Prices for the certificates vary considerably from region to region. Because there's less demand for them, certificates on the voluntary market tend to be far lower than those in compliance markets. The U.S. Environmental Protection Agency reported that prices for certificates on the voluntary market fell from $1.20/MWh in 2010 to $0.35/MWh in 2016; meanwhile, prices in the compliance market soared to around $60/MWh.
Because RECs are tradable, they offer opportunities for arbitrage. In the PJM market, which coordinates power for much of the mid-Atlantic region of the United States, demand exceeds supply, causing higher prices. In the Electric Reliability Council of Texas (ERCOT) market, supply typically is much greater than demand, so prices are low.
How do RECs differ from offsets?
A renewable energy certificate is not a carbon offset. Offsets measure the amount of carbon dioxide (CO2) emissions that are avoided and can be used for any type of generation or emission. Renewable energy certificates are measured in megawatt-hours and are only used for electricity and emissions from purchased electricity.
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