Renewable Energy Certificate (REC) records the environmental attributes of one MWh of electricity generated from renewable energy (RE) sources. It is used as a market-based instrument or, in a sense, a form of energy commodity. It can be purchased by electricity consumers (companies or individuals) and sold by power companies or developers. Once it is sold, it can’t be purchased again and has an expiry date. Its attributes include the place of generation, the type of renewable resources, and the generation date. REC’s purpose grows eminent when the prices are high enough to incentivise the developers, hence encouraging more RE investment.  

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This op-ed was published in the SolarQuarter Indonesia Annual Edition 2024. The original article can be found here.