How you handle your SRECs depends on your individual financial needs and risk tolerance, so everyone approaches SRECs differently.
What is an SREC?
An SREC represents the “green” value of your electricity.SRECs are separate from the physical electricity that your solar panels produce. Think of them like a “voucher” that proves that the electricity from your solar panels is renewable.
You get one SREC for every 1,000 kWh of electricity produced by a solar system.
These SREC “vouchers” are valuable because many utilities are required to purchase a certain number of them each year in order to meet sustainability requirements.
This video does a good job of further explaining how SRECs work.
Why do we have SRECs?
How much are SRECs worth?
Because SRECs are bought and sold on an open market, there are a number of factors that influence their price. The most important thing to remember is that SREC prices are determined by supply and demand. The more demand for SRECs there is from utilities, the higher the price. On the flip side, the more SRECs that are supplied to the market from solar projects, the lower the price.It’s important to remember that the SREC market can change at any time and the price changes depending on the supply of SRECs. SRECs are high now, but you can’t be sure they will stay that way. Think of the SREC market like the stock market—it can change.
How many SRECs will my system produce?
How do I sell my SRECs?
Your installer can then help you use the certification number you receive to register your system on the Generation Attribute Tracking System (“GATS”) administered by PJM. PJM is a regional transmission organization that manages the electric grid for 13 states and the District of Columbia. Once you enter the website, you need to register your system with the certification number that you have from your utility commission and submit it to the GATS administrator. GATS should issue an approval in five to seven business days and your system will begin to generate credits.
Once you’re registered, you can sell your SRECs. The are three options for doing this. You can:
- Sell the rights to all of your system’s SRECs upfront for a cash payment.
- Sell your SRECs via a contract for a set period of time, usually three, five, or ten years.
- Register your SRECs yourself and trade them on the spot market (like trading stocks on the stock market).
Let’s break down the benefits and drawbacks of each approach.
Where can I sell my SRECs?
Some installers will purchase your SRECs from you directly. You can also sell your SRECs yourself. The following are some commonly used companies. To get current prices for SRECs, give them a call:
- Flett Exchange
NOTE: In our experience with homeowners and installers in the District, the companies above are most commonly used but there are other providers in the market. We make no recommendations as to which company you should use. For a full list of aggregators and brokers who service the District, check out this list on the PJM website.