What Are Solar Renewable Energy Credits (SRECs)?
Switching to solar energy is not just a way to lower high energy bills but also an opportunity for solar owners to reap more financial benefits. Solar Renewable Energy Credits are one of the popular solar incentives for those who install a solar energy system. These tradeable credits not only promote shifting to clean energy but also offer monetary benefits by selling SRESs. In states with SREC markets, homeowners can generate and sell these credits to utilities, creating an additional revenue stream.
In this article, we will highlight what SRECs are, and how homeowners can generate and sell SRECs to maximize their solar savings.
What is a SREC?
Solar renewable energy certificates are performance-based solar incentives, also known as SRECs. These credits allow homeowners to gain more from the solar energy they generate at home. As a homeowner, you can earn 1 SREC for each 1,000 kWh (megawatt-hours) of power your solar system produces. Explore best solar states.
Renewable portfolio standards (RPS) are state regulations that require utilities to generate a specific percentage of their electrical power from renewable energy sources. These requirements are the reason why SRECs are in place. To meet these RPS standards, utilities purchase Renewable Energy Certificates (RECs). RECs act as a receipt of work done by a utility that has generated renewable electricity on its own or has purchased it from other parties so that the utility can associate the generated electricity with its energy-generation capability. It is simply a REC that is focused on solar energy.
How do homeowners earn SRECs?
Earning SRECs is a very simple process if you live in a state of SREC market. Homeowners who install solar panel systems begin producing electricity right away, and for every 1,000 kilowatt-hours (1 MWh) that the system generates, they are awarded one SREC. The amount of generated SRECs depends on the size of the solar panel system and the power that the system generates. A larger system will generate more electricity and more solar renewable energy certificates one can earn. Learn more about our efficient residential solar systems.
What are the advantages of SREC for homeowners?
There are multiple benefits to earning SRECs beyond just financial incentives:
Income Generation:
Homeowners can sell their SREC for hundreds to thousands of dollars a year, significantly reducing the time it takes to recover their investment in solar. Learn about the cost of solar installation.
Regular Cash Flow:
Most homeowners sell their SRECs every few months or once a year or, translating into a reliable and consistent source of additional income.
No Extra Effort is Required:
Following the installation of a solar system, SRECs are a source of passive income, which can be realized through brokers or aggregators.
How do you sell your SRECs?
In states where there is a market for SRECs, you will usually work with an SREC aggregator or broker (such as SRECTrade) to monetize your SRECs rather than selling your certificates to a utility directly. There is an active market where solar system owners can sell their SRECs to utility companies and energy suppliers. In Washington DC, the value of SRECs is high, often ranging from $300 to $400 per SREC (sometimes even higher). Homeowners can choose any of the following methods for selling their SRECs:
SREC Brokers:
A broker helps homeowners sell their SRECs for a fee. This is a stress-free, and low-cost method homeowners can use to sell their SRECs.
SREC Aggregators: :
Aggregators bundle SRECs from multiple homeowners and sell them in bulk, often at a higher price. This method is popular among homeowners because it’s straightforward and hassle-free.
Direct Sales :
Some homeowners choose to sell their SRECs directly to the utility company through an SREC marketplace. This approach; though, requires possessing some industry knowledge.
Which states have SREC markets in the U.S.?
A solar carve-out may not be available in states that have renewable portfolio standards, and those that do may not even have one. Depending on where you live, a 10 kilowatt (kW) Solar panel system will produce, on average, 110-163 Mega Watt Hours (MWh) of power for one year, or 11-16 Solar Renewable Energy Certificates (SRECs). This can, in turn, boost solar’s financial reinvestment in some of the states. The following are the states with SREC markets include:
Washington DC:
Washington DC offers a great way for solar panel owners to boost their income by selling SRECs. In the DC SREC market, SREC prices remain high due to undersupply. Explore latest SREC price in Washington DC market
Maryland:
SRECs in Maryland allow homeowners and businesses to reap benefits from their solar energy systems. The Maryland SREC program is only open to facilities with a Maryland address. Solar water heating systems located in Maryland also qualify to generate SRECs. Check out current MD SREC price here
Pennsylvania:
A major driving factor in the growing trend of solar in PA is the Solar Renewable Energy Certificate market. The price of SRECs in Pennsylvania is relevantly rising due to market supply and demand, an increase in the production of solar energy in Pennsylvania, and the need from utilities for enough RP for compliance with RPS. Get the SREC in PA market price
Virginia:
These credits have become a vital source for encouraging the adoption of solar energy in Virginia as the demand for renewable energy sources rises. Explore Virginia SREC market for prices
Delaware:
SRECs in the Delaware market are the key opportunity for solar energy systems owners to generate income from clean energy sources. Thus, by knowing the mechanism of trading with SRECs, keeping up-to-date on the market shifts and amendments, as well as solar incentives, one can improve the ROI of solar investments. Learn more out DE market for SREC trading
New Jersey:
New Jersey is also among the states having market for solar certificates. If you live in NJ, switching to solar and earning from you investment is an opportunity for you.
For the homeowner, Solar Renewable Energy Certificates (SRECs) provide an opportunity to the homeowners to make money on their solar investment. Whether engaging in open bid tests, entering into a long-term contract, or doing business with an aggregator, SRECs are an added, reliable stream of income that makes a positive impact in achieving sustainable energy solutions. So, if you are a homeowner with solar panels, be sure to take full advantage of SRECs. It is a win-win for both your wallet and the environment.
A certified solar installer can help you to choose a best solar solution and produce maximum energy and more SREC. Get a FREE consultation from SolarSME’s energy experts Now!
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