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USA Renewable Energy Certificates (RECs)


The market for renewable energy in the USA comprises two
types of demand, one for the compliance market and another for the voluntary
one. On the one hand, States’ policies, better known as Renewable Portfolio
Standards (RSPs), require utilities to supply a fraction of their electricity from
renewable sources. (Environmental Protection Agency, 2010; Environmental
Protection Agency, 2010; Environmental Protection Agency, 2010) Each state
separately specifies the energy resources or technologies eligible in their
jurisdiction and describe how electricity service providers must comply. To
comply with their obligations within RPSs, utilities can use Renewable Energy Certificates
(RECs). On the other hand, the voluntary market is driven by the preference of
the consumer for specific energy sources. The voluntary market allows consumers
to go beyond the policy requirements and opens the opportunity for them to
reduce the environmental impact linked to their electricity use. Therefore,
RECs have an important role in supplying the swiftly increasing demand within
the voluntary market. In order to both markets can coexist and maximize their
effect in the national grid, it is important that the voluntary market is incremental
to the mandatory market.(Environmental Protection Agency, 2018)

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