The District of Columbia has had an incredible year in solar energy and there’s still a few months left. In recent years, solar arrays have been popping up on rooftops of residential and commercial properties, providing clean energy and helping people save hundreds of dollars on their electricity bills each year. A major influence in DC’s solar boom is the competitive price of solar panels compared to surrounding states, even before the 30% tax credit and incentives. And with an installation comes a profitable commodity for solar owners called solar renewable energy credits (SRECs).
What are solar renewable energy credits?
As an owner of a solar energy system, you can join the SREC program. These are virtual credits (or certificates) from which your system earns when it produces 1,000 kWh of energy.
1 SREC = 1 Mwh of solar electricity.
To estimate how many SRECs your system will produce in a given year, all you have to do is multiply the size of your system by 1.2. So, a typical 5-kilowatt system, for example, will produce an annual average of 6 SRECs.
Encouraging solar development with SRECs
SRECs are worth money on the open market, which is sold to and purchased from your utility supplier. Utilities are required by law (as stated in the Renewable Portfolio Standards agreement as part of DC’s solar carve-out) to buy SRECs from you up front — whether you’re a business or homeowner — which helps to lower your installation costs. Or they can be sold annually to provide an ongoing revenue stream, but either way, the value of SRECs in DC is very attractive to potential solar customers.
How do I sign up for solar renewable energy credits in DC?
Normally, solar companies can facilitate the registration of your installation with the Public Service Commission (PSC) for you, but some don’t offer this option. Once the PSC approves your application (the process could take up to 30 days), you’ll be ready to sign up for the Generation Attribute Tracking System (GATS). In this way, your solar energy output will be monitored along with the solar renewable energy credits that your system will be earning.
How do SRECs power your wallet?
DC’s SREC market is strong and one of the most robust in the country.
Good news for DC residents: SREC prices are currently $435-$440per certificate. So if your system produces 6,000 kWh, you would have created 6 SRECs, and at today’s prices, you could sell those for $2,640! There are a few ways in which you can sell your SRECs:
- Sell your credits as generated for cash.
- Take an upfront payment for all your future SRECs (at a discount to current spot market prices)
- Sell your SRECs into a long-term contract.
- Sell your SRECs yourself on the market with proof of production supplied by your utility provider.
The concept of selling SRECs can be the most confusing part of solar energy. But their importance represents too much of a vital source of revenue to miss out on when going solar. Contact us to receive more information on SRECs.