In an effort to meet its clean energy goals, Massachusetts has implemented several regulations around clean energy production. One such regulation requires electricity providers to obtain a certain amount of the electricity they sell from renewable sources, like solar power.
The Renewable Energy Certificate (REC) program was created to help electricity suppliers meet their clean energy production requirements and to incentivize solar installations within the state. Solar owners earn one REC for every megawatt-hour of electricity their system generates and can sell their RECs to utility companies and other interested parties in an open marketplace.
Keep reading to learn more about solar Renewable Energy Certificates and how you can benefit from the RECs your residential solar system produces.
A Renewable Energy Certificate is a “certificate” that proves a certain amount of electricity was generated by renewable sources.
One REC is created every time a qualifying renewable energy facility generates 1 megawatt-hour of electricity. Grid-tied home solar systems are classified as qualifying renewable energy facilities, which means solar owners earn RECs simply by producing their own electricity. RECs generated by solar photovoltaic systems are referred to as solar RECs (SRECs).
Solar RECs have monetary value and can be bought and sold on an open marketplace.
SRECs are bought and sold in an online marketplace called the Class 1 REC Open Market through intermediaries called REC aggregators. Aggregators combine SRECs from a number of sources so they can be sold in bulk. This makes them more attractive to buyers who want to minimize costs by purchasing their RECs quickly, from as few sources as possible.
If you go solar with Boston Solar, we will set you up with a top aggregator, Knollwood Energy, that will sell your RECs for you on a quarterly basis.
RECs are currently worth about $36 each (though the market value fluctuates) and are sold on a quarterly basis. To determine how much you will earn per quarter with RECs, multiply the number of SRECs your system produced in the quarter by the current market value.
Let’s look at an example. Suppose your system produced 4 megawatt-hours (4,000 kWh) of electricity this quarter. Four megawatts multiplied by the current SREC market value ($36) equals $144. Your aggregator will take a fee (Knollwood Energy takes a fee of $5 per REC) and write you a check for the remaining amount, in this case, $124.
By selling your SRECs, you’ll receive four checks a year.
Selling SRECs is just one of the many financial benefits of solar panels. With a home solar system, you’ll also be able to reduce your electricity bills, participate in additional solar incentive programs like net metering, and qualify for the 30% federal solar tax credit. Plus, you’ll be using clean, renewable energy that’s good for the environment and reduces your reliance on fossil fuels.
Boston Solar is the leading solar installation company in Massachusetts. We’ve been in business for over a decade and have installed more than 5,000 solar energy systems. Our expert team can tell you more about solar incentives like SRECs and help you decide whether solar panels make sense for your home.
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