Solar Renewable Energy Certificates, also known as Solar Renewable Energy Credits, or SRECs for short, offer a compelling financial incentive for homeowners with solar power systems. If you’re a homeowner exploring the benefits and incentives of installing a solar panel system, this guide will help you understand what SRECs are, how they work, and how they can increase the return on your solar investment.
What are Solar Renewable Energy Certificates (SRECs)?
Solar Renewable Energy Certificates are tradable credits that represent the environmental benefits of generating electricity from a solar energy system. Essentially, they serve as proof that a certain amount of electricity was generated using solar power. Utility companies and other electricity suppliers purchase SRECs to meet state-mandated renewable energy targets, making them a critical part of state-level renewable energy policy, especially in states like New Jersey and Pennsylvania.
How do SRECs work?
SRECs are created when a solar panel system produces electricity. Homeowners can then sell these certificates and generate income. Here’s a step-by-step breakdown of how the entire process works:
Installation and registration
When a solar panel system is installed on your property, a revenue grade meter is installed to record solar production. The system then needs to be registered with an SREC tracking system or similar agency within your state. This usually involves providing detailed information about your system’s capacity and location, among other things. At Public Service Solar we handle the registration and account creation for you, ensuring your system is compliant and eligible to earn SRECs from day one.
Generation of SRECs
Once your system is registered, powered on and producing energy, you will earn one SREC for every MWh, or 1,000 kilowatt-hours (kWh) of electricity your system produces. The SREC tracking system verifies the amount of electricity generated by your solar panels. Once verified, the system credits you with the corresponding number of SRECs.
Selling SRECs
SRECs can then be sold to utility companies looking to meet state-mandated renewable energy requirements. Rather than selling SRECs directly to the utility provider, homeowners will normally have their account connected to an SREC aggregator within their state who facilitates these transactions. Once per month homeowners can enter the reading from their meter into an online portal, which is linked to their bank account. Each time 1 full MWh of solar production has been entered, a direct deposit is initiated from the utility company to the homeowner.
Benefits of SRECs
Financial incentives
One of the most important benefits of SRECs are the financial incentive they provide. By selling SRECs, homeowners can significantly offset the initial costs of installing a solar panel system and potentially generate additional income over time. This greatly increases the financial return on your solar investment.
Supporting renewable energy
By participating in the SREC program, homeowners contribute to the broader goal of promoting renewable energy and reducing reliance on fossil fuels. This helps combat climate change and fosters a cleaner, more sustainable environment.
Compliance with Renewable Portfolio Standards (RPS)
Many states have established Renewable Portfolio Standards (RPS), which require utility companies to generate a certain percentage of their electricity from renewable sources. Utilities purchase renewable energy certificates (RECs), also known as renewable energy credits, from various sources to meet these requirements. Purchasing SRECs is one of the main ways utility companies can meet these requirements without having to generate the renewable energy themselves.
How to maximize you SREC earnings
Research your state’s SREC program
The availability and specifics of SREC programs can vary by state. It’s essential to research the program in your state to understand the requirements, application process, and potential financial benefits. Useful resources include state energy offices, utility companies, as well as reputable solar installers in your state.
Install a solar panel system with optimal design
To participate in the SREC program, you’ll need to install a solar panel system on your property. Consider working with a certified solar installer who can guide you through the installation process and ensure your system meets all necessary standards. At Public Service Solar our process begins by using satellite technology to generate an initial (completely free) estimate for the size and cost of your system, based on your home’s location and the surrounding areas. Our team will then come out for an in-person assessment to confirm all measurements and system details with you, and answer any other questions you may have. This ensures your solar system is designed to maximize your energy production and efficiency.
Monitor your system’s production
Once your system is up and running, it’s crucial to monitor its electricity production regularly. This ensures that you accurately report your generation to the SREC tracking system and receive the correct number of credits. Public Service Solar provides 24/7 full system monitoring, so you can take comfort knowing there is always a second set of eyes making sure your system is operating properly.
SREC account setup and system monitoring done for you
Public Service Solar provides complimentary SREC account setup for all our solar customers so you don’t have to worry about whether you entered all the technical system details correctly. With 24/7 monitoring, homeowners can rest easy knowing all they need to do is enter the number from their meter each month and get paid.
States with notable SREC programs
New Jersey
New Jersey is known for having one of the most robust SREC markets in the United States. The state’s SREC program has been instrumental in driving the adoption of solar energy among homeowners. By participating in New Jersey’s SREC market, homeowners can earn significant financial rewards for their solar energy production. Click here to learn more about NJ solar incentives.
Pennsylvania
Pennsylvania also boasts a well-established SREC program. Homeowners in Pennsylvania can benefit from selling their SRECs to utility companies and other buyers looking to meet their renewable energy obligations. The state’s program offers a stable and lucrative opportunity for homeowners to monetize their solar energy investments. Click here to learn more about PA solar incentives.
Conclusion
Understanding Solar Renewable Energy Credits (SRECs) is essential for homeowners looking to invest in solar energy. By participating in SREC programs, you can enjoy significant financial incentives while contributing to the growth of renewable energy. Remember to research your state’s specific program beforehand so you have proper expectations, and to diligently track your electricity production and system efficiency to maximize your benefits.
Ready to make the switch to solar and start earning SRECs? Contact Public Service Solar today to get a free estimate on your home, and take the first step towards a cleaner, greener and more financially rewarding future.
