What to Know About SRECs and Photo voltaic Panels

In sure states, Photo voltaic Renewable Power Certificates, or SRECs, present an incentive to residential photo voltaic prospects. SRECs are separate from grants or photo voltaic tax advantages and provide a monetary profit past the potential financial savings owners would possibly see through the use of their very own photo voltaic power. Right here’s what potential photo voltaic prospects have to find out about SRECs.

SRECs are digital paperwork that certify that power was produced utilizing solar energy. They’re tracked in databases and may be traded or bought, much like shares, as their worth fluctuates with the market. On this manner, owners with photo voltaic panels can earn cash from their photo voltaic methods^[0]

Some states require utility corporations to generate a sure share of their power from sustainable sources (often called a renewable portfolio commonplace). Nevertheless, as soon as electrical energy is added to an influence grid, it’s inconceivable to find out the place and the way it was generated.

These states can use SRECs to trace how a lot power was produced with photo voltaic panels, which helps power suppliers hit their targets and lets customers earn credit for producing photo voltaic power. Presently, eight states and Washington D.C. use SRECs, together with Delaware, Illinois, Massachusetts, Maryland, New Jersey, Ohio, Pennsylvania and Virginia. Different states, like Kentucky, Michigan, Indiana and West Virginia, have areas which are eligible to earn SRECs and promote them in one other state’s market^[0]

How do you earn photo voltaic renewable power credit?

When you might have photo voltaic panels in an eligible state, you earn one SREC for every megawatt-hour (1,000 kilowatt-hours) of electrical energy you generate^[0]

Your system’s output determines what number of SRECs you’ll earn, which relies on how sunny your location is, the angle of your roof and what number of photo voltaic panels you put in.

What are you able to do with SRECs?

State SREC packages differ, however state packages and impartial SREC brokerages assist you to commerce or promote your SRECs. Just like shares, you’ll be able to maintain the SRECs till their worth modifications or promote them for money, permitting corporations to hit their renewable technology targets^[0]

Frequent choices for SRECs embody:

• Preselling SRECs to offset the price of set up. Some state packages like Illinois Shines allow you to pre-sell your SRECs as a part of your set up. As an alternative of receiving a examine to your SRECs, you need to use the worth to defray a few of the price of putting in photo voltaic panels.

• Preselling SRECs for upfront cost. As an alternative of making use of the worth of future SRECs to the price of set up, working with an SREC aggregator permits you to promote the superior rights to your SRECs for the subsequent 15 years. You receives a commission upfront however are hedging that the worth of SRECs received’t go up.

• Locking in an SREC value. In case you’re fearful in regards to the worth of SRECs dropping, you’ll be able to lock in a value for one to 5 years with SREC aggregators.

• Holding and buying and selling SRECs as costs change. You may as well grasp on to your SRECs and promote them when the market worth is greater, however you danger their worth falling sooner or later.