Renewable Energy Credit: A Basic Definition and its Principles

1. Renewable Energy Credit: A Basic Definition and its Principles The concept of renewable energy has become common in the United States and many other countries across the world. Renewable energy credit or REC is basically a certification or credential conforming to the ecological characteristics of energy generated from renewable sources like solar or wind. Renewable energy credits were produced as a way to keep tabs on advancement in the direction of and abidance with the Renewable Portfolio Standards (RPS) of the government, intended to underpin a neater generation blend. Renewable energy credits should not be mixed up with green energy tax credits or tax credits that renewable energy ventures are entitled to get. As a constituent of the new economic stimulus package in the United States, there are fresh Energy Rebate Programs ready. At present, solar energy qualifies for a federal tax credit of 26% for solar PV (photovoltaic) systems installed in 2020. Renewable energy credit is one of the two principal yields or gains from the generation of new energy from renewable sources. Renewable energy production generates real power in the shape of electricity. Besides, there are ecological advantages to our society or the general public from green energy generation. Some of the salient benefits include the following:

2. Curtailing pollution Reducing the rate at which non-renewable fuel resources are consumed The selling of real power takes place within the local grid. Besides, the selling of the public yields takes place as RECs or Renewable Energy Credits. Sale of Renewable Energy Credits is performed individually in the form of a product in the marketplace. Though renewable energy credits are not essentially a quantity of energy, every REC embodies one MWh (megawatt hour) of renewable source- produced energy. For every renewable energy credit bought, the consumer is entitled to the corresponding megawatt-hour of power discount in the form of a counterbalance to their formal power consumption. Since renewable energy credits offer a supplementary flow of income to renewable energy ventures, they are fundamentally a grant intended to sanction eco-clean energy resources to frugally contend with fossil fuel-oriented resources. The antagonists of RECs underscore that by buying renewable energy credits, a consumer can be entitled to an emissions “discount” despite they don’t essentially cut down their end- consumption in the least. Rather, it has been witnessed that they hike it on certain occasions. The advocates of renewable energy credits retort that a higher number of REC procurements generate an enhanced output of renewable energy that can substitute traditional power generation. The two principal forms of the tax credit for green energy 1) Federal solar tax credit The federal solar tax credit, also termed as the Investment Tax Credit (ITC), permits you to take away 26% of the expenditure of setting up a solar energy apparatus from your federal taxes. The Investment Tax Credit is applicable for both housing and business setups. Besides, there’s no cap on its price. One of the most interesting things is that the cost of solar energy is coming down throughout the US.

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