Renewable (also known as "green") power resources - such as wind, solar, and biomass - produce electricity with essentially none of the emissions common to fossil-fueled power plants. To express their support for renewables, some firms and institutions are buying green power, or certificates that reflect its environmental value. Could your firm use these options to "polish" its corporate image?
Because the environmental benefit is independent of end use location, a market has developed in which the environmental attributes of renewable power are quantified and sold separately from the power. The value of the attributes for 1 megawatt-hour (1,000 kWh) of green power has been standardized into the Renewable Energy Credit (REC), also known as a "green tag." Where a typical kWh may sell for $.05/kWh, for example, a green kWh may sell for $.07. The environmental attribute of the green kWh is then valued at $.02. REC prices are quoted by that differential value.