SRECs deliver ongoing income generation.
Separate and additional to the value from creating your own electricity and saving by reducing or eliminating power costs, Solar Renewable Energy Credits (SRECs) provide additional income. Combining reduced electric bill payments and periodic revenue from selling your credits gives you a greater return on your solar investment.
Solar Renewable Energy Certificates (or Credits), abbreviated SREC, are created as any solar energy system generates electricity. In Pennsylvania legislation defines Solar Alternative Energy Credits (SAEC), although most people continue to refer to SRECs within the state.
By definition 1 SREC = 1 MWh of solar electricity. In metering and billing units that would be 1,000 kWh. The SREC value is derived from law in the following way:
- Each state issues a Renewable Portfolio Standard (RPS), requiring most utilities to provide a specified amount (%) of renewable energy.
- The utilities have the option to install capacity or to pay to meet the requirements. The homeowners’ SRECs tend to be the better value, and most states have very active trading markets between SREC owners and buyers. Alternately, compliance payments can be made. Essentially penalties, these are more expensive.
SRECs in New Jersey
New Jersey has a decades long history from establishing its first RPS and creating valuable SRECs. As one of the most mature markets in the U.S., the state legislature has modified and amended the programs multiple times. As recent as 2018, New Jersey boosted its RPS. While this significantly increases the state’s renewable energy and solar energy targets, it also clearly signals a future replacement for the SREC program. That has not been fully defined as yet.
Currently, newly installed solar power systems still qualify for 10 years of guaranteed SREC value. Being a more mature market, there has been a shift in the balance of the supply of SRECs to the utility needs for compliance in favor of the utilities. In addition, the states policy has consistently placed the penalties (compliance fees) on a slowly declining scale. In general, over time these factors have resulted in decreasing value for each SREC. However, the New Jersey SREC marketplace continues to produce top revenue in the U.S.
SRECs in Pennsylvania
In contrast to New Jersey, Pennsylvania has more recently enacted requirements and created the SREC marketplace. By comparison, the market values are much lower. A good deal of this is attributed to the earlier rules that allowed credits created by nearby out of state solar energy systems to be traded on the Pennsylvania market. The state has recently remedied that through what has been labeled Act 40. The Pennsylvania PUC clarified this new solar law.
The good news is that most see it as a good sign that this new law could be just the start. There is evidence of high public interest to further improve renewable energy policy in the state. Many expect that SREC values in Pennsylvania will continue to rise to some degree in the near future.
Trading SRECs
Exact Solar is proud to partner with SRECTrade, one of the largest SREC transaction and management firms in the industry, with over 470 MW of solar assets under management. The company provides you with all needed brokerage services. Exact Solar handles all the paperwork to get you up and running so you can start turning your SRECs into income.
Unique software developed by SRECTrade is used by solar owners to track their SREC generation and issuance, manage and execute transactions, and enroll facilities with state regulators.
Exact Solar also recommends Knollwood Energy, one of the earliest SREC aggregators in the country. Established in 2006, the company set out to represent only SREC sellers. They aim to maximize sales prices by bundling customers into large institutional sellers. Small and large solar energy generators alike benefit from this approach.
Whichever SREC broker you choose, Exact Solar will help with your account setup so you will be making money from your SRECs quickly and with no stress.
