I-RECs, CELs, or Carbon Credits? How to choose the right environmental incentive for your solar portfolio

Do you have a solar portfolio and heard about I-RECs, CELs (Mexico-only), or carbon credits? You’re not alone. Many developers across Latin America are looking to monetize the environmental impact of their systems, but don’t know where to start. In this blog, we break down what each of these instruments is, how they differ, and which one might be the best fit for your portfolio.

I-RECs: Fastest path to monetize renewable energy

International Renewable Energy Certificates (I-RECs) certify that a renewable energy system generated 1 MWh of electricity. They are part of a voluntary international market, widely used by companies with decarbonization targets (such as RE100 or SBTi) to reduce their Scope 2 emissions.

Issuing I-RECs is relatively straightforward. Sites are registered through I-TRACK (valid for five years), and certificates are issued regularly based on energy generation. In markets like Mexico, I-RECs are growing rapidly thanks to nearshoring and the demand from global buyers seeking renewables in their supply chains.

If your project is already operational, remotely monitored, and you’re looking for a simple and quick way to generate additional income, I-RECs may be your best option.

CELs: Better prices, harder to access

To date, very few distributed generation projects have successfully issued CELs (Clean Energy Certificates) in Mexico. CELs were created by the Mexican government to incentivize renewable energy generation within the regulated electricity market. Like I-RECs, each CEL represents 1 MWh of renewable electricity, but operates under rules defined by Mexico’s Energy Regulatory Commission (CRE).

CELs are purchased by certain actors in the Mercado Eléctrico Mayorista (MEM), known as “participantes obligados,” who are legally required to cover at least 13.9% of their consumption with clean energy or CELs.

In theory, distributed generation projects are eligible to issue CELs. In practice, access is very limited. Why?

• The process is complex, costly, and poorly documented.

• Sites must pay administrative fees and install special meters, which can cost over USD $1,000 per site, making it unviable for smaller systems.

• CELs can only be commercialized through the  ‘Suministrador’ that represents each clean energy site.

  
  

On top of that, the market has stagnated: the 13.9% requirement hasn’t changed in years. That may soon change. Recent reforms to the Energy Transition Law could revise this target and reactivate both supply and demand.

For now, CELs are not a viable option for distributed generators, but it’s worth keeping an eye on future regulatory changes.

Carbon credits: A viable option only if your project is additional

Unlike I-RECs and CELs, carbon credits don’t certify renewable generation. They represent the reduction or removal of 1 ton of CO₂ equivalent and are used by companies to offset residual emissions (Scope 1, 2, or 3).

To issue carbon credits, a project must prove additionality, meaning it wouldn’t have happened without the revenue from carbon finance. For solar projects, this is typically only the case in specific scenarios, such as:

• Off-grid systems

• Installations serving underserved communities

  
  

Projects must also be registered under a standard like Cercarbono, BioCarbon, or similar, and go through an extensive process of validation, verification, and monitoring. The timeline is long—typically 12 to 18 months before generating the first credit, and costs can be significant.

If you’re working in remote or vulnerable contexts, carbon credits can be a powerful tool. But for already-installed, grid-connected systems, qualification is unlikely.

So... Which one fits your project?

At Popular Power, we help solar developers evaluate which incentive mechanism fits best with their technical, commercial, and regulatory reality. Our platform automates the generation of environmental attributes and connects you with high-impact buyers.

Ready to start monetizing your project’s environmental value? Get in touch, we’re here to help.