Certificates can be used to support feed-in or purchase obligations, and portfolio standards or quotas.
Some governments have introduced Feed-In or Purchase Obligation systems which require a premium to be paid on all supplied energy; and for this premium to be recycled to specific energy technologies. Such "feed-in" schemes can be enabled by energy certification, which has the advantage of ensuring that the energy is only supported once.
This is because certificates are issued for the energy that qualifies for the feed-in tariff, and these are awarded to the organisation that paid the "feed-in" tariff.
By keeping these certificates in a separate account, the supplier can be assured that the energy is not "double counted".
Feed-in laws and tariffs oblige utilities and electricity transmission system operators to provide grid access to renewable energy plants at a fixed, minimum price. Payment of such a price is higher, and guaranteed over a longer period of time, than the usual market price for electricity. This is justified as it internalises the environmental and socio-economic advantages of renewable energy.
Other governments stimulate renewable energy by placing a legal obligation on energy market participants - producers, suppliers or consumers - to buy renewable energy. Such portfolio standards or quota systems require producers, distributors or consumers to provide a proportion of their energy from renewable sources.
The quota, which is usually kept low when the market is small and gradually increased, is normally allows different technologies to compete. Although mainly used for grid-connected electricity, this can also be used for fuels (e.g. biodiesel and ethanol). The additional costs of renewable energy are usually paid through a special tax, or by a higher price charged to all consumers; and incentives to achieve targets are placed on market parties (they may be penalised if they do not reach their target).
Certification supports quota systems, as certificates can be cancelled to prove that the market participant has met its obligations. An further advantage of quota systems is that they can be linked to international energy certificate trading.