pennsylvania srecs

SRECs in Pennsylvania: prices, projections, and program status

If you’re considering installing a solar panel system in Pennsylvania, one incentive to be aware of is solar renewable energy certificates (SRECs). Pennsylvania is one of the few states that offers this performance-based incentive to property owners generating solar electricity. Pennsylvanians who buy and install a solar panel system can earn hundreds of dollars each year by selling SRECs.

This article describes how the Pennsylvania SREC program works, explores current prices (and price projections) for PA SRECs, and discusses the future of the SREC program so that you can make a well-informed decision about going solar in the Keystone State.

How Pennsylvania’s SREC program works

Pennsylvania has an alternative energy portfolio standard (APS) that requires its utilities to produce 18 percent of their electricity from renewable resources in 2021. Their APS also has a “solar carve-out,” which mandates that 0.5 percent of that renewable electricity target must come exclusively from solar power.

SRECs are a mechanism used to track the amount of electricity that comes from solar. You generate one SREC for every megawatt-hour (MWh) of electricity your solar energy system produces. For example, the average PA homeowner buying a 9-kilowatt system typically generates about 10 MWh of solar electricity per year, equivalent to 10 SRECs.

Utilities purchase SRECs to comply with the solar component of the RPS. The owners of solar panel systems – from individual homeowners to large-scale solar developers – can sell SRECs to utilities through the state’s SREC market.

In Pennsylvania, an SREC has a useful life of three years, which means that SRECs you generate in 2021 can count towards 2021, 2022, or 2023 compliance periods. Importantly, only individuals who own (rather than lease) their solar energy system are eligible to sell SRECs into the PA SREC market.

PA SREC prices (current and projected)

The price of a single SREC isn’t fixed in Pennsylvania – it varies based on supply and demand within the market and can change from day-to-day. According to SRECTrade, one of the biggest SREC aggregators in the country, Pennsylvania SREC prices are hovering around $40 in the summer of 2021.

The future price of SRECs in Pennsylvania depends on market conditions. Recent prices are relatively high, but pending legislation could make some significant changes that would impact both supply and demand for PA SRECs in the future.

Status of the PA SREC program

Pennsylvania experienced relatively low SREC prices throughout 2018. This was the result of two major factors: the size of the solar carve-out and out-of-state solar projects. Pennsylvania has a relatively small solar carve-out in comparison to other states with active SREC markets, which means demand was lower. Additionally, PA previously accepted out-of-state projects into PA’s SREC program which contributed to an oversupply in the market. However, in late 2017, Governor Wolf signed a law that requires all new systems participating in PA’s SREC program to be in-state projects moving forward, aiming to fix the oversupply issue.

Governor Wolf also announced his support for PA State Senate Bill 600, which would’ve updated the state’s renewable portfolio goals. In addition to increasing the overall target for renewable energy generation, the bill proposed upping the solar carve-out from 0.5 percent by 2021 to 10 percent by 2030.

The bill also proposed restructuring the SREC program to be more similar to that of New Jersey or Massachusetts in the sense that it would have a specified eligibility term (15 years), as well as fixed and pre-determined alternative compliance payments (ACP), which are the fines that utilities need to pay if they don’t meet the solar generation requirements as mandated by the alternative energy portfolio standard. As the PA program stands today, ACPs are set at 200 percent of the average SREC price paid by power providers in that given year and there is no end date to SREC program eligibility.

Unfortunately, the bill was never voted upon during the 2019 – 2020 regular session. However, in 2021, PA State Senators Daniel Laughlin and Art Haywood introduced a new version of the bill, PA State Senate Bill 501. This bill would increase the solar carve-out from 0.5 percent in 2021 to 5.5 percent in 2026. Such a change has the potential to increase demand for SRECs and, consequently, result in higher SREC prices down the line.

How you can benefit from Pennsylvania SRECs

How much you’ll earn from selling SRECs depends on the price of each certificate and how much solar electricity your system generates. The best way to get an estimate of how much you can earn from SRECs is to look at multiple options. By joining the EnergySage Marketplace, you can compare up to seven online quotes from local Pennsylvania solar installers. All quotes on EnergySage will include an estimate for SREC incentives over 20 years that’s based on the proposed solar panel system and the current SREC market values.

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About Kerry Thoubboron

Kerry is an expert in all things solar! She's worked in the industry for more than 6 years, starting her career as an Energy Advisor dedicated to helping customers compare their options and make well-informed solar decisions. She graduated from Boston University with a degree in Environmental Analysis and Policy. Outside of work, you can find Kerry snowboarding, watching The Office, or having passionate debates about which New England state is best (spoiler: it's Vermont).

3 thoughts on “SRECs in Pennsylvania: prices, projections, and program status

  1. Chirag Patel

    I had Tesla install my solar panels but opted out of them giving me $1k for my SREC’s. I am trying to register online to sell them but can’t find a link to do that. Does anyone have experience in this area, or do I basically have to sign up through a broker and give them a fee to sell my SREC’s?

  2. MATT

    the srec program is going on for the foreseeable future, there is no set end date, but like everything that can change but we don’t expect it to any time soon. the srecs expire after 3 years but you want to sell them as fast as you generate them because the older they get the less they are worth unless the market jumps significantly in a short period of time. then it might make sense to hold on to them for a couple months. I highly encourage you to sit down with a consultant and get an actual breakdown for your specific system, i suggest PowerHome Solar if you can, hope this helps!

  3. Wallace

    I am doing research into solar for my home. I understand the federal incentive and how the SREC program works, but, I am confused on the length of the SREC availability in Pennsylvania. I have heard 5, 10 and 15 years. I looked on line and found SB 600, but, there are no specifics on end date. I do know that by year 3 you need to sell off the SRECs you have accumulated.
    Thank you.


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