Solar energy renewable certificates (SRECs) are some of the most attractive solar incentives available in the country. Many states with renewable portfolio standards (RPS) have special “solar carve-outs” that require a certain amount of a utility’s energy production to come from solar. In these states, utility companies meet the requirement by purchasing SRECs from people producing solar energy.
If you own a solar panel system in a state with an active SREC market, you’ll want to work with a third-party SREC aggregator or broker to sell the certificates to utilities on your behalf. There are a variety of options when it comes to choosing an SREC broker; one of the more popular options solar panel system owners elect to work with is Sol Systems.
Working with Sol Systems
Sol Systems, based in Washington D.C., is one of the more well-known SREC brokers in the industry. They offer their services in Delaware, Maryland, Massachusetts, New Jersey, Ohio, Pennsylvania, and D.C. If you own a solar panel system in these states, you can sign an agreement with Sol Systems to handle the transaction of your SRECs. In addition to working with property owners, Sol Systems also works with utilities, municipalities, and corporate partners to develop and finance solar projects.
Signing up with Sol Systems is easy – they’ll work directly with your installer or financier to register your system, handle any necessary regulatory measures, and ensure you’re solar panel system is accurately reporting production numbers for the purpose of SREC generation. Once the setup process is complete, your system will start generating sellable SRECs.
Throughout the duration of your SREC program, your Sol Systems owner dashboard will display information about your SRECs, including contracts, transaction history, and more.
Your options with Sol Systems
Sol Systems provides the option to have as much or as little control over your SRECs as you’d like. The company offers brokerage contracts, fixed pricing agreements, or upfront purchase options for SRECs.
One option Sol Systems offers is known as “Sol Brokerage.” With this setup, Sol Systems will sell your SRECs at the highest value available on the open market. The price an SREC will sell for on the open market depends on many factors, including SREC supply and demand. Because Sol Systems collects a commission fee that’s based on the value these SRECs sell for, they work hard with their team of researchers and analysts to ensure that they sell these certificates at a high value.
Sol Systems also has some more unique options that are available to consumers. Depending on your market, Sol Systems may offer their “Sol Upfront” option. Under these agreements, Sol Systems pays you a one-time, lump-sum payment for your SRECs that’s equal to the size of your solar panel system in kilowatts (kW) multiplied by their current rate for your state. This is a good option for homeowners who want to receive their SREC benefit as soon as possible rather than waiting for them over time.
Sol Annuity & Sol Combo
If you prefer a fixed-pricing agreement, Sol Systems also offers two different options: “Sol Annuity” and “Sol Combo.” Under a Sol Annuity contract, Sol Systems would lock in the price for your SRECs for a contract term of 3, 5, or 10 years. As your system generates enough electricity to produce an SREC, Sol Systems pays you out quarterly for the pre-determined price, regardless of whether the SREC sells for more or less on the market.
Sol System’s Sol Combo is similar, but with some important differences: first, your contract will be for 10 years. Second, your fixed pricing will change after your third contract year (though remain at a different, fixed value for the next seven years of your agreement).
Cost of Sol System’s services
As a customer of Sol Systems, you may have to pay a commission fee for their services depending on the contact option you choose.
If you opt into a fixed-pricing or lump-sum arrangement with Sol Systems, you will not have to pay a commission fee. However, if you decide to opt into Sol Brokerage, you will be paying Sol Systems the greater of $5 or 5% sales commission. In a lower-value SREC market like Maryland, this would likely translate to $5, while in a market like NJ that fee is around $10.90 for selling an SREC at $218.
Choosing how to sell your SRECs
Sol Systems and other SREC brokers offer a variety of different options when it comes to selling your SRECs – so how do you choose the best one for you? It’s going to depend on your preferences, and how much you want to balance risk with reward.
Upfront purchase contracts are good options to consider if you’re looking to see savings more immediately and decrease your initial cost for owning a system. This option or a fixed-pricing arrangement are also worth considering if you would feel more reassured by the predictability and guarantee offered from fixed pricing.
However, homeowners who sell SRECs over the duration of their respective SREC programs can earn more money over the years. While there’s more risk associated with the process, SRECs can sell for more than an aggregator offers in a fixed pricing or upfront purchase arrangement.
To use an analogy, consider an upfront or fixed pricing agreement similar to investing in bonds, while a spot-market option is more similar to investing in stocks. Bonds are typically a more stable investment choice with less risk. Stocks, on the other hand, are much more volatile and the prices will fluctuate much more. Despite this volatility, your payoff is often higher with stocks than bonds.
Next steps for solar in states with SRECs
In SREC eligible states, EnergySage approved installers will be familiar with the market and your various options for SREC aggregators (including but not limited to Sol Systems). It’s worth researching your options and comparing both fees and risks associated with various brokers and agreements.
If you’re interested in exploring solar in your area and learning more about how much you can generate in SREC income by going solar, simply join the EnergySage Solar Marketplace. Quotes that installers upload onto our platform will automatically calculate an estimate for SREC earnings over 20 years in the “Production Incentives” section of the quote. These estimates will also be accounted for in payback period calculations and savings projections.