All About Solar Renewable Energy Credits (SRECs)

What are SRECs?

Solar Renewable Energy Credits (SRECs) are credits that are minted when a solar energy system generates 1,000 kilowatt hours (kWh), or one megawatt hour (MWh), of electricity. To put this unit into perspective, one MWh of electricity is roughly equal to one light bulb left on for six months! These credits exist as part of state Renewable Portfolio Standards, which are state mandates that require a certain percentage of energy generated within the state to come from renewable sources. Some states allow energy producers and utility companies to purchase SRECs in order to meet the renewable energy requirement mandated by the Renewable Portfolio Standard.

Companies and utilities can then buy these credits from solar generators within the state, including residential solar systems. The SREC values will fluctuate based on supply and demand, as well as the Alternative Compliance Payment, which is the fee that energy producers must pay if they do not meet the RPS. States with SREC programs are:

• Massachusetts
• Delaware
• Maryland
• New Jersey
• Pennsylvania
• Ohio
• Virginia
• Washington DC

Direct Energy customers who live in an SREC program state and own their solar energy system may be eligible to generate and sell SRECs. Direct Energy customers have the option of having Direct Energy manage their SRECs on their behalf, as well as the option of self-managing or signing up for a third-party manager, like SRECTrade.

Photo courtesy of news.energysage.com

How does SREC reporting work?

Omnidian takes production data directly from your solar monitoring device and reports it to SREC-generating agencies (PJM-GATS, MASS CEC PTS, and NEPOOL GIS). These agencies require regular reporting in order to mint SRECs, and are open for reporting during the last five days and first five days of every month. During this window, Omnidian will submit the data to the agencies on your behalf.

To ensure this process runs smoothly, your responsibility as the homeowner is to make sure your solar monitoring device is communicating production data (via internet or cellular connection). If your system stops reporting for a few days, production data will automatically backfill within the production portal, and SRECs will not be affected. If your system stops reporting for an extended period of time, especially longer than three consecutive months, SREC reporting may be impacted and could result in the loss of SRECs for that reporting period. All homeowners have access to production monitoring portals and are encouraged to check their system’s production regularly.

When do I receive my check?

Direct Energy is an SREC aggregator, meaning many systems’ SRECs are combined into large batches and sold at certain times of the year for the going market rate. Direct Energy homeowners are provided with one lump sum payment for the full production year’s SRECs. Depending on which state you live in, your production year and issue date of checks vary:

Why is my check smaller/larger than previous years?

SREC payments are determined by your system’s actual energy production and the sale price of your SRECs. The sale price can fluctuate based on supply and demand. Your system production can also fluctuate based on weather or if you have issues with monitoring.

How can I tell if my system is reporting data?

If your system is reporting in your online portal, then we have reported your SREC production data. If your system is having monitoring/communication issues, reference My system isn't communicating data: What should I do?

Once the issue is resolved, we may be able to backfill your production data if your solar monitoring device has the capability. At the next reporting cycle, Omnidian will submit any production data that has populated since the last reporting cycle. It is then up to the discretion of the SREC agency whether or not they will be able to mint the credits. Typically, systems in Massachusetts can only backfill production data within the production quarter, while systems outside of Massachusetts can backfill production data up to 12 months following the month of production.

What if my contract expires?

Omnidian is also the point of contact for renewing your SREC brokerage agreement. This agreement can be renewed every five years for the lifetime of your system.

If your contract is due to expire, Omnidian will send you an email three months ahead of time with a renewal contract. When the renewal contract is signed, the start date will be the day following the expiration of the previous contract.

If you do not wish to renew your contract, you may fill out an SREC management waiver and take over management of your SRECs. You will need to create an account with your SREC agency, and then Omnidian will transfer your system’s management to you.

What if I move? How do I transfer my SREC contract?

If you decide to move, there are a few forms needed to transfer the SREC contract to the new homeowner. Contact us so we can assist you with the necessary paperwork.

Note that if an SREC-accruing system is sold to a new owner, SRECs must be transferred to the new owner of the home. It is not permitted for the seller of a home to retain rights to SRECs after they have sold the home and transferred ownership of the system.

What is the SREC-II Program in Massachusetts?

Massachusetts began its SREC program in 2010, which is now called SREC-I. Massachusetts then created the SREC-II program in 2015, and all systems developed and energized after January 1, 2016, and before 2019 are included in the SREC-II program.

SREC-I & SREC-II differ in two key areas: The SREC factor and the SREC sale price. SRECs generated in the SREC-II program are worth more than SRECs generated in the SREC-1 program, but they have an SREC factor of .8. This means that production data from an SREC-II system is multiplied by .8, then that total is used during the SREC calculation.

For more information on the SREC – II program, visit the Massachusetts Department of Energy Resources. For further explanation on SREC factors and their role in SREC calculation, visit the Massachusetts Clean Energy Commission.