A Solar Renewable Energy Certificate (SREC) is the monetary value placed on energy generated by a residential or business solar system. It is designed to incentivize homeowners and businesses to produce solar energy, and ultimately reduce their carbon footprint. SRECs are purchased by utility companies to help meet their state’s Renewable Portfolio Standards, which dictate the amount of solar energy utility companies are required to produce. When these companies purchase SRECs, they assume “ownership” of the energy produced. The more megawatt-hours of energy a homeowner or business produces, the more SRECs they are eligible to receive. The value of an SREC is dictated by government regulations and the respective state’s SREC market. Similar to stocks, the value can fluctuate. Most states, including each one in SunnyMac’s service area, have an SREC market. Therefore, if you choose to go solar with SunnyMac, and purchase your system outright, you will be eligible to earn SRECs for years to come, so long as the system is producing energy. To prevent fraud and ensure full transparency, state registries oversee the tracking of SRECs.
SREC FAQs
To help shed light on this topic, we’ve compiled answers to commonly asked questions.
Are SRECs the same as the Federal Income Tax Credit?
No. SRECs are separate and in addition to the 30% federal tax credit, for those homeowners or businesses purchasing a solar system.
How long can I get paid for my energy production?
The number of years varies by state. If you have questions about SRECs in Delaware, Maryland, New Jersey or Pennsylvania, please call us at 1-844-SUNNYMAC.
Do customers need to report their SRECs?
Solar system owners are required to register, report and collect their SRECs; however, SunnyMac provides information on brokerage services that make this process as seamless as possible.
Who purchases SRECs?
Utility companies don’t technically “purchase” SRECs — they give credits back to solar energy producers in the form of a utility bill credit, essentially lowering the cost of grid electricity needed. Each utility is required to meet their state’s Renewable Portfolio Standards and reduce their carbon footprint through solar energy production. Once the SREC is “sold”, the utility company owns the production of the respective solar energy produced.
Are SRECs sold by the megawatt-hour or kilowatt-hour?
They are sold by the megawatt-hour. One megawatt-hour is equal to 1,000 kilowatt-hours.
Will I earn SRECs if I have a Power Purchase Agreement (PPA)?
No. There are many benefits to choosing a PPA; however, because SRECs belong to the system owner, it is them (the PPA administrator, in this case) who assumes ownership. If you have questions about PPAs or SRECs, please call us at 1-844-SUNNYMAC.
How do customers receive money for their SRECs?
If customers are in SunnyMac’s service area (DE, MD, PA or NJ), monthly production information must be input into PJM Gats, a platform to buy and sell renewable energy certificates. They have two options for handling the input of information — it can be self-input or handled by a broker who will cover entering the required information for a small fee. When customers choose the latter option, SunnyMac will upload all documents needed by the broker and provide access to their production. Then, all that is required of the homeowner or business is to enter their direct deposit information to be paid electronically. Payment by check is also an option; however, check payments will occur on a less-frequent basis.
Resources:
- SolarReviews. What is an SREC? Solar Renewable Energy Credits Explained. Accessed January 3, 2025.
