Renewable Energy Credits

Renewable Energy Credits are a solar incentive that allows homeowners to sell credits for their solar system's clean energy production to their utility. A homeowner will earn one REC for every 1000 kilowatt hours (kWhs) produced by their solar system. An REC can be worth as much as $300 in certain markets.

RECs exist as a result of a regulation known as the renewable portfolio standard (RPS). Renewable portfolio standards are state laws that require utilities to produce a specific percentage of their electricity from renewable resources. Nearly 30 states and Washington, D.C. have an RPS, and eight states have a renewable portfolio goal. Illinois has both an RPS and a renewable portfolio goal, which ensures that this funding mechanism for solar projects is here to stay.

To meet their RPS requirements, electricity providers must obtain renewable energy credits or certificates (RECs), which serve as proof that they have either produced renewable electricity themselves or paid someone who is producing renewable electricity for the right to “count” that electricity themselves. Many renewable portfolio standards also have a solar carve-out, which requires that a minimum percentage of electricity sales in that state come specifically from solar power. In those cases, SRECs (solar renewable energy credits) are used to account for solar electricity production.

SRECs are just like RECs, but specific to electricity that comes from solar panels. For every megawatt hour (MWh) of electricity that a solar energy system produces, a corresponding SREC is created. 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.Some states with solar carve-outs have established an SREC market to facilitate the sale of SRECs. When applicable, solar panel system owners can sell their SRECs through the SREC market to utilities that need to buy SRECs in order to meet their solar carve-out requirements.

The amount of money a solar panel owner will receive for his or her SREC varies by state, and can range from under $50 to over $300 per SREC. This price depends on market factors of supply and demand.The sale of renewable energy credits can provide a significant funding mechanism for your next solar project. Let the experienced staff at WindSolarUSA advise of your current REC pricing and provide you with a cost model showing the financial performance of a system that is custom designed for you!