{"id":92,"count":2,"description":"With grid electricity prices soaring, home solar is already a means of substantial energy savings. But homeowners in eligible states can sweeten the deal by selling Solar Renewable Energy Credits (SRECs) to earn hundreds or thousands of dollars each year.\r\n\r\nIn this article, we\u2019ll answer:\r\n<ul>\r\n \t<li>What is an SREC?<\/li>\r\n \t<li>Which states have SREC markets and how to sell them<\/li>\r\n \t<li>SREC prices<\/li>\r\n \t<li>And what happens to SRECs if you move<\/li>\r\n<\/ul>\r\nLet\u2019s get started with the big question.\r\n<h2>What is an SREC?<\/h2>\r\nAn SREC, or Solar Renewable Energy Credit, is given to a homeowner for every MW hour (1,000 kWh) of solar electricity their system generates. For example, a 7kW solar system generating 8.5MWh of electricity per year would earn 8.5 credits annually.\r\n<p style=\"text-align: center\"><strong>1 SREC = 1 MWh of solar production = 1,000 kWh of solar production<\/strong><\/p>\r\nThese credits can be sold to utilities through an open market for prices dictated by supply and demand.\r\n\r\nFor most solar owners, income from selling SRECs won\u2019t provide the bulk of the <a href=\"https:\/\/www.solar.com\/learn\/how-to-calculate-the-roi-of-solar-panels\/\" target=\"_blank\" rel=\"noopener\">savings by going solar<\/a> \u2013 it\u2019s more like the cherry on top of a hot fudge sundae. Although, in certain states, it can be one heck of a big cherry.\r\n<h3>Key terms:<\/h3>\r\n<ul>\r\n \t<li><strong>Renewable Portfolio Standards (RPS)<\/strong>: State regulations that require utilities to generate a certain amount of electricity from renewable sources<\/li>\r\n \t<li><strong>Solar Carve-Out: <\/strong>A policy that requires a certain amount of a state\u2019s renewable energy to come specifically from solar<\/li>\r\n \t<li><strong>Renewable Energy Certificates (REC): <\/strong>Credits utilities can purchase from renewable energy producers to meet their renewable portfolio standards<\/li>\r\n \t<li><strong>Solar Renewable Energy Credit (SREC): <\/strong>One type of renewable energy certificate that specifically represents 1 MW of<em> solar<\/em> electricity production<\/li>\r\n<\/ul>\r\n<h3>Why do SRECs exist?<\/h3>\r\nSRECs exist to help utilities meet renewable portfolio standards (RPS) \u2013 state regulations that require utilities to generate a certain amount of electricity from renewable sources. More than 30 states have renewable portfolio standards.\r\n\r\nIn addition to producing renewable energy themselves, utilities are allowed to buy renewable energy certificates (RECs) in order to meet these standards and avoid paying penalties.\r\n\r\nSRECs are just one type of REC that utilities can buy to meet their state\u2019s renewable portfolio standards. That\u2019s important because only a handful of states require that a certain amount of renewable energy comes specifically from solar \u2013 known as solar carve-outs.\r\n\r\nThese states with solar carve-outs \u2013 and a few others \u2013 are where solar owners can earn and sell SRECs.\r\n\r\nRelated reading: <a href=\"https:\/\/www.solar.com\/learn\/solar-rebates-incentives\/\" target=\"_blank\" rel=\"noopener\"><span data-sheets-value=\"{\" data-sheets-userformat=\"{\">Solar Rebates and Incentives 2023<\/span><\/a>\r\n<h2>Which states have SREC markets?<\/h2>\r\nAs of October 2022, the <a href=\"https:\/\/www.solar.com\/learn\/solar-rebates-by-state\/\" target=\"_blank\" rel=\"noopener\">following states<\/a> have solar carve-outs and SREC markets:\r\n<ul>\r\n \t<li>Illinois<\/li>\r\n \t<li>Ohio<\/li>\r\n \t<li>Pennsylvania<\/li>\r\n \t<li>Virginia<\/li>\r\n \t<li>District of Columbia<\/li>\r\n \t<li>Maryland<\/li>\r\n \t<li>Delaware<\/li>\r\n \t<li><a href=\"https:\/\/www.solar.com\/learn\/new-jersey-susi-program-get-paid-for-your-solar-production\/\" target=\"_blank\" rel=\"noopener\">New Jersey<\/a><\/li>\r\n \t<li><a href=\"https:\/\/www.solar.com\/learn\/massachusetts-solar-rebates-incentives\/\" target=\"_blank\" rel=\"noopener\">Massachusetts*<\/a><\/li>\r\n<\/ul>\r\nMassachusetts' transitioned to the <a href=\"https:\/\/www.solar.com\/learn\/massachusetts-smart-solar-program-complete-overview\/\" target=\"_blank\" rel=\"noopener\">SMART program<\/a> in 2018.\r\n\r\nIn eligible areas of Michigan, Indiana, Kentucky, and West Virginia, it\u2019s possible to sell credits in Ohio\u2019s market, despite the states not having solar carve-outs and SREC markets of their own.\r\n\r\n[caption id=\"\" align=\"aligncenter\" width=\"1200\"]<img class=\"size-medium\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2022\/10\/SREC-markets-map.jpg\" alt=\"SREC market map\" width=\"1200\" height=\"854\" \/> <em>Updated October 2022<\/em>[\/caption]\r\n\r\nThis list is subject to change with state policies. Use the <a href=\"https:\/\/www.srectrade.com\/markets\/rps\/srec\/introduction\" target=\"_blank\" rel=\"noopener\">Solar Markets map on SRECTrade<\/a> to find out if your state has a solar carve-out and an SREC market.\r\n<h2>How do you sell your SRECs?<\/h2>\r\nStrangely enough, SRECs are rarely sold directly to utilities. Similar to stocks, they are typically bought and sold through brokers.\r\n\r\nThe two largest brokers are <a href=\"https:\/\/www.srectrade.com\/\" target=\"_blank\" rel=\"noopener\">SRECTrade<\/a> and <a href=\"https:\/\/www.solsystems.com\/\" target=\"_blank\" rel=\"noopener\">Sol Systems<\/a>. You can think of them like E*TRADE or Robinhood for renewable energy credits. Just like stock brokers, SREC brokers typically take percentage based fees for facilitating your transactions.\r\n\r\nIn order to sell your SRECs on the market, you\u2019ll need to set up a profile with a broker and register your solar system, which may require help from your installer or an inspector.\r\n\r\n<img class=\"alignnone wp-image-7957\" src=\"https:\/\/assets.solar.com\/wp-content\/uploads\/2019\/07\/srec-trade.jpeg\" alt=\"SRECS Trade\" width=\"544\" height=\"126\" \/>\r\n<h3>SREC prices<\/h3>\r\nThe value of an SREC varies $3.50 to nearly $400, depending on the market.\r\n\r\nJust like the stock prices, SREC prices are dictated by supply and demand in the market and tend to fluctuate over time. When there\u2019s an oversupply of credits, prices tend to fall. When there\u2019s a shortage, prices tend to rise.\r\n\r\nFor a 7 kW system generating 8.5 MWh of electricity per year (worth 8.5 credits), a year\u2019s worth of SREC income could range from $29.75 in Ohio to $3,145 in Massachusetts.\r\n<h4>SREC market prices as of October 2022:<\/h4>\r\n<table style=\"height: 554px;width: 116.927%\" width=\"116.927%\">\r\n<tbody>\r\n<tr style=\"height: 80px\">\r\n<td style=\"height: 80px\" width=\"208\"><strong>State<\/strong><\/td>\r\n<td style=\"height: 80px\" width=\"208\"><strong>Market price on SRECTrade<\/strong><\/td>\r\n<td style=\"height: 80px\" width=\"208\"><strong>Market price on Sol Systems<\/strong><\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">Delaware<\/td>\r\n<td style=\"height: 56px\" width=\"208\">N\/A<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$7<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">Maryland<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$59<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$55<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">New Jersey (SREC)<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$233.50<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$215<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>New Jersey (SREC-II)<\/td>\r\n<td>$85<\/td>\r\n<td>$85<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">Ohio<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$3.50<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$4<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">Pennsylvania<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$42<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$40<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 56px\" width=\"208\">Washington D.C.<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$370<\/td>\r\n<td style=\"height: 56px\" width=\"208\">$330<\/td>\r\n<\/tr>\r\n<tr style=\"height: 96px\">\r\n<td style=\"height: 47px\" width=\"208\">Massachusetts (SREC-I)<\/td>\r\n<td style=\"height: 47px\" width=\"208\">$332<\/td>\r\n<td style=\"height: 47px\" width=\"208\">$315<\/td>\r\n<\/tr>\r\n<tr style=\"height: 46px\">\r\n<td style=\"height: 46px\">Massachusetts (SREC-II)<\/td>\r\n<td style=\"height: 46px\">$276<\/td>\r\n<td style=\"height: 46px\">$260<\/td>\r\n<\/tr>\r\n<tr style=\"height: 56px\">\r\n<td style=\"height: 45px\" width=\"208\">Virginia<\/td>\r\n<td style=\"height: 45px\" width=\"208\">N\/A<\/td>\r\n<td style=\"height: 45px\" width=\"208\">$45<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<em>Prices subject to change with market. SRECTrade and Sol Systems did not list market prices for Illinois at the time of writing.<\/em>\r\n\r\nThe value of an SREC also depends on <em>how <\/em>you sell it. For example, on Sol Systems, there are four contract options for selling SRECs:\r\n<ol>\r\n \t<li><strong>Upfront<\/strong>: A one-time lump-sum payment for your expected production (typically over 15 years)<\/li>\r\n \t<li><strong>Annuity:<\/strong> Guaranteed, fixed payments (typically in 3-5 year terms)<\/li>\r\n \t<li><strong>Profit Share:<\/strong> Guaranteed base price per credit, with potential to increase if market improves<\/li>\r\n \t<li><strong>Brokerage: <\/strong>Sell your SRECs each quarter at the highest market rate<\/li>\r\n<\/ol>\r\nIf you take a lump-sum or fixed payments, you risk leaving money on the table if SREC prices improve. If you choose to sell quarterly via brokerage, you risk selling for less if the market declines.\r\n\r\nThe important thing to remember is that it\u2019s all gravy. Solar more than pays for itself in the long run \u2013 SREC income is just an added bonus!\r\n\r\n&nbsp;\r\n\r\n[pnpZip background=true border=true primary_color=\"#8B72D3\" content_texts=true utm_campaign=\"get_started_injectable\" utm_medium=\"SRECs: What are Solar Renewable Energy Credits?\" upper_text= \"Compare quotes\" upper_text_span = \"Today! \" lower_text= \"See how much solar could lower your\" lower_text_span = \"energy costs\" get_started_text = \"Get started\"]\r\n<h3>Alternative compliance payments (ACPs)<\/h3>\r\nAnother thing that influences SREC prices are the penalties utilities pay for not meeting the goals in their renewable portfolio standard. These are known as alternative compliance payments (ACPs), and they effectively set a ceiling for SREC prices.\r\n\r\nAfter all, if the penalty for missing renewable energy goals is cheaper than the cost of meeting them, utilities may choose to take the penalty.\r\n<h2>SRECs if you move<\/h2>\r\nThe average stay in a house is around 16 years and <a href=\"https:\/\/www.solar.com\/learn\/how-long-do-solar-panels-last-a-detailed-review\/\" target=\"_blank\" rel=\"noopener\">solar panels last 25 years or more<\/a>, so it\u2019s not uncommon for homeowners to part with their solar system at some point.\r\n\r\nThe good news is that <a href=\"https:\/\/www.solar.com\/learn\/the-best-remodel-to-increase-your-homes-value\/\" target=\"_blank\" rel=\"noopener\">solar systems typically increase your home value<\/a>, and being in an SREC market can increase it even more.\r\n\r\nMost commonly, the solar system and credit rights are transferred in the sale, and the additional income can be used as leverage during negotiations.\r\n\r\nIn some cases, you may be able to keep your SREC rights and continue to sell your credits even after you sell the house and move.\r\n\r\n<em>Consult a real estate professional for advice about SRECs when you move.<\/em>\r\n<h2>SREC Frequently asked questions<\/h2>\r\n<h3>What does SREC mean?<\/h3>\r\nSREC stands for Solar Renewable Energy Credits. These credits represent 1 Megawatt-hour (or 1,000 kWh) of solar production and can be sold on SREC markets for additional income. SRECs are just one type of renewable energy credit (REC) that energy utilities can buy to meet state requirements for renewable energy production.\r\n\r\nSome states mandate that a certain percentage of energy comes specifically from solar (known as a solar carve-out). These states \u2013 mostly in the northeast \u2013 are more likely to have SREC markets where homeowners can sell credits earned through their home solar production.\r\n<h3>What is an SREC worth?<\/h3>\r\nSREC prices are dictated by supply and demand forces and range from $3.50 to $370 per credit, depending on the market. Prices are capped the penalty imposed on utilities for not meeting their renewable energy goals, known as alternative compliance payments (ACP)\r\n\r\nThe value of an SREC also depends on <em>how <\/em>you sell it. For example, some solar owners choose to take a one-time lump-sum payment for 15-years worth of expected production, while others sell their credits quarterly at the market rate.\r\n<h3>How do I sell my SREC?<\/h3>\r\nSimilar to stocks, SRECs are largely bought and sold through brokers like SRECTrade and SolSystems.\r\n\r\nIn order to earn and sell credits, you may have to set up a profile and register your solar system with the proper authorities.","link":"https:\/\/www.solar.com\/learn\/what-are-solar-srecs\/","name":"SRECs: What are Solar Renewable Energy Credits?","slug":"what-are-solar-srecs","taxonomy":"category","parent":6,"meta":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.5 (Yoast SEO v19.10) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SREC: What is a Solar Renewable Energy Credit? | Solar.com<\/title>\n<meta name=\"description\" content=\"An SREC, or Solar Renewable Energy Credit, is given to a homeowner for every MW hour of solar their system generates. 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