Solar Renewable Energy Credits (SRECs) provide significant incentives for Maryland homeowners to switch to solar installations and maximize their output. The SREC Program offers several options for homeowners to earn extra money based on the amount of renewable energy a household generates.
This article explains how homeowners can sell their Solar Renewable Energy Credits in Maryland to pay off their solar installations. In addition to saving on energy bills with a more renewable and efficient power source, homeowners should understand this valuable potential commodity to maximize its financial and environmental impact on their homes.
What is an SREC?
When the Governor of Maryland reauthorized the Greenhouse Gas Emissions Reduction Act in 2019, Maryland’s energy suppliers were required to reduce emissions by at least 40% by 2030. To accomplish this, energy suppliers strive to produce cleaner, more renewable energy. However, their infrastructure cannot always meet the goals established by the Renewable Portfolio Standard, which holds them accountable to the new state regulations.
As a result, Maryland energy suppliers purchase renewable energy from residential solar installations in the form of Solar Renewable Energy Credits. This helps them meet their quotas for greenhouse gas reductions while incentivizing homeowners to opt for more efficient residential power solutions.
In concrete terms, an SREC is a unit of renewable energy translated into an economic commodity. When a home generates 1 MWh of solar electricity, it earns 1 SREC. However, SRECs are sold separately from conventionally produced power. They have dedicated markets with distinct standards of supply and demand that determine their value at a given time.
Benefits of SRECs in Maryland
By living in one of the nine states with an SREC market, Maryland homeowners can pay off their solar installations faster and qualify for additional tax reductions by generating and selling these credits. Energy suppliers want to avoid financial penalties for failing to meet their portfolio standards, so they often offer homeowners competitive rates for their solar energy credits.
Homeowners with an up-to-date solar utility can generate these credits even if they do not use the energy. An SREC is not a tangible resource such as conventional electrical power. Its sale is similar to trading an economic commodity, such as a stock. It represents a market value, as opposed to being a concrete resource.
This difference means homeowners can accumulate and trade SRECs in Maryland similarly to stock portfolio trading. This allows them to delay selling their credits until the market is more favorable or sell quickly to meet financial needs. According to current legislation (Senate Bill 783), SRECs expire after 5 years from the date they were generated, up from 3 years under the previous laws.
Many homeowners wonder if they can time the sale of their SRECs based on market value. For example, the value of 1 SREC at the time of writing is $58. However, SRECs are valued less like products and more like stocks. Most homeowners should not try to play the market. Instead, they should partner with an SREC aggregator, which buys SRECs from homeowners and sells them in bulk to utility providers.
Due to Maryland legislation that increases the price ceiling on SREC value year on year, homeowners should sell their SRECs as soon as they are generated. Notably, “Certified SRECs” can be sold at 150% of their value according to the certification requirements.
Under the current legislation, solar arrays installed earlier than January 1, 2028, are eligible for this classification. However, not all credits can be certified, so homeowners should ask their solar installers and SREC aggregators how to qualify.
How to Sell Energy Credits in Maryland
Homeowners in Maryland have two main options to sell their SRECs:
- Maryland’s Environmental Information Services (EIS) offers a bulletin board where homeowners can post their SRECs for sale. Once posted, potential buyers will contact homeowners through the portal, similar to a Craigslist sale. Though this option may seem a hands-off way to sell credits, it is cumbersome. For example, homeowners must manually report the sales figures.. Experienced SREC sellers advise against this method.
- Homeowners can also actively seek a buyer for their SRECs through dedicated SREC aggregators such as Solsystems. These companies access the solar system’s production data and automatically register and sell the owner’s SRECs with no extra hassle beyond a small fee. The owner’s money can be directly deposited into their bank accounts. Several sites, such as SRECTrade provide brokers with tools to access the market and sell residential credits from multiple homeowners in bulk to energy suppliers.
This is the better option for homeowners as it offloads the issues of compliance, trading, and calculation onto professional aggregators. Once their solar arrays are installed, homeowners can track their savings in their energy bills and bank accounts without additional research.
Energy Select Provides SREC Guidance in Maryland
Maryland homeowners can use their solar installations to generate Solar Renewable Energy Credits to pay off their installations faster, earn extra money, and qualify for state benefits. To sell these credits, homeowners must be aware of the SREC market, which has several dedicated points of sale, or hire a broker to manage their accounts.
Unfortunately, not all solar installations are eligible for SRECs. At Energy Select, our experienced solar installers make sure that our clients receive high-quality solar arrays, the education they need to generate and sell SRECs, and long-term support with continuous system upgrades. Contact our team today to start selling excess solar renewable energy credits in Maryland.