Solar Renewable Energy Certificates in Maryland
A Solar Renewable Energy Certificate or SREC is an officially designated representation of the production of 1,000 kilowatt hours (1 MWh) by a qualified solar panel system; essentially, it is a credit recognized by the government for 1,000 kilowatt hours of clean, renewable, solar energy. The system that produces the energy can be commercial or a home with a solar panel system, as long as it is properly certified and registered. SRECs are bought and sold on the market just as any other commodity like wheat or corn. They are usually purchased by companies aiming to meet certain environmental regulations or to gain tax breaks.
What Are Maryland’s SREC Policies?
In Maryland, power companies are required by law to obtain a minimum percentage of their electricity from alternative sources such as solar power. Rather than create a costly solar facility themselves, the companies may meet this requirement by purchasing SRECs from other companies or individuals who generate renewable energy with a solar panel system, including homeowners with a personal solar panel system installed.
In 2012, Maryland utilities must source at least 0.10% of their power from solar, meaning they will need to buy 64,554 SRECs. This percentage increases each year until 2020, when it hits a maximum of 2% or an estimated 1,454,385 SRECs.
Production of SRECs is regulated, and although there is no minimum size requirement for systems, Maryland law does outline a few stipulations. For example, residential solar hot water heaters qualify to produce SRECs as long as they aren’t being used to heat a pool or hot tub, and they use SRCC OG-100 certified collectors. However, they are limited to production of 5 SRECs per year.
How Can You Sell SRECs to the Utility Companies in Maryland?
The first step to begin selling SRECs is to get certified as a qualifying generator by the Maryland Public Service Commission (PSC). Then, you’ll need to establish an SREC account with the PJM-EIS Generation Attribute Tracking System (GATS). You can learn more about the process of certification at the PSC website.
Once you’re certified and have an account, you can then sell your SRECs on the open market; however, Maryland law requires its solar generators to offer their SRECs first to the state’s utility companies, and the PSC operates a website where generators can post such offers.
How Much Money Can You Make by Selling SRECs?
The weighted average price for SRECs varies by month, supply, demand, and many other variables. In 2012, it ranged from $180.97 in December to $279.93 in April. Based on these averages, if you have a solar hot water heater and max out your 5 allowed SRECs, you could earn anywhere from $904.85 to $1399.65 per year. If you have a solar panel system, you could earn even more.
As the requirements on utilities for solar power generation grow larger, so does the market for SRECs. Whether you have a solar hot water heater or a full roof of panels, there can be no doubt that this market offers the perfect way to offset the cost of your investment while also maintaining control of it.