Solar Renewable Energy Certificates (SRECs) in Maryland: All You Should Know
If you switch to solar in Maryland, you might have heard about Solar Renewable Energy Certificates (SRECs). SRECs in Maryland allow homeowners and businesses to reap benefits from their solar energy systems. Besides saving up to 90% on your energy bills, SRECs reward you for every MWh of electricity the solar energy system generates. These certificates can be sold to utilities or traded in the SRECTrade market hence earning extra cash. Maryland is among the best states to benefit from SRECs because of its commitment to renewable energy.
In this article, we will explore Maryland SREC market, its benefits, and how businesses and homeowners can take advantage of these energy credits.
What are Solar Renewable Energy Certificates (SRECs)?
Renewable energy certificates (SRECs) are exchangeable credits that indicate the advantages of producing one megawatt-hour (MWh) of power using solar. In addition to electricity, a solar energy system that provides power creates SRECs. The excess energy can be exported to the grid. On the other hand, you can sell SRECs to utilities and other power providers. Concerning limitations on supply and demand, the market determines the value of an SREC. Suppliers of electricity who must meet their solar RPS obligation can purchase SRECs. Any electricity suppliers who fail to meet the required number of SRECs must pay a fee or solar alternative compliance payment (SACP), which caps the market.
What is the life cycle of Solar Renewable Energy Certificates?
The SREC life cycle guarantees that you obtain credits for the clean energy and compensated, promoting the ongoing adoption and economic advantages of renewable energy. Here’s the SREC life cycle in four steps:
- Generate electricity with your solar panels
- Register your previous month’s production on SRECTrade
- SRECs will create and appear in your SRECTrade account automatically as they are issued by the registry.
- SRECTrade will sell your SRECs, and you receive a payment within 15 business days.
Solar Renewable Energy Certificates (SRECs) in Maryland: How does it work?
From the market’s start in 2008 until early 2015, a proactive state government and strict SREC standards maintained this market. But starting in 2015, a massive solar capacity added in the state. This resulted to an oversupply in the Maryland SREC market. Governor Hogan’s veto of the 2016 Clean Energy Jobs Bill, which calls for a modest increase in the state RPS starting in 2017, voided by the Maryland General Assembly early in 2017.
The Maryland SREC program is only open to facilities with a Maryland address. Solar water heating systems located in Maryland also qualifies to generate SRECs.
What is the market price of SRECs in Maryland?
The effective price for the SRECs in Maryland stands at $53 for a bid in August 2024. However, this price varies depending on market circumstances such as the supply and demand factors. SREC prices are useful to estimate the profitability of the investment of solar energy system investors.
What are the MD SREC market requirements for trading?
The following are the requirements for trading SREC in Maryland:
Solar Requirement:
Maryland’s SREC market requirement is set as 2.50% of the total electricity generated from the solar energy sources for the year 2020.
Meter Readings:
All solar energy systems must have a revenue-grade meter installed to measure the produced electricity. The meter readings need to be taken every month. Also, It is important to submit the Meter Serial Number Report to maintain compliance and to allow the issuer to issue correct SRECs.
Eligibility Start Date:
The eligibility start date for a system to register its SRECs is the system’s date of interconnection or the beginning of the current calendar year. For instance, a system interconnected in November 2024 and applied in February 2025 will be eligible for SRECs from the beginning of the year, January 2025.
Solar Alternative Compliance Payment (SACP):
The SACP is the penalty that is charged to electricity suppliers who fail to provide the required number of SRECs at the end of the particular compliance period. In Maryland, the SACP was initially set at $400 per SREC until 2014 but there was a planned reduction in the following years to cut costs.
SREC Useful Life:
An SREC created in Maryland has a useful life of 3 years. For instance, an SREC generated in the year 2024 can be used for compliance with the RPS of the years 2024, 2025, or 2026.
How to trade SREC in Maryland with SRECTrade?
SRECTrade, Inc. is an environmental commodity management and transaction platform that makes complex markets transparent, equitable, and accessible. SRECTrade has been active in more than 10 North American renewable energy and clean fuel markets within over 20 commodities; as of now, the total amount of transactions it has made is over $600,000,000.
Steps to Trade SRECs with SRECTrade
Install Your System: Start by installing your solar energy system. SRECTrade interacts with different installation companies. Typically, you can sign up for their EasyREC service through your installer. However, if your installer does not provide this service, you can register at the SRECTrade company’s website.
Sign Up with SRECTrade: If you register your system with SRECTTrade then it will be easier to get your system connected with other regulatory authorities. SRECTrade takes care of all the processes so that you can start producing and selling SRECs quickly.
Understand the Timing: The first SRECs for your system will be generated after two months of system setup. However, if your system is in Massachusetts, the period will be up to six months. This delay accounts for the necessary registration and certification processes.
In this way, you will be able to enter the SREC market through SRECTrade enjoying their knowledge and effectively serving to enhance your participation in selling SRECs.
The SREC market in Maryland is a vital component of the state’s renewable energy strategy, providing financial incentives for solar energy generation and helping utilities meet their renewable energy obligations. Despite challenges such as market volatility and administrative complexities, the benefits of SRECs in promoting solar adoption and reducing greenhouse gas emissions are substantial. As Maryland continues to strive towards its renewable energy goals, the SREC market will undoubtedly remain a key driver in the transition to a cleaner, more sustainable energy future. By understanding and participating in the SREC market, Maryland residents and businesses can contribute to this effort while reaping the financial rewards of generating solar energy.
