SRECs Explained

Adrienne SorensenOctober 9, 20181660

SRECs Explained

There seems to be an ongoing supply for incentives to help all people, of all backgrounds to jump into the renewable energy revolution witnessed in the entirety of the human experience. We can tell you are the type of person who does their research. It's sure you have now heard something about credits, rebates, etc. that make the step toward your solar energy systems purchase and install one step closer.


In your broad search, you may have heard of solar renewable energy credits (SRECs). SRECs are a tradable asset that you get from having a panel system and creating solar energy at home. Due to the widely utilized state requirement recognized as the Renewable Portfolio Standard (RPS), utilities in 38 separate states must provide a concluded percentage of their energy from renewable sources, normally a minimum of 20 percent.


In 6 states and Washington D.C., the RPS notes that a specific part of the clean energy created must be provided via clean power. States with this type of “solar carve-out” are willing to invest to take credit for the electricity produced by clean energy homeowners.

Solar Renewable Energy Credit Calculating

There is a formula for calculating this renewable energy credit. One renewable energy credit (REC) is equal to a 1-megawatt hour of energy generated (1,000-kilowatt hours). This equation means that the typical solar panel installation accumulates between three and seven SRECs per year.


State contingent, cashing in on your SRECs could be a yearly payoff of a few thousand dollars. SRECs are similar to stock prices in some cases. They are bought from aggregators, fluctuate over periods of time, and are volatile, just like stocks you may follow on several indexes. Policy changes like raising or lowering a state’s RPS goal or modifications to ACPs for businesses can have an impact on SREC market pricing.


Consequently, if you consider yourself a professional online aggregator, the potential for significant gains is waiting for you.

Leading SREC Markets

Washington D.C., New Jersey, and Massachusetts take the first hat when it comes to SREC Pricing. But keep notice that generally in states, SREC costs fall each year, although exceptions loom. It's a reasonable expectation as we witness more clean power installations in various states – it signals that there is a robust supply of SRECs in the market.


This logic, in turn, means that utilities are narrower in reaching their RPS goals. Low prices can also say that the fines for not presenting RECs specifically for solar are unsubstantial. The other takeaway, however, is that the NJ, MA and D.C. SREC markets are still paying off big profits for your PV credits and with prices likely to continue to fall, there is no sufficient time to go solar than the present.


If you want to move into the future and join the solar revolution, or if you want to find out what solar panels are right for you, go to and try our price checker tool. You can see how much a system will cost, and how much you can save over the next 20 years. For more information relating to going solar, don't forget to visit our solar blog section for more handy guides and articles.

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