SREC Solar: What They Are and How They Work

1. SREC Solar: What They Are and How They Work Have you ever considered earning money from your solar panels besides lowering your electricity bills? If you live in a state with an SREC solar market, you may be able toearnincomeby sellingsolarrenewableenergycertificates, orSRECs. AreyoucuriousaboutSRECs, renewableenergycreditsandhow theyfunction? Inthisarticle,wewill go overallthedetailsconcerningSRECs,includingtheir description, generationprocess,tradingprocedures, andpossibleearnings. WhatisanSREC? SREC, or Solar Renewable Energy Certificate, is a financial mechanism that indicatesthepositiveimpactofproducingsolarpower.Yoursolarsystem generatesoneSRECsolarforevery1,000 kilowatt-hours(kWh) ofelectricity.For example, ifyoursolarsystemproduces5,000kWhofelectricity eachyear,you willreceivefiveSRECs. Youshouldunderstandthatyoursolarpanelsproduceelectricity andSRECs separately.Thismeansyoucan useallofthesolarpanelelectricityyougeneratewhile stillcollectingSRECs.YoucanalsosellyourSRECstoutilities orotherbuyers whoneedtomeettheirrenewableenergyobligations. What'sthe differencebetweenSRECs and RECs? SRECsandRECsarecertificatesthatshow thepositiveimpactofgenerating renewableelectricity. However, therearesignificantdifferencesbetween thetwo.

2. SREC solarisonlyconnectedtosolarenergy, whereasRECscancomefroma varietyofrenewablesources, includingwind,hydro,biomass, andothers. • SRECsareonlyavailableinstatesthathaveadopteda solar carve-outpolicy. • ThispolicyincludesaspecificrequirementforsolarenergyintheRenewable PortfolioStandards(RPS). • Onthe otherhand,RECsare accessibleinanystate withanRPS,which • requires utilitiesto generateaparticularpercentageof theirelectricityfrom renewable sources. • SRECs are usually more valuable than RECs because solar panel energy is moreexpensiveandlessabundantthanotherrenewablesources.Thepriceof • SRECs depends on the supply and demand of the market as well as state regulations.RECshavea lowerandmorestablepricebecausetheyaremore widelyavailableandless regulated. • To recap, SRECs and RECs are both methods to promote renewable energy and reduce your environmental effect; but, SRECs are more specialized, limited, and profitablethanRECs. • Whatisthe purpose ofSRECs? • SRECsareinexistencetohelputilitiesfulfiltheirrenewableportfoliostandards (RPS), whicharestateregulationsmandatingutilities togenerateaspecificportion of theirelectricityfrom renewablesources.Over30states haveimplemented renewable portfoliostandards. • Apartfromgeneratingrenewableenergythemselves,utilitieshavetheoptionto purchaserenewableenergycertificates(RECs)tomeetthesestandardsandavoid penalties. • SREC solarisatypeof RECthatutilitiescanpurchasetocomply withtheirstate's renewableportfoliostandards.Thisisimportantbecauseonlyafew statesrequirea certainportionofrenewableenergytocomespecificallyfromsolarpower,which isknownassolarcarve-outs. • InwhichstatestheSRECS solarareavailable? • Notallstateshave a renewableportfoliomandate, andthosethat domaynot include a solarcarve-out.ThefollowingstateshaveactiveSRECmarkets: • Here's a table displaying the key features of SREC programs across different states. The data is sourced from DSIRE and World Population Review. The table consists of thefollowingcolumns:

3. State:Thename of the statewithanSRECmarket. • RPS Target: The required percentage of electricity sales from renewable sources by a specific year, as per the state's Renewable Portfolio Standard (RPS). • SolarCarve-Out:Themandatedpercentageofelectricitysales fromsolar sourcesbyacertainyear, aspartoftheRPS criteria. • SACP: TheSolarAlternativeCompliancePayment,which isthepenalty • thatelectricitysuppliersmustpaypermegawatt-hour(MWh)iftheyfail to meet theirsolarRPSobligation. • SRECPrice: Theaveragepriceof an SREC inthestatemarket,asof • February2024. • SRECLifetime: Thedurationforwhich anSRECcanbeutilizedfor complianceafteritsgeneration. • Letme breakdowntheinformationaboutthetableinsimplerterms: • Think of it like this: if the RPS target and solar carve-out are higher in a state, there will be a greater demand for SRECs. This increased demand leads to a higher price for SRECs. • Similarly, iftheSACP(solaralternativecompliancepayment)ishigher,electricity suppliersare morelikelytobuySRECsinsteadofpayingthepenalty.Thisalso drivesupthepriceof SRECs. • Furthermore, if the SREC lifetime is longer, SREC owners have more flexibility to sell their SRECs when the price is favourable. This increases the potential value of the SRECs. • HowcanyourSRECsbe sold? • SellingyourSRECscanbeaneasyprocess,butitwilldifferdependingonwhere youliveandthespecificprotocolsinplaceinyourstate.Herearethe mainsteps youcantake,butbesuretoconductsome research particulartoyourlocationto ensure you'refollowingtherightprocess. • A.Registerforyour state'sSRECprogram. • Onceyour PV solarsystemisinstalledinyourhome,youmustregisterwithyour state's SREC tracking system. The specific system used will vary by state, so consulttheDatabaseofStateIncentivesforRenewablesandEfficiencyorconduct an onlinesearchfordetailsonyourstate'sprogram.

4. Makesureyouonlyregisteronofficial.govwebsites. Incertainsituations,your solarinstallationcompanycan handle theregistrationforyou. Generatesolarpower fromyourhome Afterregistering,you'llneedtowaituntilyoursolarpowersystemhasgeneratedat leastoneSREC.Thistypicallytakesaroundtwotothreemonthsfor a standard system. Findabuyerfor yourSREC: This stage can be extremely involved, depending on your current status. HomeownersinSRECstatestypicallylocate brokersorcollectors onlinetoassist them sell their SRECs. Some well-known choices include SREC Trade, Sol Systems andmanymore. YoucanalsoregistertosellyourcreditsbypostingontheGATS(Generation AttributeTrackingSystem)bulletininthemajorityofSRECstates.Thisbulletin mightalsohelpyouunderstandthesupplyanddemandinyourarea. Negotiatea selling price. After locating a buyer, you may need to negotiate a price based on supply and demand.Brokerscan helpyoudeterminethehighestfairmarketpricetoaskfor. Completethetransaction: Tocompletethetransaction,youwillneed touseyourstate'sSRECtransfer program.Whetheryouengagewitha brokeroraplatformthathandlesSREC transactions, theprocessshouldbe ratherstraightforward. Thereisn'taperfecttimetosellSRECssincepricesfluctuateregularly.Demandis usuallyhighestinAprilandMaywhencompanies needtoshow theyhavemetthe RPS goalsduringthelatespringorearlysummercomplianceperiodsinmost states. It is best to track SREC solar values throughout the year and sell when the price is at its highest. Ideally, seek to sell when the price is near to the ACP, though timing the selling can be difficult. Remember to sell your SRECs before they expire, even if itmeansofferinga reducedprice. Conclusion:

5. Tosummarize,SRECsolarallowssolar panelowners tomakemoneybyselling certificatesfortheirsolarenergyproduction.Understandingthe marketand specificsofSRECsallowshomeownerstooptimizetheirfinancialreturnswhile alsopromotingrenewableenergy. SRECsareworthmorethanstandardRECs, particularlyinjurisdictionswithsolarrequirements. Wantto savemoney andtheenvironmentwithsolar?Findoutmoreaboutour residentialsolarservices here. Alternatively, useoursolarestimatetooltoreceive a quoteinminutes.