The state of Pennsylvania offers a smart incentive program under SRECs for residential solar buyers in the state. As part of this program, PA residents are incentivized for every megawatt-hour of solar power they generate through the year. Broadly speaking, the more solar energy they produce, the more money they get. The SREC incentive is above and beyond the net metering incentive that residents receive by diverting their excess solar power to the grid.
If you’re mulling over shifting to solar, here’s everything you should know about this nifty incentive.
What Are SRECs?
Solar renewable energy certificates (SRECs) are tradable certificates earned by home solar owners for every megawatt-hour of solar energy they produce. They are similar to carbon credits.
The state of Pennsylvania has mandated that all utility companies in the state produce at least 18% of their electricity from renewable sources. Further, 0.5% of this renewable energy target must be sourced from solar power.
Utilities fulfill this mandatory requirement by buying SRECs from home solar customers for a price. So, residents can sell the SRECs they earn to utility companies and pocket a substantial profit.
What is the Price of SRECs?
The SREC prices vary from time to time as per the demand-supply dynamics prevalent at the time of the trade. In the summer of 2021, the PA SRECs were trading at around $40 each.
To give you an idea of how much money you can make by selling SRECs, let’s suppose that you have a 9kW solar system. You generate roughly 10MWh of power annually, which qualifies you for 10 SRECs.
So, for $40 per SREC, you get a flat $400 annually. When you add them up over a decade, that’s $4,000 of additional income for doing virtually nothing. That’s a pretty sweet deal by any measure.
Platforms like SRECTrade allow residents to sell their SRECs at fair prices to utility companies. The process is relatively hassle-free and gives residents more control over their transactions.
PA residents should understand that out-of-state SRECs cannot be traded in PA anymore. A 2017 law prevents non-PA SRECs from being traded in the state. Also, each SREC is usable for precisely three years only. So, if you hold onto your SRECs for longer than that, they will be rendered useless.
The ban on non-PA SRECs is expected to hit the supply and make PA SRECs dearer in the coming years, which will send their prices soaring. In other words, it’s a great time to shift to solar and start racking up those SRECs.