Solar Renewable Energy Credits, or SRECs
What is an SREC?
SREC stands for Solar Renewable Energy Credit. It represents the environmental benefits of producing one megawatt-hour of electricity using Photovoltaic technology.
SRECs behave like stock certificates. They are bought an sold on a market administered by the Massachusetts Department of Energy Resources(DOER).
An SREC does not represent electricity itself - solar system owners make their own electricity and experience the associated utility savings independent of the SREC program. SRECs are an additional financial incentive for Photovoltaic electricity producers.
Who makes them?
Anyone in MA with a qualified solar electric system producing electricity can earn SRECs. System owners must register their system with the DOER and report solar electric production on a monthly basis.
Who buys them?
SRECs are purchased by the investor-owned utilities, such as National Grid and NSTAR. In Massachusetts, electric utilities need SRECs to meet solar production mandates placed upon them through the state’s Renewable Portfolio Standard. The overall goal of the state is to reach 400 megawatts installed Photovoltaics.
What is an SREC worth?
An SREC is worth whatever a utility will pay for it: SRECs are bought and sold on an open market. The first MA SRECs were sold in August 2010 at $500 each.
There are price support mechanisms put in place by the DOER to create ceiling and floor values for SRECs. The ceiling is determined by the fine levied on utilities for not meeting the solar standard. This is called the Alternative Compliance Payment (ACP). For 2012-13 it is set at $550 per SREC.
The floor is established by the DOER’s Solar Credit Clearinghouse, an auction of last resort should an SREC not sell. This Solar Credit Clearinghouse values SRECs at $300 each.
What does that mean practically?
A well-sited residential 5 kilowatt (5kW) PV system in MA will generate approximately 6 megawatt hours annually, earning 6 SRECs. These SRECs will earn the system owner at least $1800 and as much as $3300 when sold.
To install a Photovoltaic system and begin earmning your own SRECs, request an evaluation on the right and we will contact you to schedule a free solar evaluation.