The transition to a more sustainable future is driving a worldwide surge in solar energy adoption. The installation of solar (Photovoltaic) panels on your commercial & residential property will allow you to take environmental benefits and earn through the sale of Solar Renewable Energy Certificates (SRECs).
Currently, the cost of SRECs ranges between $5 to $500 approximately, depending on the American state, according to SolarReviews. Depending on your system’s production and the above-mentioned variables, this amount can be significantly higher or lower.
If you’re considering solar installation or have already done so, you might wonder how much you can earn by selling SRECs. Let’s delve into it!
Potential Earnings from SRECs
Every time a solar panel system generates 1 megawatt-hour (MWh) of electricity, an SREC is produced. However, the price of SRECs varies based on:
Supply & Demand
The price of SRECs is mostly set by supply & demand, just like the price of any other market goods. If there are a lot of solar systems that produce more SRECs than are needed, the price of SRECs will usually go down. On the other hand, if there aren’t enough SRECs and demand is high because of Renewable Portfolio Standards (RPS), prices will go up.
State Renewable Portfolio Standards (RPS)
The RPS for each state says how much of its energy must come from renewable sources by a certain year. If a utility company can’t meet the minimum percentage, it may have to buy SRECs to avoid paying a fine. SREC prices could be higher in states with high RPS goals, especially if there aren’t enough SRECs.
Alternative Compliance Payments (ACP)
If utilities don’t meet their RPS responsibilities, they have to pay the ACP fee. The ACP sets a limit on how much SRECs can cost. If getting an SREC is cheaper than paying the ACP, utilities will choose to buy the SREC. On the other hand, if SRECs cost more than the ACP, utilities will just pay the fee. So, SREC prices tend to be around the same as the ACP rate.
Solar Installation Costs
SREC supply is affected by how much it costs to install solar energy systems. If the cost of installing solar panels goes down and more people do it, the number of SRECs is likely to go up, which could make prices go down.
Some states’ RPS have “solar carve-outs” that require a certain amount of energy from solar power. This can make more people want SRECs, which could drive up their prices.
Long-Term SREC Contracts
Long-term contracts could be made for utilities or other buyers to buy SRECs at a set price. These contracts can keep the price of SRECs stable and stop the market from going up and down a lot.
Solar Market Speculation
Just like other commodities, speculation can play a role in SREC pricing. If stakeholders anticipate a rise in demand or decrease in supply, they might buy up SRECs, driving up the price.
Legislation & Policy Changes
Changes in how states or the federal government handle green energy can affect the price of SRECs. For example, if a state raises its RPS goals or adds new solar energy benefits, this can change how much people want to buy SRECs.
The price of an SREC can be affected by how long it can be used. If an SREC only lasts for a short time, it might not be as useful as one that lasts longer. So if you are thinking about “how to sell srecs” this might be the biggest factor to consider.
Tips to Maximize Your SREC Earnings
Optimize Solar Panel Placement: Make sure your solar panels are placed at the best angle and direction to get the most sunlight. This will ensure the efficient working of solar panels and thus emphasizes the SREC credits.
Maintain Your Solar Panel: Clean your solar panels often to get rid of dust, dirt, and other particles. This ensures that the most work gets done. Also, you should often check the wiring and connections in your solar panels systems.
Monitor System Performance: Use tools to keep an eye on how well your solar panels work. If you can find drops in production quickly, you can find answers to problems more quickly.
Upgrade Your System: As solar technology gets better, newer screens work better. If the return on investment makes sense, you might want to replace older screens.
Stay Informed on SREC Prices: SREC prices can change based on how much people want to buy them. Knowing what the rates are can help you decide when the best time is to sell.
Long-Term Contracts: Some people who buy SRECs will offer long-term leases. This can give you stability, but make sure the rates are fair.
Research State Incentives: Some states give extra incentives for making electricity from the sun. Make sure you take advantage of all the benefits your state offers.
Opt for High-Efficiency Panels: Even though they cost a bit more, solar panels with a high level of efficiency can produce more energy, which will lead to more SRECs over time.
Avoid Shading: Make sure that trees or buildings near your solar panels don’t block the sunlight, especially during the hottest parts of the day.
Choose the Right Installer: Not every solar contractor is the same. Do some research and find a reputable provider who knows how the SREC market works and can help you.
Even though the money you can make from SRECs depends on things like where you live, how big your solar system is, and what the rules are in your area, it’s a strong incentive to switch to using green energy sources. Through the solar installation services we offer at Infinity Energy, solar system users can make more money by selling SRECs.
We know that choosing to install solar panels can be a big choice. So, we’re happy to offer you the benefits of clean, sustainable energy and the chance to make money with SRECs through our solar services. Get an estimate today!