Virginia and two of its largest electric service providers are getting serious about green. And if you’re a solar owner in the state, this commitment could help you earn additional revenue.
The Virginia Clean Economy Act requires Dominion Energy Virginia and Appalachian Power to go 100% carbon-free by 2045 and 2050, respectively. To meet their Renewable Portfolio Standard (RPS) requirements, they’ll have to purchase RECs and SRECs from owners of renewable energy systems, like you.
With this act, solar owners in Virginia will not only reduce their electricity bills, but they can now also earn extra income from selling SRECs. This blog outlines what you need to know to start making money.
What Are RECs or SRECs?
A Renewable Energy Credit (REC) is a credit earned by generating 1,000 kWh of renewable energy (or 1 megawatt) from solar, wind, hydropower, or geothermal energy sources. A Solar Renewable Energy Credit is an SREC, or a REC from solar energy specifically.
As a solar system owner, you can sell your SRECs to the utility company to help them meet their RPS requirements. If a utility company doesn’t purchase enough credits to meet the government-set standard, they’ll have to pay a fine.
A Virginia REC market is now in full swing with the passage of the Virginia Clean Economy Act.
How Do I Sell SRECs in Virginia?
To sell your SRECs, you’ll need to register your system and sign up with a broker. You don’t have to be a Dominion Energy or Appalachian Power customer to sell SRECs in the Virginia market.
If you installed solar with Paradise Energy or are thinking about doing so in the future, we will register your system in the correct REC market. We’ll also work with REC brokers on your behalf, so you won’t have the additional task of staying on top of your account.
It’s worth noting that as the VA SREC market opens, brokerage firms could be temporarily backed up as they sort through the influx of registrations.
But this backup shouldn’t impact how many credits you generate this year. New systems will start accumulating SRECs from the date of their utility interconnection. Existing systems will start collecting SRECs from the first day of the year that their application is filed. So if you file anytime in 2022, you’ll receive credit for any electricity generated since January 1st of 2022.
Can I Sell SRECs in Virginia if I'm Already Selling in Another State?
Some states allow solar producers in other states to sell their SRECs to local utility companies. This was the case with Pennsylvania and the District of Columbia until just a few years ago.
If you’re one of the Virginian solar producers grandfathered into another state’s SREC market, you may be wondering whether or not you should start selling in Virginia instead.
If you’re in the DC market, you should probably stay there, as SREC prices are higher than Virginia’s and historically have remained higher than most other markets. But if you’re selling in Pennsylvania, it may be worth it to switch. Pennsylvania’s market is saturated, and prices are down, so at the time of publishing this blog, Virginia’s SREC values are higher.
How Much Can I Make Selling SRECs in Virginia?
SRECs are sold on an open market, with a soft ceiling for the price. The noncompliance fine for utilities that don’t meet their RPS is $75 per megawatt. So, in theory, an SREC in Virginia will not exceed $75.
We expect to see Virginia’s SREC prices fluctuate between $20 and $50 in 2022, though this is just a broad estimate. As many new solar installs join the market and Virginia’s solar portfolio expands, it’s likely that prices will come down.
How many SRECs you create a year depends on how much electricity your solar system generates. See the chart below for a very rough estimate based on the size of your solar system. The numbers in these charts do not include brokerage fees. Go to SRECTrade to view up-to-date values.
|System Size||Estimated Annual Solar Production||Number of SRECs Produced||Possible Annual Earnings (based on $20-$50)|
|10 kW||12,000 kWh||12||$240 - $600|
|35 kW||44,000 kWh||44||$880- $2,200|
|100 kW||110,000 kWh||110||$2,200 - $5,500|
Overall, you can make a few hundred to a few thousand dollars each year. The SREC program won’t make you rich, but it’s easy money that makes your solar payback even better. It’s just one of the many incentives available to Virginians looking to install solar.
Here are a few other important items for Virginian's that want to install a solar energy system: