sunMAX - Pre-Sale: Solar Renewable Energy Credits (SRECs)

Overview

One important type of incentive in the US is known as Solar Renewable Energy Credits (SRECs). 

In some states, owners of solar energy systems can sell SRECs based on how much energy they produce. That means that in addition to reducing their utility bill, solar owners in these states can earn additional revenue, further increasing their savings from solar.  Revenues from selling SRECs can sometimes double the savings from solar (for example in states like MD and MA, with high SREC prices). 

The SREC states include: MA, NJ, PA, OH, DE, MD, and DC. In addition, solar generated in these states can sell SRECs in some of the states above: MI, IL, IN, KY, WV, VA, NC.  If you are selling solar in any of these states, you'll definitely want to factor in SRECs when you estimate the monthly savings for your customers. In some of these states, electricity prices are relatively low, and solar would not be economic without the value of the SRECs.  In others of these states, electricity prices are higher, and solar would make economic sense even without the SRECs, but with the SRECs, solar gets even more attractive.

One SREC is created for each megawatt-hour (MWh) of electricity produced. (A typical residential solar system with 20 panels might create anywhere from 5-10 MWh each year, for example. The revenues from selling these SRECs can amount to anywhere from $10-100 each month, greatly increasing a customer's savings from solar.) 

The value of SRECs varies based on trading in the markets in each state. SREC prices currently range from $30/MWh in Ohio to almost $500/MWh in Massachusetts.  You can look up the SREC state policies and see the current value of SRECs in each of these markets on the SRECTrade website:

http://www.srectrade.com/srec_markets/

Solar owners can sell their SRECs themselves by filing forms with the market operator or with a trader like SRECTRade. Depending on the Loan Partner you choose, you may be able to deduct the value of an SREC from the Loan Payment, or simply deposit this amount in the customer's bank account.

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