All About SRECs: Top Questions, Including How They Work

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.

How Do SRECS Work?


SREC programs are a great way for solar providers to buy RECs from solar generators. SREC-I programs pay for the cost of installing solar panels, along with the expense of getting permits and other regulatory compliance. Once the solar panels are up and running, the solar company then sells energy to their customers, but has to buy REC’s to account for the amount of renewable energy they’re producing. That’s where SREC programs come in. They buy a bunch of REC’s and sell them to solar installers and developers at a discounted rate.

All About SRECS Programs

The SREC market is currently oversupplied, which means there’s a ton of RECs out there and not as many people who want them. That’s why SREC-programs can offer low prices on RECs. Because they’re purchasing them in bulk, they can get pretty good deals on SRECs. And because they’re offering a better price than most of their competitors, they’re making it really attractive for solar installers and developers to sign up with them. The installers know they have a guaranteed source of RECs at a good price, which makes it easier to do business.

Srecs work like stock, but instead of shares, they are called "sustainable renewable energy certificates," or srecs.

The main difference between a srec and share of stock is that a srec represents the environmental attributes or benefits of one megawatt-hour (MWh) of solar electricity. The srec market is new and is growing, but it’s important to understand how they function in order to take full advantage of their benefits

Solar Renewable Energy Credits or SRECS

Solar energy systems generate Renewable Energy Certificates (RECs) which represent a megawatt-hour of electricity. SRECs are a tradable certificate that represents a megawatt-hours worth of electricity that is generated by a solar project. The idea behind SRECs is to provide solar developers with an added incentive to build more solar projects. Learn more about federal tax incentives.

The Solar Renewable Energy Credit, or SREC, Program

The Solar Renewable Energy Credit, or SREC, Program was established as part of the Energy Policy Act of 2005 with the goal of increasing renewable energy generation. This program provides a financial benefit to leasing companies that invest in renewable energy projects, like solar panels. Through the SREC Program, a solar leasing company can receive SRECs that represent the environmental attributes of 1 megawatt hour of electricity produced by a renewable energy system. The solar leasing company can then sell these renewable energy credits to electricity suppliers and utilities to meet their state’s renewable portfolio standards. These portfolios require that utilities derive a certain percentage of their power from renewable sources, encouraging them to purchase SRECs. Residential Solar Empower Your Future.

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Majeski Solar is a Solar Installer company, and Top Tier Solar Installer in Washington D.C. 

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