Solar Renewable Energy Credits

SREC, (or Solar REC), stands for Solar Renewable Energy Certificate. An SREC is a tradable certificate that represents a commodity directly granted to rooftop producers of solar electricity in New Jersey. SREC's will be issued to you monthly as your solar panels generate each 1000 kiloWatt hours (see our solar term glossary). They are tradeable for 3 energy years. In rough numbers, a 5 kW system will usually earn you about 6 SREC's each year.

The New Jersey SREC Program provides a means for SRECs to be created and verified on your behalf. It also facilitates the sale of SRECs to electric suppliers (like PSEG or JCPL) that are required to invest in solar energy under New Jersey's Renewable Portfolio Standards (RPS - see our solar glossary). This investment can be them buying your SREC’s. All New Jersey electric suppliers are useing the SREC Program to show compliance with this part of the State's renewable portfolio standard.

An SREC is sold separately from the electric power the system generates. One way to sell is on an on-line broker, such as FLETT Exchange or directly posted on the NJ Clean Energy Web site.

The market price of an SREC is determined by supply and demand for SRECs. A number of factors including the cost of a Solar Alternative Compliance Payment (SACP) that utility companies (PSEG, JCPL etc.) are required to pay if they do not buy enough SRECs. The SACP price essentially establishes a price ceiling for an SREC.

All grid connected solar system owners in New Jersey can set up an internet electronic account for the sale and trade of SRECs on the NJCEP website.

Each MWh produced by your solar electric system earns you a an SREC. It does not matter if you use the electricity yourself, or send it back to the utility grid. Every watt that is metered (or is verified through another approved method of estimation) is eligible to earn SRECs.

We recommend that you sell your SRECs as you generate them or have an exchange like FLETT do it for you. Solar RECs do not increase in value - they are expected to decrease in value at a predictable rate.

The recent New Jersey Solar Energy Advancement and Fair Competion Act (A3520 - signed Jan. 18, 2010), a 15 year SACP was developed. This change represents a set amount of solar electricity or equivelent SRECs needed by NJ electric providers, as apposed to amounts formerly determined by actual production supply.

Current figures from the New Jersey Clean Energy Program show SREC values to be approximately $620 each as of May 2011.

The following chart shows estimates for SREC expected values. These values can flucuate based on SREC production and any changes adopted by the BPU. Visit the Clean Energy Web Site for updated information on SREC pricing.

Energy Year SACP (essential SREC ceiling price)
2010 $693
2011 $675
2012 $658
2013 $641
2014 $625
2015 $609
2016 $594

The new Solar Energy Advancement and Fair Competion Act (A3520) requires electric suppliers to purchase 195 Gigawatts (GWh) after June 2010 increaseing to 5,316 by 2026. The change protects those who install solar projects knowing they can be financed based on an expectation that the SACP levels are know and predictable.

The A3520 was signed into law on January 18, 2010, by former New Jersey Governor, John Corzine. This new law strengthens the development of solar energy and reinforces the Solar Renewable Energy Certificate (SREC) program.

Highlights of the Act which strengthen solar energy are:

New Jersey’s Renewable Portfolio Standard (RPS) for solar is extended to 2026. The SREC fulfillment has be changed from a percentage to a fixed requirement.
The Act requires electric suppliers to procure a minimum of 195 Gigawatt (GWh) hours of electrical power from solar generators in 2010 and increases to 5,316 Gigawatt (GWhs) by 2026. Previous requirements were based upon a percentage of electricity produced.
The BPU has established a 15 year Solar Compliance Alternative Payment (SCAP) schedule. This schedule encompasses energy years 2011-2026. Prior to this revision, the SACP only extended out 7 years.
If the average SREC price decreases for 3 years or if the supply of SRECs meets or exceeds demand for 3 years the requirement increases by 20%.
New Jersey Solar Renewable Energy Certificates (SRECs) now have a three year shelf life. NJ SRECs can be monetized for the current energy year and the following 2 energy years.