Solar Renewable Energy Credits (SRECS) are a solar incentive state governments sometimes offer.
The program is pretty rare, though -- only seven states have SREC markets. But, since Pennsylvania, Ohio, and Maryland happen to be among the lucky seven, we're frequently asked exactly how one goes about selling SRECs.
Before turning to market mechanics, however, we ought to say something about what SRECs are.
Renewable Energy Targets
Suppose the legislature of some state wanted at least eight percent of its electricity to come from renewable sources by a certain date.
One obvious strategy would be mandating that utility companies generate at least eight percent of their power from renewables by then.
But if that’s all the lawmakers did, there'd be absolutely no incentive for homeowners and businesses to go solar. To make matters worse, any power generated by those who did wouldn’t even get counted towards the eight percent target.
SRECs are designed to solve both problems. They both incentivize rooftop solar and ensure that the energy it produces gets factored into state renewable energy targets
How they work
In 2004, for example, the PA legislature decided that at least eight percent of the state’s power should be renewable by 2021.
So, they passed a law that utility companies had to generate at least eight percent of their power from renewables by then. But the law also did two other things.
It awarded PA residents one SREC for every 1,000 kWh of energy they produce.
It allowed utility companies to offset their eight percent target by purchasing those SRECs.
If you live in Maryland or Ohio, you’re likewise awarded one SREC for every 1,000 kWh of solar energy you produce to help meet your state’s renewable energy goals.
How to sell your SRECS
If buying and selling SRECs sounds like a huge hassle, don't sweat it. There are reputable brokerage firms willing to do all the work for a small commission.
Since utility companies are interested in volume, they typically won't purchase SRECs from individuals, anyway. So, even the rare bird who wanted to play the SREC market on their own would still have to use a brokerage firm.
Here at Renu, we set up all of our customers with a free account with SRECTrade, a San Francisco firm that's one of the largest brokers in the industry. Besides handling your transactions, SRECTrade also provides you with online tools to track their performance.
How SRECTrade works
SRECTrade lets you decide your level of involvement.
You can have SRECTrade automatically sell your SRECs as soon as their awarded.
You can also have any SRECs you've accumulated automatically sold whenever they hit some minimum price, instead.
Alternatively, you can let SRECTrade use its expertise to decide when it's the right time to sell.
Since we'll be setting up your account, you'll be ready to start collecting money for your SRECs as soon as you start earning them.
But if for any reason you'd prefer to work with a different brokerage, you can switch over at any time.