What are I-RECs? A Complete Guide to International Renewable Energy Certificates

As businesses around the world work toward net-zero targets and renewable energy commitments, one question often comes up:

How can a company claim to use renewable electricity if all electricity on the power grid gets mixed together?

The answer lies in International Renewable Energy Certificates (I-RECs).

What are I-RECs?

An I-REC (International Renewable Energy Certificate) is a globally recognized energy attribute certificate that represents the renewable characteristics of 1 megawatt-hour (MWh) of electricity generated from eligible renewable energy sources and delivered to the electricity grid.

Instead of representing the physical electricity itself, an I-REC represents the environmental attributes associated with renewable electricity generation. Organizations can purchase and retire these certificates to support renewable energy generation and substantiate renewable electricity claims.

Why are I-RECs needed?

Electricity generated from different sources, including solar, wind, hydroelectric, natural gas, and coal, is transmitted through a common electricity grid.

And once electricity enters the grid, it becomes physically impossible to distinguish whether the electricity powering a building originated from renewable or conventional sources.

This creates a challenge for organizations that want to:

• Support renewable energy generation

• Demonstrate renewable electricity consumption

• Meet corporate sustainability targets

• Report renewable energy usage transparently

Since electricity cannot be traced physically after entering the grid, organizations require a credible accounting mechanism.

That's exactly what I-RECs provide.

What does an I-REC represent?

One I-REC represents:

• 1 megawatt-hour (MWh) of renewable electricity

• Generated from an eligible renewable energy source

• Delivered into the electricity grid

Eligible renewable energy technologies typically include:

• Solar power

• Wind energy

• Hydropower

• Biomass

• Geothermal energy

• Other approved renewable energy sources

The certificate does not represent ownership of the electricity itself.

Instead, it represents the renewable energy attributes associated with that unit of electricity.

Understanding I-RECs with a Simple Example

Imagine depositing ₹10,000 into your bank account.

Once the money enters the banking system, the exact currency notes aren't reserved specifically for you.

When you later withdraw money, you receive different notes, but your account records prove that your deposit exists.

Electricity works similarly.

Once renewable electricity enters the power grid, it mixes with electricity generated from all other sources. It's impossible to identify which electrons eventually reach your office, factory, or facility.

An I-REC acts as the official record confirming that an equivalent amount of renewable electricity has been generated and supplied to the grid on your behalf.

This accounting system allows organizations to credibly claim renewable electricity consumption without requiring physical delivery of renewable power.

How does the I-REC system work?

The I-REC lifecycle follows a transparent process designed to ensure credibility and prevent double counting.

Step 1: Renewable Electricity Is Generated

A renewable energy project, such as a solar farm or wind power plant, generates electricity and supplies it to the national electricity grid.

Step 2: I-RECs are Issued

For every 1 MWh of eligible renewable electricity generated and verified, one I-REC is issued. Each certificate contains information such as:

• Renewable energy technology

• Generation date

• Country of origin

• Project details

• Unique certificate identification number

Step 3: Organizations Purchase I-RECs

Businesses purchase I-RECs to support renewable energy generation and document their renewable electricity consumption.

Step 4: Certificates are Retired

Once an organization uses an I-REC to make a renewable electricity claim, the certificate is retired.

Retirement permanently removes the certificate from circulation, ensuring that no other organization can claim it.

This retirement process is what prevents double counting and maintains the integrity of the system.

Why do Companies Purchase I-RECs?

Organizations purchase I-RECs for several strategic reasons.

1. Demonstrate Renewable Electricity Consumption

I-RECs enable organizations to substantiate claims regarding renewable electricity use through a recognized accounting mechanism.

2. Strengthen Sustainability Reporting

Many companies use I-RECs to support disclosures related to renewable energy consumption within broader sustainability reporting frameworks.

3. Advance Corporate Sustainability Goals

Organizations working toward renewable energy targets often use I-RECs as part of their broader sustainability and decarbonization strategy.

4. Access Renewable Energy where direct Procurement isn't Possible

In many regions, businesses cannot directly purchase renewable electricity due to market or infrastructure limitations.

I-RECs provide an alternative mechanism for organizations to support renewable energy generation and account for renewable electricity consumption.

A Practical Example of I-REC Usage

Consider a manufacturing company that consumes 10,000 MWh of electricity each year.

Although the company wants to use renewable electricity, its local electricity market doesn't allow direct renewable power procurement.

Instead, the company purchases 10,000 I-RECs. Those certificates represent 10,000 MWh of renewable electricity generated and supplied to the electricity grid.

After the certificates are retired, the company can account for an equivalent amount of renewable electricity consumption using a recognized energy attribute certificate system.

This allows the organization to support renewable energy generation while strengthening its sustainability reporting.

Benefits of I-RECs

Using I-RECs offers several advantages for organizations pursuing renewable energy and sustainability objectives.

• Supports renewable energy generation

• Enables credible renewable electricity claims

• Helps prevent double counting through certificate retirement

• Improves transparency in renewable energy accounting

• Supports sustainability reporting and disclosure

• Offers flexibility where direct renewable procurement isn't feasible

• Contributes to corporate renewable energy strategies

Are I-RECs the Same as Renewable Electricity?

No.

This is one of the most common misconceptions.

Renewable electricity refers to the electricity generated by renewable energy sources.

An I-REC, on the other hand, represents the renewable attributes associated with that electricity, not the physical electricity itself.

This distinction allows renewable electricity to flow freely through the shared electricity grid while its environmental attributes can be tracked and claimed separately.

Conclusion

As organizations accelerate their transition toward cleaner energy, I-RECs have become an important mechanism for supporting renewable energy generation and accounting for renewable electricity consumption.

By representing the renewable attributes of electricity rather than the electricity itself, I-RECs enable businesses to make transparent, credible renewable electricity claims, even in markets where direct renewable energy procurement isn't possible.

So, whether you're developing a renewable energy strategy, improving sustainability reporting, or working toward corporate climate goals, understanding how I-RECs work is an essential step in your sustainability journey.

At Sustainiam, we help organizations simplify renewable energy certificate management, project registration, and environmental markets through our Certificate Issuance Platform (CiP), making renewable energy procurement and certificate management more transparent, efficient, and scalable.