- Date: February 5th, 2026 | Report | 7 Pages
This report by Eric O’Shaughnessy, Ph.D. is the result of a series of interviews in 2023 of renewable energy market stakeholders and follow-up interviews in 2024 with four large renewable energy developers about the financial impact of renewable energy certificates (RECs) on project development. The interviews highlighted that common financial models underestimate how RECs influence U.S. project development and mischaracterize REC prices, transaction costs, and revenue risk. The developers state that RECs routinely help close “missing money” gaps, with REC values in all‑in power deals often embedded as implicit prices representing roughly 5–25% of project revenues—far above typical market benchmark prices. Developers also report that most REC revenues flow to projects while transaction costs are modest and shrinking.
The report reflects that simplified project‑level models miss intertwined REC and power revenues, bundled contracting, and the longer‑term market‑stabilizing role of growing REC demand. It calls for multi‑method approaches that integrate financial, econometric, and market‑based analysis grounded in developer experience. This report was made possible through the financial support of CRS.
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