SREC – The New Green In the World?

In conserving energy and natural resources combined with technological advancements, a question often arises: What are SRECs?

In simple words, SRECs (Solar renewable energy credits or certificates) are not just any renewable resource but a form of incentive that allows you to be entitled to an income through the energy produced by your home. If you wish to earn while sitting at home with little effort, SREC is your game!

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Who Acknowledges the SRECs?

The records state that New Jersey was the pioneer of establishing RECs/SRECs in the year 2005. To the present day, SRECs are recognized and acknowledged worldwide due to their commendable worth, renewing, and rewarding.

The market value of SREC is growing in the United States of America and some other countries, which suggests its upcoming success.

What Happens to the SRECs in Massachusetts?

Massachusetts solar renewable energy credits, commonly known as Mass SRECs, completely rely on the RPS (renewable portfolio standard) system while generating electricity.Utilities purchase the renewable aspects or attributes of the generated electricity and count the production till it reaches its goal. The Mass SRECs market is regulated by providing incentives for developing renewable solar energy upon reaching its final goals.

The mass SREC market is solely operated through auction-based contracts between the buyers and sellers of the SREC. Like any other utilities' dynamics, the value of Mass SRECs depends on demand and supply motives and some unpredictable market situations.

Before moving on to the "whats" and "hows" of this advancement, let's understand what are SRECs?;

● If you wish to earn a good amount of money, installing SRECs in your house would suggest that each megawatt per hour will generate one SREC.

● The more megawatts per hour your house generates, the more SRECs you will be accredited to.

● SRECs also provide information on how much electricity was generated using a single solar panel.

Certain laws in some states are mandatory for every citizen to follow; one of them is the Renewable Portfolio Standard (RPS). This law demands that renewable energy resources produce a percentage of electricity usage. In the context of SRECs, solar power is the sole trading unit that complies with RPS. You must purchase RECs (Renewable energy certificates or credits) to follow the rule.

How Is a REC Linked to SREC?

Renewable energy credits (RECs) aim to identify whether a resource is producing renewable electricity or has paid somebody else to do it for their renewable energy production. However, if one utility purchases SRECs from a producer, it pays for the environmental aspects of the generated renewable energy associated with the producer.

How Do We Buy and Sell SRECs?

Living in a state where it is mandatory to follow the SREC protocol implies that you cannot directly sell your credits or certificates to utilities. To overcome this situation, try working with a collector or a broker to authentically get the value of your SREC, such as SREC Trade and SoI System.

(1) SREC Trade - Top-Notch Credit Brokers In the SREC Industry

The SREC Trade manages all transactions and regulations related to your SRECs through online tools and software. The SREC Trade is usually linked directly to the company owners. Therefore, coordination, lease payments, and installations are maintained upon registration with the system.

(2) SoI System – A Key SREC Broker

The SoI System is another renowned aggregator in the SREC industry, and it is popular in Mass SREC, Ohio, New Jersey, Delaware, Maryland, and Washington, D.C. The SoI System handles, reports, sets, installs, and generates SRECs. This system informs you of your SREC's credits, contracts, and transaction histories.

Alternative Compliance Payment

The ACP or alternative compliance payment is a penalty from the state to the utility and company owners when they fail to fulfill the goals set by the state regarding renewable energy production.

This payment is mandatory for all utilities and must be paid; you must ensure that your SRECs generate enough renewable energy to meet the state's requirements. Another upside of the ACP is that it incentivizes utilities when investing in the SREC, as it creates revenue for additional renewable energy production.

Investing in the SREC Market

Purchasing the SRECS is similar to the stock exchange concept, where you depend on the utility's supply and demand. The market sometimes rises with the increase in the price of the SREC; therefore, it's not a linear growth; the prices and demand of SREC keep fluctuating from time to time.

The key here is to understand that an increased supply of SRECs will contribute to decreased prices and rates and vice versa.

How Do SRECs Work?

SRECs can be bought and sold directly to a utility or through a broker such as SOI System or SREC Trade.While exploring the solar renewable energy credits, we must study its lifecycle;

  1. Once the system installed in your house generates electricity
  2. The production record of the month before this one gets registered on the SREC trade
  3. Upon successful registration, your SREC is created, and it appears on the SREC trade account
  4. The SREC trade has access to your production, now it sells your credit
  5. You will be credited with the money/payment you are entitled to in fifteen days.

Are SRECs Worth the Effort?

The RPS system creates a smooth mechanism that incentivizes producers to make the planet green using renewable energy. The additional revenue gives the producers a sense of profit from their environmental aspects through a cost-effective method.

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Earning Through SRECs:Is It a Good Idea?

Earning through purchasing and selling the SREC can benefit you effectively, and it's a full bonus if you own a solar energy system! Let's take a brief look at the factors that prove that earning through SRECs is a good idea;

1.Additional Revenue System and its Incentives

The additional revenue system provides the buyers with an incentive along with electricity production; this might improve the condition of the investment made by the owner through the installation of a solar energy system. This revenue system also gives a sense of incentive to the buyer in the form of additional payments of aspects.

2.Dynamics of the SREC Market

The SREC market is uncertain and fluctuates depending on its supply, demand, and varying rates. Long-term assessment is necessary when a buyer wants complete revenue generation from SREC.

3.Calculated Risks

Before purchasing and owning SRECs, you should consider all aspects, such as revenue, risks, and their impact on the value.

4.Regulated Environments

If the state decides to alter or edit the RPS policies, the overall framework of your SREC, such as its availability and value, can be affected. Staying updated and informed about your state's renewable energy policies will benefit you.

To Sum It Up

Start your solar journey and generate additional revenue by simply sitting at home and installing SRECs. The key is understanding how SRECs work in your state properly and whether or not they will benefit you as a long-term investment. Earn and sell credits by going solar or partnering up with brokers; have it your way and make the planet a new shade of green!