What is a Solar Renewable Energy Certificate?
An SREC (Solar Renewable Energy Certificate) is minted for every MWh (1,000 kWh’s) generated from a solar project. An SREC represents the environmental benefit of solar, and is completely separate from electric savings and other benefits of solar. The value of an SREC varies significantly by state, and is based on the demand for SREC’s within any given state. States with requirements for SREC’s include Pennsylvania, Ohio, Maryland, Delaware, and New Jersey.
The requirement for SREC’s is based on state law, and typically increases over time. Electricity suppliers that do not meet the requirement are fined at the current SACP (solar alternative compliance payment). To avoid the fine, electricity suppliers buy SREC’s, which provides the demand.
States also vary in requirements of solar project location. Most states, including Maryland, Delaware and New Jersey require that SREC’s used in compliance of their individual state laws be produced by solar projects within their state. On the other hand, Pennsylvania accepts SREC’s produced anywhere in the PJM area. This has been the cause for lower SREC prices in Pennsylvania.
November 2016 SREC Current Values*
New Jersey: $220
*Prices may fluctuate on a daily basis and do not exclude brokerage and commission fees