As more companies in Singapore focus on cutting carbon emissions and meeting sustainability targets, the question of how to source renewable energy has become increasingly important. Whether your business is large or small, choosing the right procurement method can make a big difference.
Two of the most popular options are the Power Purchase Agreement (PPA) and the Green Energy Certificate (REC). Both are recognised methods of supporting clean energy—but each comes with different benefits. In this article, we’ll compare the green energy certificate and the PPA in terms of cost, risk, traceability, and suitability to help you decide which is better for your business.
What Are Green Energy Certificates (RECs)?
A green energy certificate, or Renewable Energy Certificate (REC), is proof that 1 megawatt-hour (MWh) of electricity was produced from a renewable source like wind, solar, or hydropower. Buying a green energy certificate allows your company to claim the environmental benefits of clean energy—even if your electricity still comes from the main power grid.
There are two types of RECs:
- Bundled RECs: Bought together with the physical electricity
- Unbundled RECs: Bought separately, used mainly to offset emissions
In Singapore, RECs must comply with SS 673, a national standard that ensures certificates are genuine and traceable. According to the Sustainable Energy Association of Singapore, RECs offer businesses a flexible, scalable way to support the growth of renewable energy without needing to install their own systems.
What Are Power Purchase Agreements (PPAs)?
Power Purchase Agreements (PPAs) are long-term contracts that allow a business to buy electricity directly from a renewable energy provider. These contracts usually last between 10 to 25 years and help companies lock in a stable price for clean energy.
Types of PPAs include:
- Physical PPAs: Where the energy is supplied directly through the grid
- Virtual PPAs: Where the energy is sold to the grid, but the environmental benefits (RECs) go to the business
The International Renewable Energy Agency (IRENA) explains that PPAs are often used by larger organisations looking for price stability and a strong link to specific renewable energy projects.
RECs vs PPAs: Key Differences
1. Cost and Budget Flexibility
A green energy certificate is typically less costly upfront. Businesses can buy what they need based on their energy usage or sustainability targets—there’s no need to commit to a fixed contract.
PPAs, however, involve more planning and often require legal, financial, and operational review before they are signed. While they can offer long-term savings, they are more suitable for businesses with stable energy demand and the capacity to manage a long-term deal.
2. Risk Exposure
RECs are relatively low-risk. You buy verified certificates without worrying about price fluctuations or operational performance.
PPAs carry greater risk, including energy market changes, contract issues, and supplier reliability. However, they also provide the benefit of fixed energy pricing over time.
3. Traceability and Environmental Impact
PPAs offer stronger traceability because the energy is usually linked to a specific renewable project. This can be helpful for reporting and corporate sustainability communication.
RECs are verified and tracked via official registries but may not always connect to one specific project—unless purchased as part of a bundled option.
4. Suitability for Different Businesse
For small or growing companies, RECs are ideal. A green energy certificate allows flexibility and shows climate commitment, even if you lease your premises or have a limited budget.
PPAs are better suited for larger organisations with consistent energy needs and long-term sustainability plans.
How to Choose the Right Option
When deciding between a green energy certificate and a PPA, think about your business goals, energy use, and available resources.
RECs provide flexibility and are easy to purchase in smaller quantities. They’re perfect for meeting Green Mark requirements or achieving environmental goals without major changes to your operations.
PPAs, while more complex, are ideal for companies that want to invest long-term in renewable energy with a stable pricing model and more direct environmental benefits.
The Energy Market Authority (EMA) in Singapore notes that businesses play a key role in supporting national sustainability goals—and choosing the right procurement method is an important step.
Final Thoughts
Both the green energy certificate and Power Purchase Agreement are powerful tools in supporting renewable energy. RECs provide cost-effective flexibility, while PPAs offer long-term impact and direct project support.
No matter which you choose, your contribution supports a more sustainable energy future. And at Asiarecs, we’re here to make that choice easier, smarter, and perfectly suited for your business.
Why Work With Asiarecs
At Asiarecs, we help businesses of all sizes navigate the world of renewable energy with clarity and confidence. Whether you’re new to green energy or ready to scale up your commitment, we’ll help you make the most informed decision.
We offer both green energy certificate solutions and customised Power Purchase Agreements—fully compliant with SS 673 standards in Singapore. Our services are designed to support traceability, flexibility, and long-term value.
Let us guide you in choosing the best clean energy approach to suit your operations and sustainability goals. With Asiarecs, you get more than a solution—you gain a partner on your journey to net-zero.
