Common questions

How does the SREC market work?

How does the SREC market work?

An SREC is a solar renewable energy credit. One is created for every megawatt hour (MWh) of electricity produced by a solar generator. This means a customer with a solar array on their roof can use the electricity on-site and then sell the SRECs off to another buyer. The buyers are the utilities.

What does SREC stand for?

The acronym SREC stands for Solar Renewable Energy Certificate; a tradable, non-tangible energy commodity that represents one megawatt-hour of electricity produced by a renewable source – specifically through solar energy.

What are SRECs selling for in MA?


Energy Year Estimated SRECs Required (MWh) Net SCCA Price
2018 1,731,790 $257
2019 1,666,916 $244
2020 To be determined $232
2021 To be determined $221

How are SREC markets created?

Solar RECs (SRECs) are created for each megawatt-hour of electricity generated from solar energy systems. The monetary value of an SREC in these state markets is determined by supply and demand, with demand largely driven by electricity suppliers needing to meet their solar RPS requirement or pay a compliance premium.

How are SRECs paid?

SRECs are sold separately from the physical electricity that your solar panels produce. Think of them like a “voucher” that proves that the electricity from your solar panels is renewable. You earn one SREC for every 1,000 kWh (or 1 MWh) of electricity produced by a solar system.

Do SRECs expire?

SRECs are good for 5 compliance years when they expire, under current legislation, the energy year it was generated and the following 4 energy years. A “vintage”, also know as an energy year is the grouping of 12 months of generation.

Are SRECs transferable?

The accounting is the same (i.e. one megawatt-hour of solar produces one REC, or one SREC), and just as RECs are bought and sold to transfer the right to count renewable electricity, SRECs can be bought and sold to transfer the right to count solar electricity.

How does SREC 2 market sector eligibility work?

The SREC-II program divides project eligibility into market sectors. With the exception of the Managed Growth category, there are no limits on how much capacity can qualify within each market sector. A project’s market sector eligibility determines how many SRECs it receives for each megawatt hour it produces.

How are SRECs used in the solar industry?

Solar renewable energy certificates (SRECs) are a performance-based solar incentive that allow you to earn additional income from solar electricity generation. As a homeowner, you can earn one SREC for every megawatt hour (MWh), or 1,000 kilowatt hours (kWhs), of electricity your solar panel system generates.

What’s the difference between SREC I and SREC II?

The SREC-I and SREC-II programs each have their own SCCA. The results of the SCCA for each of the programs are unrelated, but the rules governing each SCCA are similar. SRECs from the SREC-I program may only be deposited in an SREC-I SCCA, and SRECs from the SREC-II program may only be deposited in an SREC-II SCCA.

How does the SREC market work in Massachusetts?

The Massachusetts SREC programs are built around a price support mechanism called the Solar Credit Clearinghouse Auction (SCCA). In oversupplied years (when more SRECs are available than required), buyers are incentivized to purchase SRECs through the SCCA if they believe that the SCCA price is at or below the potential future price of the SRECs.

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