As a solar owner, for every megawatt of electricity produced by your system, you will generate a Solar Renewable Energy Certificate (SREC). SRECs are sold in full megawatt-sized blocks to utilities that need to meet a moving target of renewable energy contribution to the grid or pay a penalty. SRECS are sold separately from electricity, and the solar power generated does not need to be used or net-metered for the SREC to be created.
Utilities in Massachusetts must buy SRECs to meet their renewable energy mandate. Working with the Massachusetts Department of Revenue, utilities have arranged to pay solar owners an Alternate Compliance Payment (ACP) rather than the penalty they would incur for missing their goal. In Massachusetts, these ACPs are SREC payments that are paid to solar owners quarterly, and are not to be confused with rebates or tax credits. This is real money payable to the system owner in cash.
The actual value of a single SREC (1 megawatt certificate) is determined on a ‘commodity-like’ market where bid prices vary based upon the need of the utilities and the amount of SRECs available from all other solar owners. SREC value has averaged about $300 per certificate.
Current Massachusetts projects that qualify for SRECs receive from the State a commitment for ten years from the time of initial approval for SREC credit. Payments will be made every quarter for 40 quarters. Once approved, the term of payments cannot be changed; however, for future projects the term of SREC payments could change from the current 10-year. And, because Massachusetts currently has an SREC megawatt cap for all systems to be installed, it is important to get systems installed ASAP.
A solar system owner participates in the SREC market by: registering the system with the Massachusetts Department of Revenue (Mass. DOR) and the utility, and by opening an SREC broker account. Brokers are empowered to accumulate SRECs and portions of SRECs from many small solar owners and sell the SRECs in megawatt-sized packages. The broker gets a 5% fee. The broker system provides a way for solar owners to sell their SRECs directly to utility companies in a fair, efficient, and transparent way.
Plymouth Solar Energy installs the technology that reports your solar generation to the broker and Mass DOR. It will take several months to initiate your SREC payments. The quarter used to calculate your first payment will be based on when Massachusetts certifies your system as active and SRECTrade’s determination of the first full quarter for which the system is eligible.
At Plymouth Solar Energy, we install the SREC revenue grade reporting system. We register your system with The Department of Revenue and your utility, register you with SRECTrade (the broker) and walk you through the account setup process. We do it all for you.