When going solar in Pennsylvania, SRECs can help maximize the value of your system and minimize the time it takes to break even on your clean energy investment.
Generated with every megawatt-hour of electricity produced by a home solar panel system (we’ll explain exactly how much this is later), Solar Renewable Energy Credits (SRECs) and specifically Solar Alternative Energy Credits (SAECs) in Pennsylvania can be sold for cold hard cash, year after year.
If you’ve decided it's finally time to go solar in Pennsylvania, then allow us to show you exactly how SRECs work in PA, and what to expect in the alternative energy marketplace when your solar system is up and running.
What is the difference between an SREC and an AEC?
First, let’s clear up some confusion and establish exactly what we are talking about. With so many acronyms flying around the growing solar energy industry, it is always important to be thorough and do the necessary research to understand exactly what you’re getting into.
Solar Renewable Energy Credits (SRECs): In the United States, SRECs (sometimes called Solar Renewable Energy Certificates) are used to compensate solar energy system owners for the electricity that they produce. SRECs are specifically related to solar energy, but the acronym can also be used whenever solar power generation allows homeowners to cash in on another locally available green energy credit.
In the summer of 2022, eight states in the Eastern US have an active SREC marketplace. Although some states allow for the sale of SRECs generated outside of state lines, PA SRECs can only be created by solar energy systems that are installed and operating within Pennsylvania itself.
To learn more about how SRECs work, feel free to check out our complete guide to Solar Renewable Energy Credits in the US.
Alternative Energy Credits (AECs): An Alternative Energy Credit (AEC) is another renewable power generation incentive that can be earned when system owners produce electricity from a qualified alternative energy source, including solar panels.
Here, the key difference between AECs and SRECs is that SRECs are solar-specific, whereas Alternative Energy Credits can be generated through electricity produced by wind, hydropower, biomass, biologically derived methane gas, waste coal, solid waste conversion, and more.
When generating solar electricity at home, Pennsylvania producers can earn Solar Alternative Energy Credits (SAECs), which is a solar-specific AEC that is essentially the same thing as Solar Renewable Energy Credits (SRECs). Thus, the acronyms “SREC” and “SAEC” are often used interchangeably.
Alright, that’s enough acronym talk for now. Let’s look at exactly how the PA SREC marketplace works for residential solar producers.
How does the PA SREC market work?
As we mentioned earlier, qualified solar energy system owners can earn One SREC for every megawatt-hour(MWh) of electricity that they generate. To put that in perspective, one megawatt-hour of solar electricity is equal to 1,000 kilowatt-hours (kWh), and in 2020, residential electricity users in Pennsylvania consumed an average of 846 kWh per month.
Extrapolated to 10,152 kWh (or just over 10 MWh) per year, this means that a solar energy system designed to power an average home in Pennsylvania will create about 10 SRECs every year it is eligible.
Once created, Pennsylvania solar producers are then free to sell their SRECs (or SAECs) on the open market. Alternative Energy Credits in Pennsylvania are registered and tracked within the PJM Generation Attribute Tracking System (GATS), and in the summer of 2022, PA SRECs are also eligible for sale in Ohio.
Redeemable for real cash payments, SRECs are one of the most valuable Pennsylvania solar incentives that homeowners can take advantage of to maximize the value of their renewable energy system.
SREC Program History
While the first modern oil well in America was famously drilled in the Keystone State, Pennsylvania has always been a leader in the US power industry and remains the third largest net supplier of energy across the country. Looking to create a more sustainable future, PA SRECs were developed to incentivize solar development and help Pennsylvania achieve its renewable energy and greenhouse gas emission goals.
Under the Alternative Energy Portfolio Standards Act (AEPS), electricity distribution companies and electricity generation suppliers in Pennsylvania must retain a percentage of their electricity portfolio to be produced by alternative energy resources, including a specific carve-out incentivizing PV solar installations.
Today, Pennsylvania’s Solar Alternative Energy Credits (SAECs) allow utilities and other energy entities to purchase solar power directly from the homes and businesses that produce it.
Getting Started with SRECs or SAECs
To begin earning SRECs or SAECs in PA, solar producers must submit an application to the Pennsylvania Public Utility Commission's (PUC) Alternative Energy Credit Program to become a qualified alternative energy facility. Once approved by the PA PUC and registered on the Generation Attribute Tracking System (GATS) trading platform, solar energy system owners can then earn and sell SRECs to interested buyers.
By participating in the PA SREC program, you can:
- Earn income for the passive performance of your solar energy system
- Help Pennsylvania achieve its renewable energy goals
- Maximize the value of your clean energy installation
The Market Price of SRECs in Pennsylvania
Much like utility electricity rates, Pennsylvania SREC prices are always changing. At the start of 2023, PA SREC prices were being sold for an average market rate of $45.00 per Solar Alternative Energy Credit.
When trying to get the best price for your renewable electricity generation, it is important to know that PA SRECs have a useful life of 3 years. Essentially, what this means is that any solar credit earned in 2023 can be sold in 2023, 2024, or 2025 before it eventually expires. By partnering with Palmetto, we help you ensure that your solar credits are sold at a fair market value in PA.
How To Sell Energy Credits To Utility Companies
After you install solar, you can only accumulate and sell energy credits to utility companies if you own your solar panel system, whether bought outright or financed. If you lease or rent your solar panels from a third-party provider, then you will not be able to earn energy credits and sell them to utility companies.
Once registered with the Pennsylvania Public Utilities Commission and activated within the Generation Attribute Tracking System (GATS), solar producers can safely sell their energy credits to utility companies through any trusted platform. When you work with Palmetto to sell your SRECs in PA, we work directly with SRECTrade, a respected credit broker leading the way in the solar industry.
Earn More From Your Solar with Palmetto
With end-to-end customer service and extreme attention to detail, Palmetto works with Pennsylvania solar energy producers to coordinate their SRECs through SRECTrade and create a simple, stress-free experience.
To avoid the market fluctuation of Alternative Energy Credits in PA, we help residential solar energy system owners secure a fixed, upfront payment for their SRECs within 90 days of activation.
We always keep the best interest of our customers in mind, and offer a concierge-style service for every step of the solar process. From design to installation and maximizing the value of your SRECs, Palmetto is here to help you save on your electric bills!
Get started today with a Free Solar Design and Savings Estimate in Pennsylvania.