Solar Renewable Energy Certificates (SRECs) in Pennsylvania Market Trade Guide
Solar trend in Pennsylvania is booming driven by environmental goals and economic incentives. A major driving factor in this growth is the Solar Renewable Energy Certificate market. SRECs are the credits for solar power generation, enabling the system owners to get the added value for solar panel installation. This guide aims to explore the SREC in the PA market for homeowners, businesses, and investors.
We will discuss how SRECs are created, SREC market prices, and effective ways to maximize SREC earnings. Customers can maximize the financial returns on their solar investments with SREC trading. Also, they contribute to a sustainable energy future by understanding the technical details PA SREC market.
What are Solar Renewable Energy Certificates (SRECs)?
SRECs are tradable financial products that directly relate to the environmental benefits of one MWh of electricity generated from solar energy. When a solar energy system produces electricity, it also generates SRECs. These are also traded separately from the generated electricity. These certificates encourage the adoption of solar energy as they are an additional source of income for solar system owners. The utilities buy Solar Renewable Energy Certificates to meet state mandatory targets known as renewable portfolio standards. By purchasing SRECs, they balance their non-renewable energy production to fulfill legal requirements. Besides, selling SRECs are not only a source of earnings but also reduces the payback period of solar investment. Explore how homeowners earn SRECs!
How do SRECs work in the PA market?
The state witnessed a rapid increase in the installation of solar systems due to several federal and PA state incentives, including SRECs. Additionally,Pennsylvania policy for permitting out-of-state systems to register and participate in the PA SREC market until 2017 also impacted supply. Act No. 40, however, was passed and went into effect on October 30, 2017. It restricts the geographical eligibility for the PA SREC market to solar photovoltaic systems in Pennsylvania.
What is the market price of SRECs in the PA 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. The effective price for the SRECs in the PA market stands at $35 for a bid in August 2024. SREC prices are useful for estimating the profitability of solar energy system investors’ investments.
What are the PA SREC market requirements for trading?
The following are the requirements for trading SREC in Pennsylvania:
Solar Requirement:
The SREC market requirement for the PA market is 0.5% of total electricity in 2021 by solar.
Meter Readings:
Facilities without a revenue grade meter, connected before May 18, 2017, without assistance from the PA Sunshine program, and with a DC capacity of less than 15 kW may generate SRECs from estimated generation based on PV Watts. A facility must use actual, metered production if the facility is equal to or greater than 15kW, has a revenue-grade PV meter, or if the facility has adjustable tilt PV modules or laminate PV modules, or if the facility was interconnected on or after May 18, 2017. In addition, estimates are not allowed if the facility already has metered generation processed by PJM-GATS, as stated in the GATS Operating Rules, Section 6.3.3 Section d.
Eligibility Start Date:
The eligibility date is based on the month of application to the PennAEPS.
Solar Alternative Compliance Payment (SACP):
If power suppliers do not submit the required quantity of SRECs by the end of each compliance period, they will be compelled to pay a penalty known as the Solar Alternative Compliance Payment (SACP). The average price that power providers pay for SRECs (solar AECs) in the year is 200% of the PA SACP.
SREC Useful Life:
SRECs in the PA market are good for 3 years; that is, an SREC from 2024 compliance periods is in 2024, 2025, 2026.
How to trade SREC in the Pennsylvania market 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 including DC, PA, MD, VA 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 SRECTrade 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.
Solar Renewable Energy Certificates (SRECs) play a crucial role in Pennsylvania’s renewable energy landscape. They provide financial incentives for solar system owners, drive solar adoption, and contribute to the state’s environmental goals. Understanding the SREC market, its mechanisms, and its benefits is essential for anyone involved in the solar industry in Pennsylvania. As the market continues to evolve, SRECTrade and similar platforms will be instrumental in helping stakeholders navigate and maximize the opportunities within this dynamic market.
For more information on solar energy and SRECs in Pennsylvania, Solar SME is the best local company to contact in state. Our consultants can assist in the analysis of the financial initiatives and the benefits of SREC certification and trading of SRECs. Book your FREE consultation!
