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Understanding The SREC Marketplace And How To Get Started

Saving money on energy is the overarching goal for investing in a solar array – that is common knowledge. Yes, solar gives you access to free electricity. But did you know other programs have been created to monetize renewable energy? The specific ways in which solar saves you money are details worth discovering.SREC Marketplace

If you have thought about going solar you probably know about the federal tax credit, but are you aware of the renewable portfolio standard (RPS)? The renewable energy credit market formed in response to this EPA initiative for states to prioritize renewable energy production. This is beneficial for many reasons:

  1. Cut pollution caused during the creation and use of gas, coal, and petroleum.
  2. Curb spending on fossil fuels, which are dwindling in availability.
  3. Eliminate wasteful current loss that occurs during transmission from plant to user.

The portfolio standards put to public utility companies require they either produce a satisfactory amount of power with clean energy, or symbolically pay for renewable energy created privately. That is where residential and commercial property owners factor in. Solar Renewable Energy Certificates (SRECs, pronounced S-recks), are not paper certificates rather they are theoretical credits that represent one Megawatt hour of renewable energy production. In addition to the energy you use, the power company will still credit you with certificates that you can sell in the SREC marketplace. Like airline miles, as you produce renewable energy, you accumulate SRECs that can be sold.

Once you commit to going solar, there are only a few steps between you and the SREC marketplace:

Have your system certified. The process involves an inspection and filing paperwork. Each state has their own rules and processes for certification. The best solar energy contractors have dedicated staff who specialize in filing the appropriate paperwork to get your home or commercial property in business with a turnkey system. The steps required by Maryland are typical of other states:

Interconnection application – petition identifying the property owner and the basic attributes of the system. Identifying the size of your array helps agencies to keep accurate green energy statistics, too.

Electrical inspection – an authority must sign off on the solar array.

Building inspection – some counties also require a separate inspection to deem the building suitable.

Meter installation – a net meter tracks your electricity production and use. The net meter tracks excess power fed back into the grid and the utility company will pay fair market price every billing cycle for any surplus.

List your SRECs for sale: As the rightful owner of your electricity production, you have a say in how you make money on your SRECs. Many producers use an SREC broker, and your solar contractor will facilitate this process, and some prefer using SREC Marketplace because the experience is much like using an online auction site; it has a simple fee structure and many tools to make the transaction easy for both buyers and sellers.


How is pricing determined? Sellers on SREC marketplace set their own prices. Just like other online marketplaces, the natural laws of supply and demand affect your success. Sellers can check real time market prices for each state and set list prices accordingly.

Are there restrictions placed on the SREC marketplace? The policies that will affect solar energy producers the most are policies outlining where you may sell your certificates. Most states on the east coast allow property owners to sell solar energy credits in the state of origin as well as another adjacent state. For example, Maryland solar system owners can use the markets in Maryland and Pennsylvania.

Is the process for selling SRECs different for commercial and residential properties? Electricity is electricity, and the renewable credit marketplace does not differentiate.

Knowing how the renewable energy credit market works and why it exists opens up a whole other aspect of the benefits of going solar. Entering the game is as easy as scheduling a solar evaluation for your property.

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