Solar Renewable Energy Credit (SREC)

A Solar Renewable Energy Credit (SREC) is a tradable certificate that represents the environmental benefits of generating one megawatt-hour (1,000 kWh) of electricity from solar energy. SREC programs exist in several states, and they can provide significant additional income to solar homeowners.

Here’s how SRECs work: for every 1,000 kWh your solar system produces, you earn one SREC. You can then sell that SREC on the open market to utilities that need to meet state renewable energy mandates (called Renewable Portfolio Standards). The value of SRECs varies dramatically by state and market conditions — ranging from under $10 in some states to over $300 in states like New Jersey or Massachusetts where demand is high. States with active SREC markets include New Jersey, Massachusetts, Maryland, Pennsylvania, Ohio, Illinois, and Washington DC. Not all states have SREC programs, and the rules differ in each market. In states where SRECs are valuable, they can add thousands of dollars in income over the life of your solar system, significantly improving your return on investment.