Renewable energy credits in Colorado

What are Renewable Energy Credits?

Renewable Energy Credits (RECs) is an accreditation system for the production of renewable energy (often 1 credit = 1 megawatt hour (MWh) of electricity) to support achieving state or regional renewable energy portfolio goals. These credits can be traded on an open market– often bought and retired by regulated polluting industries like utilities who are mandated to offset their climate emissions and sold by renewable energy producers which can include homeowners with rooftop solar systems.

You can learn more about the national context of renewable energy credits on our national Solar Renewable Energy Credits (SREC) page.

Learn the basics

What is the status of Colorado’s REC market?

There is not much of a REC market in Colorado, in part because the economics of renewable energy are increasingly favorable and is rapidly eclipsing the state’s Renewable Portfolio Standard. If someone did want to take advantage of the market, they would want to register them and sell them on a voluntary market like the Western Renewable Energy Generation Information System (WREGIS). Since there is already a large supply of individual or ‘unbundled’ RECs, the pricing can be very low ($1-$2/MWh). This would amount to just a few dollars a year for a typical solar homeowner.

Should I ‘relinquish’ my RECs to my utility?

While you are contributing to making your electric grid more renewable, the utility can’t technically take credit for that production unless you agree to relinquish your ownership of the credits to them. Once obtained, the utility will ‘retire’ the credit to count toward their renewable energy goals. Given the continued downtrend of renewable energy pricing for utilities, it is unlikely we’ll see utilities otherwise purchasing your credits over building their own renewable infrastructure for the foreseeable future. Of course, everyone has different goals when they install solar and we always recommend you consult your financial adviser to determine the best decision for your needs.

For more information on the REC process, check out this VOX article.