The Massachusetts Department of Energy Resources (DOER) offers a production incentive for solar electric system owners. Solar Renewable Energy Certificates, or SRECs, are an additional financial incentive for PV system owners on top of utility savings.
SREC stands for Solar Renewable Energy Certificate. It represents the environmental benefits of producing one megawatt-hour of electricity using solar PV technology.
SRECs behave like stock certificates. They are bought and sold on a market administered by the Massachusetts Department of Energy Resources (DOER).
Anyone in MA with a qualified solar PV system that is producing electricity can earn SRECs. System owners must register their system with the DOER and report solar electric production on a monthly basis.
SRECs are purchased by the investor-owned utilities, such as National Grid and EVERSOURCE. In Massachusetts, electric utilities need SRECs to meet solar production mandates in place through the State’s Renewable Portfolio Standard. The current SREC II program will be “fully subscribed” when the State reaches 1600 megawatts of installed solar PV.
An SREC is worth whatever a utility will pay for it: SRECs are bought and sold on an open market.
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, called the Alternative Compliance Payment (ACP). Under the current SREC II program for 2016, the ACP is set at $350 per SREC.
The floor is established by the DOER’s Solar Credit Clearinghouse, an auction of last resort should an SREC not sell. Under SREC II, the Solar Credit Clearinghouse values SRECs at $285 each in 2016, and declines year by year; SRECs are valued at $180 in 2025.
A well-sited residential 5 kilowatt (5 kW) PV system in MA will generate approximately 6 megawatt hours annually, earning 6 SRECs. These SRECs will earn the system owner at least $1700 and as much as $2200 when sold, which is in addition to and on top of the system owner's utility savings.
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