SREC and RPS: Your Next Biggest Incentive to Go Solar

Information about  Renewable Energy Certificates (SRECs)  and the Renewable Portfolio Standard (RPS)

If you took the plunge and had a solar power system installed, you are already enjoying a lower electric bill, or perhaps no bill at all. Did you know that you might be able to earn some money besides? Every now and then a regulation or law comes along that is truly helpful, and the Renewable Portfolio Standard (RPS) that 16 states, plus Washington DC, have adopted is one that could work in your favor.

What Is the Renewable Portfolio Standard (RPS)?

RPS presents a requirement to produce a certain amount of solar energy annually. To show proof that they are meeting this mandate, they provide certificates for solar kilowatt hours produced. These certificates are called Solar Renewable Energy Certificates (SREC s). If you haven’t installed a system, this extra incentive might seal the deal.

If you live in one of the RPS states, you earn SRECs based on the amount of solar kilowatt-hours produced. The ratio is one certificate per 1,000 kilowatt-hours. Your system must be certified and registered which is done by state regulatory agencies, so they can create and track the SRECs.

How Do I Get Paid for my SREC s?

It is important to understand that SREC s are not a check in hand. They do not have a set value. Instead, the price fluctuates due to how close the state is to meeting that year’s quota.

Just as you would with a stock certificate, you can hold them until you want to sell them.

SRECs are similar to a stock certificate in that you may or may not be able to turn it into the utility company. The utility company makes this choice and they often accept them in large amounts, such as from an aggregator, but not from homeowners. If you cannot turn them in you will need to find aggregators to buy your SREC s.

SREC s vary based on the year they were earned.

This is due to the quotas that the states have for each year. If you are holding one from 2012, for example, and they have met their quota for that year, then your certificate has very little value. If on the other hand, you have one for this year and it is looking a bit precarious as to them meeting their quota, the price would increase. Generally speaking, it is not a good idea to hang on to your SREC s for too long.

The easiest way to deal with your SREC s due to these various complexities is to use a SREC aggregator, just as you would use a stock broker for dealing with your stock certificates.

Make the Decision to Go Solar

While you may not make a huge fortune on your SREC s, this adds one more reason to make the switch to using solar power. When your system is hooked into the grid, you can also be selling power back to the utility company which is also lucrative. With your utility savings and the ability to earn money with SREC s, the cost for your solar power system will be recouped in no time. Solar is a valuable investment and with SREC s making an addition incentive. With prices down you will find it is quite affordable to at least augment your power usage if not replace it entirely.