standard, businesses may need RECs that match when and where they use electricity. For now, verified RECs remain valid, and the proposal would phase in over time. If you report emissions, it is worth reviewing how much of your Scope 2 figure relies on annual unbundled RECs.
If you need documentation behind your purchase, such as for reporting or a customer requirement, see the Green-e Energy Certified option below and our Green-e certified products page. You can also explore business products or use the carbon footprint calculator to estimate your electricity footprint.
Terrapass REC Options
Terrapass offers three ways to buy RECs. All are priced per MWh, and Terrapass retires the RECs on your behalf so no one else can claim them. Prices in this section are in US dollars at the time of writing, and the product pages display prices in your local currency, so check them for current pricing.
Purchase Personal Renewable Energy Certificates (RECs)
The one time purchase is designed for households that want to match a full year of electricity use. Enter your home’s annual usage in MWh, which you can find on your utility bill. Terrapass notes that the average US household uses about 11 MWh a year, so at $8.00 per MWh, matching 11 MWh would cost about $88. Each REC supports 1,000 kWh of renewable generation from wind, solar, or hydroelectric facilities on the US grid. You receive a Terrapass Certificate of Purchase, and Terrapass retires the RECs for you. As the product page explains, RECs represent the environmental attributes of renewable energy generation, and they do not mean the electricity powering your home comes from a renewable source.
Renewable Energy Certificates | Monthly Subscriptions
If you would rather spread the cost across the year, the monthly subscription buys RECs automatically each month. It starts at 1 MWh (1,000 kWh) per month, which is $8.00 per month at the time of writing. You can raise or lower the quantity to match your utility bill, and you can cancel anytime, which suits households whose use changes with the seasons. It supports the same wind, solar, and hydroelectric generation on the US grid, and you receive the same Terrapass Certificate of Purchase.
Green-e Energy Certified RECs | Renewable Energy Certificates
Green-e Energy Certified RECs are for buyers who need documentation behind the purchase. The Green-e Energy National Standard is administered by the Center for Resource Solutions, an independent nonprofit, and covers how certificates are tracked, verified, and retired so they are never claimed by more than one buyer. Terrapass processes each purchase in the annual Green-e Energy Verification Audit, and you receive a Certificate of Green-e Energy Certified REC Purchase. The product content label shows where and how the electricity behind the RECs was produced. A minimum purchase of 5 RECs (5 MWh, or 5,000 kWh) is required.
This is the right choice if you need RECs that meet the Green-e standard for your own reporting, a customer requirement, or LEED points, as described on our Green-e certified products page. Keep in mind that these RECs do not contain electricity, and that if you want to use the Green-e logo in your own marketing materials, that use must be audited and approved by Green-e.
| Option | Best for | How it works |
|---|---|---|
| Personal RECs (one time) | Matching a full year of home electricity use | Enter your annual usage in MWh and buy once |
| Monthly subscription | Spreading the cost and adjusting with the seasons | Starts at 1 MWh per month, change or cancel anytime |
| Green-e Energy Certified RECs | Reporting, customer requirements, and documentation | 5 MWh minimum, one time purchase with a product content label |
Which option should you choose?
Choose the one time purchase if you want to match a year of home electricity in a single step, the subscription if you prefer a steady monthly plan, and the Green-e option if you need independently certified documentation or have a 5 MWh or larger need. RECs address the electricity you use. For emissions from other activities, such as flights, you can add carbon offsets for individuals, and businesses can see carbon offsets for business.
For more news and tips on renewable energy and cutting your footprint, keep reading the Terrapass Footprint Blog.
FAQ: Renewable Energy Certificates
What is a REC?
A renewable energy certificate (REC), also called a renewable energy credit, is a tracked certificate representing the environmental attributes of 1 megawatt hour of renewable electricity delivered to the grid. Each REC has a unique ID number so only one buyer can claim it.
How many kWh is one REC?
One REC equals 1 megawatt hour, or 1,000 kilowatt hours. The average US residential customer used 865 kWh per month in 2024.
Do RECs change the electricity I receive?
No. The electricity at your home is the same mix the grid delivers. A REC gives you the right to claim that renewable generation equal to your RECs has been matched with your electricity use, and it provides revenue to renewable generators.
Are RECs the same as carbon offsets?
No. A REC represents 1 megawatt hour of renewable electricity, while a carbon offset represents 1 metric ton of CO2 equivalent reduced or removed. They serve different purposes and are often used together.
What can I say if I buy RECs?
You can accurately say that you purchased RECs to support renewable generation equal to your electricity use. Avoid saying that RECs offset your emissions or make your electricity carbon free, and note that the FTC Green Guides call for renewable energy claims to be accurate and qualified.
Who buys RECs?
States and utilities buy them to meet renewable energy requirements, and businesses, institutions, and individuals buy them voluntarily to support renewable energy and match their electricity use.
Are RECs changing for businesses in 2026?
The GHG Protocol is proposing hourly matching and deliverability requirements for RECs used in market based Scope 2 reporting. They are still proposals, a final standard is expected in 2027, and verified RECs remain valid under the current standard.
How much do RECs cost at Terrapass?
At the time of writing, Terrapass offers Renewable Energy Certificates to individuals at $8.00 per MWh, as a one time purchase or monthly subscription. Check the product page for current pricing.
Which Terrapass REC option should I choose?
Choose the one time purchase to match a year of home electricity use, the monthly subscription for a steady plan that starts at 1 MWh per month and can be changed or canceled anytime, or Green-e Energy Certified RECs if you need independently certified documentation for reporting or a customer requirement.
What is the minimum purchase for Green-e Energy Certified RECs?
The minimum purchase is 5 RECs, which is 5 MWh or 5,000 kWh. Purchases are retired on your behalf and processed in the annual Green-e Energy Verification Audit.
Sources:
U.S. Energy Information Administration, residential electricity prices and monthly consumption
U.S. EPA, renewable energy certificates
U.S. Department of Energy, the power grid
Green Places, GHG Protocol Scope 2 changes and GHG Protocol consultation announcement
Green Building Law Update, FTC Green Guides and renewable energy claims and Utility Dive, Green Guides review
California Energy Commission, clean energy serving California
Terrapass, personal RECs, monthly subscriptions, and Green-e Energy Certified RECs
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