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American Sentry Solar By American Sentry Solar • April 6, 2016

What Are SRECs (Solar Renewable Energy Credits)?


 

Solar renewable energy credits may often seem complex and difficult to understand. However, they’re one of the great incentives you receive when you purchase and own your solar energy system. Along with solar tax credits, you will not receive SRECS if you choose to enter into a lease or PPA agreement.It’s vitally important for homeowners to understand at least in simple form what they’re forfeiting and handing over to leasing and PPA companies.


Solar renewable energy credits

What is a Solar Renewable Energy Credit?

Once your solar power system has been installed and starts generating power, you will receive one credit for every 1,000-kilowatt hour that’s produced. I find it best to think of it as receiving a token every time your solar system generates a certain amount of power. Once you have these credits or “tokens” you can then sell them, which we will discuss in a later section.

Why Do SRECs Exist?

We have solar renewable energy credits due to a law that was passed to ensure utility companies are creating a certain portion of renewable energy. This law/mandate is the “Renewable Portfolio Standard” or more commonly referred as “RPS”. Instead of these various utility companies creating renewable energy projects themselves, they can buy the credits or “tokens” that your solar powered home has produced to fulfill the necessary requirements they must meet. This transaction takes place in an open SREC market that works similarly to trading stocks or commodities.

Where Can You Sell Your SRECs?

You may sell your SRECs in a couple different ways.  Depending on the solar installer, they can purchase the SRECs directly from you.  However, an online trading platform such as SRECTrade or Flett Exchange is a common choice among homeowners.  For a more in-depth look at the pricing for SRECs in the year 2015 check out this short video.

 

After merely scratching the surface on the topic of solar renewable energy credits you should be able to conclude that SRECs are one of the great bonuses for homeowners that choose to purchase and own their solar power system. Take the next step and choose to own your piece of the sun!

 

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