Renewable Energy Credits (RECs or sometimes referred to as (SRECs) are a solar incentive that allows homeowners to sell credits for their solar system's clean energy production to the investor owned utilities (IOUs) in Illinois. A solar system owner will earn one REC for every 1000 kilowatt hours (kWhs) produced by their solar system. A REC can be worth as much as $250 in certain markets.
RECs exist as a result of a regulation known as the renewable portfolio standard (RPS). Renewable portfolio standards are state laws that require utilities to produce a specific percentage of their electricity from renewable resources. Nearly 30 states and Washington, D.C. have an RPS, and eight states have a renewable portfolio goal. Illinois has both an RPS and a renewable portfolio goal, which ensures that this funding mechanism for solar projects is here to stay.
To meet their RPS requirements, publicly owned electricity providers must obtain renewable energy credits or certificates (RECs), which serve as proof that they have either produced renewable electricity themselves or paid someone who is producing renewable electricity for the right to “count” that electricity themselves. Many renewable portfolio standards also have a solar carve-out, which requires that a minimum percentage of electricity sales in that state come specifically from solar power. In those cases, SRECs (solar renewable energy credits) are used to account for solar electricity production.
SRECs are just like RECs, but specific to electricity that comes from solar panels. For every megawatt hour (MWh = 1,000 kWhs) of electricity that a solar energy system produces, a corresponding SREC is created. Just as RECs are bought and sold to transfer the right to count renewable electricity, SRECs can be bought and sold to transfer the right to count solar electricity. Some states with solar carve-outs have established an SREC market to facilitate the sale of SRECs. In Illinois, solar panel system owners can sell their SRECs through a program administered by the Illinois Power Agency to utilities that need to buy them in order to meet their solar carve-out requirements. Illinois' current RPS goal is for 25% of the state's electricity to come from renewable sources by 2025.
The amount of money a solar panel owner will receive for his or her SREC varies by state, and can range from under $50 to over $250 per SREC. This price depends on market factors of supply and demand and state specific legislation. The sale of renewable energy credits can provide a significant funding mechanism for your next solar project. Let the experienced staff at WindSolarUSA advise of your current REC pricing and provide you with a cost model showing the financial performance of a system that is custom designed for you. Should you decide to move forward with your project, we'll help you complete all of the required paperwork for a seamless project/receipt of your renewable energy credit incentive(s) effectively and efficiently!
Click here to learn more about SRECS specific to Illinois.
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