Solar Renewable Energy Credits (SRECs)
This is the largest income stream generated by your solar electric system. Therefore, you should understand this and make sure that you maximize this income. Maggio Roofing has partnered with Sol Systems, a Washington D.C. based solar energy finance and development firm committed to making solar energy affordable and accessible to homeowners and businesses. Sol Systems is one of the largest aggregators of SRECs in the country.
A Renewable Portfolio Standard (RPS), or Alternative Energy Portfolio Standard (AEPS), is a state or federal policy that requires electricity suppliers to provide a certain percentage of their electricity from renewable energy resources. Over thirty states have RPS programs, and many of these states have solar RPS requirements that specifically mandate a minimum percentage of energy be produced from solar energy sources. Energy suppliers meet RPS requirements by creating or purchasing SRECs, or by paying a non-compliance fine to state regulatory authorities.
The term SREC stands for Solar Renewable Energy Credit and is a tradable credit that represents all the clean energy benefits of electricity generated from a solar electric system. Each time a solar electric system generates 1000kWh (1MWh) of electricity, an SREC is issued which can then be sold or traded separately from the power.
SRECs are then purchased by electrical utilities in order to meet a state’s Renewable Portfolio Standard (RPS) requirements. SRECs are therefore commodities; their value quantified by (1) the state RPS requirements for which they are purchased, (2) the value of the state’s Solar Alternative Compliance Payment (ACP), and (3) the supply and demand of SRECs in that specific state. Because SRECs may be produced in one state and utilized in another, their values can vary dramatically.
A homeowner, business or large-scale development will create an SREC each time it produces one megawatt-hour (MWh). Depending on the state in which the system is located and the size of the system, these solar systems can create SRECs using estimates from an online system called PV Watts, or the owner may have to provide actual meter readings. Generally, systems less than 10 kw can use estimates from PV Watts, but solar systems larger than 10 kw, and also those located in Ohio or Delaware, require the system owner to provide actual meter output information in order to produce SRECs.
The SREC market, a subset of the larger REC market, has been Sol System’s primary focus because of a lack of liquidity and infrastructure. Businesses and homeowners trying to sell their SRECs often have difficulty assessing the value of these SRECs or finding entities willing to purchase them. Energy suppliers that are required to purchase SRECs often have no interest in working one-on-one with homeowners or businesses, as these transactions are costly and time consuming. They provide solutions for both parties by purchasing SRECs in mass and selling them to the energy suppliers that need them.
In order to sell SRECs, a system owner must register the system with state authorities and with a relevant trading platform. Once the system owner has registered their system to produce SRECs, and registered their system on the trading platform, they will have to find a buyer to purchase their SRECs.
Our Approach to Selling SRECs:
We believe the best way to monetize SRECs, and finance solar systems, is over the long-term. That’s why we provide our customers with long-term SREC contracts. Our partners can be assured of a consistent price and a dependable partner. Our customers can sit back and relax, we will take care of the paperwork to register their systems, we will take on the market risk, and they need only pick up a check.
**All of our SREC contracts are backed up by long-term agreements with utilities and energy suppliers to ensure we can do what we promise. Sol Systems is the largest, and oldest, interstate SREC aggregator in the country.
State SREC Markets:
Sol Systems works with our homeowner and commercial customers in the states of Kentucky, Indiana, Michigan, Ohio, Pennsylvania, New Jersey, Delaware, Maryland, Virginia, North Carolina, West Virginia, and the District of Columbia.
SREC Value & Regulations:
The value of your SRECs is a function of state-specific RPS legislation and supply and demand. Energy suppliers who must meet RPS legislation have an option: they can either buy SRECs or pay a fee called the alternative compliance payment (ACP). Because this fee differs from state to state, the value of SRECs also differs.
Interstate SREC Trading:
Some states allow you to import SRECs from outside the state. However, long-term contracts must be based on the domicile state’s ACP so that if regulatory changes remove that option, which some already have, we can still ensure the sale of your SRECs.