We all want more renewable energy. It’s a good thing. And we want to talk about its benefits. Renewable energy generators, sellers and customers want to promote their environmental actions. Generators should be able to say they generate renewable energy and renewable energy buyers should be able to say they’re consuming renewable energy. The goal is to do this in a manner that protects consumers and doesn’t jeopardize renewable energy certificate (REC) contracts.
The issue
When you sell a REC, you are essentially selling the claiming rights, reporting rights and environmental attributes (e.g. emissions avoided) associated with renewable energy generation. REC contracts are jeopardized when two parties are claiming the same environmental attributes — known as double counting. Accurate marketing by renewable energy sellers protects their REC sales and reduces the risk of double counting and consumer deception.
Example: If you sold the REC to Party A and the power to Party B, do not use language that gives Party B the impression that he/she is consuming renewable electricity or the associated environmental benefits. Party B has no right to claim any use of renewable energy. If you’re telling both Party A and Party B that they’re both receiving environmental benefits from the same MWh of renewable energy, then that is double counting.
The solution
Below are some best practices for renewable energy sellers that help avoid the risk of double counting:
- If you do not legally own the REC, don’t make a claim about the renewable energy — where it goes, who buys it or who is benefiting. If you do not make a claim, there is no chance of double counting.
- Limit the scope of your marketing statements so they do not exceed the RECs you are keeping. The scope of your claims should not overlap with the scope of your REC sales. If you want to talk about the benefits of the renewable energy, it must be done accurately. Do not claim to receive any environmental benefits of the renewable energy unless you own the REC.
- Match the volumes: If you own 100 percent of the RECs from a project and are retiring those RECs for yourself, then you can make claims about consuming 100 percent of the renewable benefits. However, if you’ve sold some or all of the RECs, then your marketing claims should not exceed the REC volumes you are keeping for yourself.
- Match the time periods: If you are keeping the RECs in Year 1 and selling the RECs in Year 2, then your marketing in Year 1 should not state or imply that you are using renewable energy in Year 2.
- If you sell some or all of the RECs, then say so. If you put out a press release or highlight a project profile on your website that describes the renewable energy your project is generating (and this is a project from which you’re selling the RECs), then include a statement to that effect. By doing so, you won’t give the wrong impression that renewable energy is going someplace it’s not. For example: “Hotel Acme has solar panels that generate clean, renewable energy. Some or all of the renewable energy is sold to others.”
Perhaps the biggest takeaway for REC sellers is to be thoughtful about language use surrounding REC claims. Open, direct and honest communication between REC sellers, REC purchasers and electricity purchasers will help uphold the integrity of REC contracts.
Additional resources:
- Federal Trade Commission’s Guides for the Use of Environmental Marketing Claims (Green Guides). See sections 260.4 and 260.15.