Frequently Asked Questions (FAQs)
What is an SREC? And where do they come from?
SREC is short for Solar Renewable Energy Certificate. SRECs are credits given to owners or asset managers of solar photovoltaic equipment based on the amount of electricity their system(s) produce. A single SREC represents one megawatt hour (1,000 kilowatt hours) of electricity generated by a solar photovoltaic system.
In order to recieve SRECs eligible systems must register and be monitored via renewable energy tracking systems, such as (PJM-GATS, MISO or M-RETS, NEPOOL-GIS AND WREGIS). For each megawatt hour of solar electricity generated, the system owner or asset manager will receive one SREC in the renewable energy tracking system which covers the geographic area where the system is located or registered. In some cases solar facilities may be registered in additional geographic regions, other than where they are physically located and SRECs may be transferrable to other states.
What is the purpose of the SREC program?
SRECs are part of a state's Renewable Portfolio Standard (RPS), intended to promote renewable energy. RPS legislation mandates that a certain percentage of a state's electricity come from renewable sources, such as solar or wind. By having to meet targets for production, state's need to incentivize installation and adoption of renewable technologies. This is where SRECs come in.
RPS legislation mandates that utility and energy companies must fund the RPS, which they do so by purchasing SRECs, or by paying what is known as the Solar Alternative Compliance Payment (SACP). The amount of the SACP is defined in the RPS legislation and varies from state to state. For example, New Jersey's RPS is to have 22.5% of its energy generated from renewable source by the year 2021. The SACP in New Jersey is currently $693/megawatt hour and decreases by 2.5% each year. Not every state's RPS is legally binding some are simply target numbers, with compliance being voluntary.
How can I earn revenue from SRECs?
SRECs can be sold to utility providers that need to satisfy their state's RPS requirement. Maximum price is usually relative to the amount of the Solar Alternative Compliance Payment (SACP), or fine paid by utility providers for each SREC they fall short of satisfying their RPS. SREC value is dependent on market forces and subject to supply and demand constraints.
Which states have an RPS and what are their targets?
Which states have SREC programs as part of their RPS?
Currently seventeen states and the District of Columbia have SREC programs, however; they are not all interchangeable, and there are limitations on cross-state SREC sales. Not every state with an SREC program has an SACP. For more information, and details on your region's program, contact your state RPS representative.
How do I get started with an SREC program?
After your solar system is installed, it must be registered in the renewable energy tracking system that governs your region, or in the region(s) in which you intend to market your SRECs. A complete list of tracking systems and links to their websites is available here.
What is required after registering with an approved tracking system?
After you system is registered, the state certification agency will issue SRECs based on the size of your system and the amount of energy it generates. Generally speaking, for systems under 10kW an estimate is used. For larger systems, certificate authorities require you to report your inverter meter readings to them on a monthly or bi-monthly basis. Depending on your region, you may be required to offer your SRECs to RPS buyers in your region's tracking system before they can be sold on the open market.
How are SRECs priced?
SRECs do not have any intrinsic or set value. SREC prices fluctuate and are influenced by supply and demand. The supply is determined by the number of solar facilities generating SRECs in that region; the demand is determined by that individual region's RPS solar requirement and SACP. Generally speaking, the maximum value of an SREC for a particular region will be no higher than that region's SACP. State legislation also plays a vital role in determining SREC value.
Are SREC prices the same everywhere?
No. Every region is different, and prices are influenced by a number of factors. Regions and states that do not allow SRECs to be imported from other regions traditionally fetch a higher price than those that do (i.e. New Jersey). Since RPS solar requirements and SACPs vary from region to region, so do prices.
How do I sell my SRECs?
Flett Exchange account holders can login and sell their SRECs on our secure trading platform, anytime 24 hrs /7 days a week. Account holders can also call Flett Exchange at (201) 209-0234 Monday thru Friday 8AM-5PM and transact their SRECs over the phone. Flett Exchange is not an SREC aggregator. We operate a competitive online marketplace that allows buyers and sellers to negotiate price, quantity, and details of SRECs . Flett Exchange has a diverse pool of buyers on its platform and can help you monetize your SRECs immediately. We also offer SREC management services to help you automatically monetize your SREC each and every month.
Does Flett Exchange charge commissions for SREC transactions?
Yes. Flett Exchange has two options for selling SRECs. Clients can choose the do-it-yourself service or the managerial service. Sellers who choose the do-it-yourself service incur a $2.50 transaction cost per SREC. SREC sellers who choose the managerial option incur a 3% transaction for Flett Exchange monitoring, managing, executing, and transferring your SRECs via a tracking system.
How does Flett Exchange remit payment for SRECs?
Once a trade is completed on Flett Exchange, the seller transfers the SREC to "Flett Exchange, LLC" via the tracking system (i.e. PJM-GATS) and Flett Exchange mails a check to the seller immediately. Flett Exchange prides itself on reliable and immediate payment to our clients.
Can I buy or sell partial SRECs?
No, only a full SREC is tradable.
What states have active SREC markets?
Currently Delaware, Maryland, Massachusetts, New Jersey, Ohio, Pennsylvania, and Washington DC have active SREC markets which are trading. More are slated to come online in the future.