REC, or Renewable Energy Certificate, is a market-based instrument that represents proof that one megawatt-hour of electricity was generated from a renewable energy source, such as solar, wind, or hydropower. These certificates help promote the use of renewable energy by allowing energy producers to sell the environmental benefits of their energy generation separately from the actual electricity. When businesses or individuals purchase RECs, they can claim to support renewable energy, even if they are using conventional energy sources. This system encourages investment in renewable energy projects and helps reduce greenhouse gas emissions, contributing to a more sustainable energy future.