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Solar renewable energy certificates (SRECs)
Solar renewable energy certificates (SRECs) are a performance-based solar incentive that allow you to earn additional income from solar electricity generation. As a homeowner, you can earn one SREC for every megawatt hour (MWh), or 1,000 kilowatt hours (kWhs), of electricity your solar panel system generates.
SRECs exist because of state regulations known as renewable portfolio standards (RPS), which require utilities to produce a specific percentage of their electricity from renewable resources. To meet these requirements, utilities purchase SRECs: these certificates serve as proof that they have either produced renewable electricity themselves or paid someone who is producing renewable electricity for the right to “count” that green electricity as their own generation.
Common questions
How much money are SRECs worth?
The selling price of an SREC largely depends on the state you live in. A few major factors go into determining the price of an SREC, including supply and demand in the market and any state-mandated alternative compliance payments (ACPs) utilities need to pay if they don’t meet the standards set by the RPS.
A 10 kilowatt (kW) residential solar panel system will produce about 10 to 13 MWh of electricity, therefore earning somewhere between 10-13 SRECs annually. To give you an idea of state-by-state variability in SREC benefit, 13 SRECs means an additional ~$5,000 in savings in D.C., but only $130 in Ohio.
Where are SRECs available?
As of 2022, the areas with dedicated SREC markets include:
- Washington D.C.
- Delaware
- Illinois
- Maryland
- Massachusetts*
- New Jersey
- Pennsylvania
- Ohio
- Virginia
*Note: Massachusetts stopped accepting new system owners into their SREC program in late 2018.
How do I sell my SRECs?
As a SREC generator, it’s uncommon to sell certificates to utilities directly. Instead, you’ll most likely work with an aggregator or broker (like SRECTrade or SolSystems) to monetize SRECs. These brokers offer a variety of different ways to sell your SRECs, giving you as little or as much control over the sale price as you’d like (e.g. fixed SREC plans, selling on the spot market, requiring owner approval before sale, etc.)