Massachusetts SRECs
IMPORTANT NOTE:
The Massachusetts SRECS program ends on November 2018
The Massachusetts SREC program will end on November 26th, 2018. After this date, MA residents will have available the SMART solar incentive program (Solar Massachusetts Renewable Target). Read more about it here.
Since January 2010, Massachusetts has had two incentive programs: SREC I and SREC II. The first was in effect from January 2010 to April 2014, and the second from April 2014 to November 2018.
What Are SRECs?
SRECs (Solar Renewable Energy Certificates or Solar Renewable Energy Credits) formulate an important part within the financial analysis of solar power. In simple terms, SRECs represent the way that solar energy is bought and also sold.
If you own a solar power system in Massachusetts and you’ve registered your system with the appropriate regional and state authorities, then you are issued one SREC by the regulatory authorities for every 1,000 kWh (kilowatt hour) of electricity you generate.
You can then choose to sell the SREC or use it yourself. Should you decide to sell it, it’s the same as adding electrical units onto the grid, and it’s a way of helping the environment because the process of generation is via renewable means. Keep in mind however, that in order to gain credit for SRECs sold, your system must be registered and also certified. More about the certification process below.
Additional income from the sale of SRECs means that the financing of solar technology is assisted because of the economic value of making an investment in solar power. In other words, solar system owners are able to recoup their investment by selling SRECs and also through state and federal incentives.
Depending on which state you are located, SRECs can sell for between $200 and $600 each, which equates to $0.20 to $0.60 per kWh. That’s at least twice the price of non-renewable electricity, so in essence you’re going to earn more money by selling SRECs than you can save on your electricity bill. And this is exactly why it’s so important to understand what a SREC is and how it works.
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Selling Massachusetts SRECs to Aggregators
When investing in a solar power system, make sure that your contract states you retain the rights to the SRECs you create. Should that not be in your contract, ask to have the clause added. Either you can sell your SRECs to a SREC aggregator providing you have a contract with them to do so, or you can sell SRECs at online auctions. SREC aggregators provide a middle-man service. Although the price they offer to the consumer will be a little lower than the price normally gained at an online auction, there’s more stability to be had through working with an aggregator. Further, all the paperwork is handled by the aggregator.
Certification
A solar system must be registered with an appropriate registry which is authorized by the state (such as PJM-GATS or NEPOOL-GIS), and the solar system must also be certified by state regulatory agencies so that the owner may then produce (and sell) SRECs. State regulatory agencies are usually either public utility commissions or public service commissions.
Once a solar system is certified and registered, SRECs may be issued by way of estimates or meter readings, depending on regulations of the state you reside within. Regular estimates are acceptable from smaller installations, where for larger installations, meter readings are necessary.
Solar installations must be registered to sell SRECs but they do not have to be registered within the state they reside. This provides for a definite advantage to the installation owner because it means they are able to sell to states with higher SREC values. The SREC aggregators will navigate the certification process for their customers.
