An SREC (Solar Renewable Energy Certificate) is a tradable credit representing one megawatt-hour of electricity generated by a solar system. SRECs allow solar system owners to earn revenue by selling energy credits separately from the electricity itself. These tradable certificates create an additional income stream beyond electricity bill savings and are particularly valuable in states with renewable portfolio standards.
SREC Markets and Pricing
SREC prices fluctuate based on supply and demand in regional markets, ranging from $20 to $200 per certificate depending on location and market conditions. States including New Jersey, Pennsylvania, Massachusetts, and Connecticut operate active SREC markets. Utilities and large commercial consumers must purchase SRECs to meet state renewable energy requirements, creating guaranteed demand that supports SREC values.
System Economics
A 6-kilowatt residential system in an active SREC market might generate 6 to 8 SRECs annually, producing $300 to $1,000 in additional income. SREC programs typically run 15 to 20 years, providing long-term income stability. Property owners should verify SREC market eligibility in their region before installation, as market availability varies significantly and not all states offer SREC programs.