What are renewable energy certificates (RECs)?

RECs, as defined by the Environmental Protection Agency, “[are] market-based instrument[s] that represent the property rights of the environmental, social and other non-power attributes of electrical generation. RECs are issued when one megawatt hour (MWh) of electricity is generated and delivered to the electrical grid from an eligible renewable energy source.” (epa.gov) In the United States, RECs can be traded as a commodity.