The financial rewards obtained for owning solar panels include an incentive you have most likely come across in your research called Solar Renewable Energy Credits (SRECs). Homeowners and businesses who own photovoltaic systems can receive a sizable income by selling their SRECs in state markets. Equally as important to getting the best financial results from your system are the available options for selling SRECs, in addition to understanding these valuable commodities.
In states like Maryland, Delaware, Pennsylvania and DC included, electricity suppliers are required by law to buy a certain amount of SRECs to meet a state’s renewable generation target known as renewable portfolio standards (RPS). The best way to understand how SRECs work is to learn about state RPS requirements which are the driving force behind a state’s renewable energy growth.
SRECs are created from your solar arrays producing solar energy into the grid. Here are some useful facts:
- SRECs are non-tangible certificates (a.k.a credits) that are considered the currency of renewable energy, and are bought and sold online through an intermediary, often referred to as aggregators.
- 1 megawatt-hour (1,000 kilowatt-hours) of electricity produced by a solar energy system represents one SREC that enters the market.
- SREC prices vary by state and are determined by supply and demand. The more demand from utility suppliers, the higher the price, which can significantly improve the financial returns on your installation.
- Washington, DC is leading the SREC market with the highest prices in the country.
- SRECs are sold separately from the electricity.
Your options for selling SRECs
Once your system has been certified and registered, you can then choose from a few options for selling SRECs in which it produces. Typically, your solar installer will facilitate this process by providing the required information to an aggregator. Note: commercial and residential properties share the same process for selling SRECs.
- Search for a buyer. Enter into an agreement with an aggregator or broker like uspvinc.com or solsystems.com who will sell your SRECs directly to the utility on your behalf, for a small portion of your profits. You will avoid cumbersome paperwork and some market risk. Or you can make those arrangements online at trading sites for buying and selling SRECs like SREC Marketplace and SRECTrade in which you can create an account with rather user-friendly features.
- Sell your SRECs upfront. Sell the rights of all of your SRECs through a solar installer or a financing company for immediate returns on your installation. Your payout for your SREC will be a single, lump sum payment after which you will not be eligible to participate in the SREC market.
- Do it yourself. Sell them on a self-managed account such as Flett Exchange that has low fees and no contracts. Selling them yourself means you must accept possible future fluctuations in the market.
These options for selling SRECs serve as an additional source of income or financing of your solar panels. It all depends on your financial needs and the risk you are willing to take. Learn more on how to maximize the profits from your solar panels with a free consultation that’s just a click away!