What is an SREC?

SRECs, or Solar Renewable Energy Certificates, are a tradable commodity that allows the owners of solar power systems to get cash payments for every 1000 kiloWatt hours, or 1 megaWatt hour, of electricity produced. This is separate from the power that is net-metered to the utility from your system. SRECs were created by some states as part of their Renewable Portfolio Standards: utilities required to source a certain percentage of their energy from renewables can fulfill their RPS requirements by buying SRECs from producers like you and me. SREC prices are not fixed, but vary widely by state, from less than $10 to more than $200. High SREC prices can mean your system turns profitable much more quickly.

Seven states now buy SRECs: New Jersey, Pennsylvania, Delaware, Washington DC, Massachusetts, Maryland, North Carolina, and Ohio. Clean energy producers in Michigan, Illinois, Indiana, Kentucky, West Virginia and Virginia can sell their SRECs into other states that buy them. These commodities can be sold through many different channels, including auction, exchanges, and various kinds of brokers. For more detailed information about SRECs, see our article.