REC — Renewable Energy Certificate
Texas Electricity Glossary
A Renewable Energy Certificate (REC) is a tradeable certificate that proves one megawatt-hour (1,000 kWh) of electricity was generated from a renewable source — primarily wind in Texas, but also solar, geothermal, and biomass. REPs purchase RECs to offer "100% renewable" or "green" electricity plans to consumers. When you enroll in such a plan, your REP buys RECs equal to your total annual usage, providing a financial return to renewable generators. The actual electrons delivered to your home cannot be physically traced to a renewable source — the Texas grid is shared — but the REC system is the standard mechanism for renewable accounting in deregulated markets.
How RECs Enable "100% Renewable" Plans in Texas
Texas operates a competitive REC market called ERCOT's Renewable Energy Credit (REC) tracking system. When a wind farm in West Texas generates 1 MWh, it earns one REC. That REC can be sold separately from the electricity itself — the electricity flows into the ERCOT grid, and the REC is sold to a REP that needs to demonstrate renewable content for its consumer plans.
A REP offering a "100% wind" plan buys enough RECs to match every kWh its customers consume annually. This creates demand for renewable generation and provides a revenue stream that supports the economics of new wind and solar projects.
Texas Wind and REC Prices
Texas is the largest wind power state in the country, generating more wind electricity than many countries. The abundance of wind capacity means Texas REC prices are among the lowest nationally — often under $1 per MWh. This is why many Texas renewable plans are priced similarly to conventional plans: the REC cost is a small add-on.
What to Look for on a Green Plan's EFL
The EFL for renewable plans must disclose the percentage of renewable content and the source (wind, solar, etc.). Plans claiming "100% renewable" must have 100% REC coverage. Some premium plans specify RECs from specific Texas wind projects; others buy from any qualifying source. Check the EFL's "Renewable Content" section before enrolling.
Related Terms
- Net Metering Texas — for solar owners generating their own renewable electricity
- EFL — discloses renewable percentage for every Texas plan
- ERCOT — the grid where Texas renewable generation and RECs are tracked
- REP — purchases RECs to offer renewable plans
Frequently Asked Questions
What is a REC in Texas electricity?
A REC (Renewable Energy Certificate) is a tradeable certificate representing 1 MWh of electricity generated from a renewable source — wind, solar, geothermal, biomass, or hydropower. In Texas, RECs are used by retail electric providers to back "100% renewable" electricity plans. When you enroll in such a plan, your REP purchases RECs equal to your annual usage, effectively supporting renewable generation even though the electrons delivered to your home cannot be physically traced to a specific generator.
Are Texas "100% renewable" electricity plans actually green?
Yes — through the REC mechanism, which is the industry-standard way of accounting for renewable electricity in deregulated markets. Purchasing RECs funds renewable energy generators and provides a market signal for new renewable capacity investment. In Texas, wind and solar generation has expanded dramatically partly because the REC market creates revenue for generators. However, if you want to ensure your consumption is directly matched by renewable generation in real time, look for plans that specify real-time matching or direct power purchase agreements (PPAs) rather than standard REC purchases.
Do Texas "100% renewable" plans cost more?
Texas REC prices are low by national standards because the state has so much wind capacity that REC supply is abundant. Many Texas REPs offer 100% renewable plans at prices competitive with or only slightly above standard plans. The REC purchase is often a small fraction of the total plan cost. Compare total monthly costs on TexasPowerCost.com to see how renewable plans stack up against conventional options for your ZIP.