Now that we have SREC markets across our entire service area—Virginia, Maryland and DC—many of our customers have questions about exactly what SRECs are and how they work. Specifically, we’ll lay out the process for registration with our preferred broker, Sol Systems, below. So if you’re wondering how it all works, read on!
What exactly is an SREC?
Solar Renewable Energy Credits (SRECs) exist in any state where there is a law mandating the amount of solar energy required on the grid each year. The mandate is called a Renewable Portfolio Standard (RPS). The RPS requires our largest utilities to provide a certain amount of renewable energy every year or pay a fine. Purchasing SRECs from solar owners is a way for the utility to meet that requirement. You can learn more about the new Virginia SREC market created by the Virginia Clean Economy Act here, and you can learn more about renewable energy credits in general, here.
How do SRECs work?
SRECs are earned every time you generate 1,000 kWh of solar energy. A general rule of thumb is that a 10kW system would generate roughly 12 SRECs per year.
Prices for SRECs fluctuate like commodities. Once you’re registered with a broker, like Sol Systems, they will sell your SRECs for you at whatever the current selling price is. Pricing is dependent on how much solar energy the utilities need in order to comply with the state’s RPS at any given time.
What is Sol Systems?
In a nutshell, Sol Systems is a broker that helps you sell your SRECs to the utilities on the open market, ensuring that you have a fair price and full transparency into your account.
There are other companies that will manage your SRECs for you, but we prefer working with Sol Systems because they have the most streamlined system and take a smaller percentage fee than others for the market price per SREC (the greater of $5 or 5% per SREC). It’s your choice, though, so please feel free to do some research if you want to manage the process on your own with another company.
What’s the Difference Between the Contract Options at Sol Systems?
Sol Systems offers several choices for SREC trading. We can’t recommend one or the other for you, but here are the different choices:
1. Sol Brokerage
Sol Brokerage pays the market price per SREC sold. Sol Brokerage customers’ payments are paid a weighted average of all SRECs sold in a given quarter, less the transaction fee, for each SREC sold. Sol Brokerage is best suited for customers that are willing to take on price and policy risk in order to receive the highest possible payments per SREC.
2. Sol Profit Share
Sol Profit Share customers are paid a guaranteed, fixed price per SREC plus additional profit when SREC market prices rise above a set threshold. Even if market prices fall, the customer still receives the fixed price per SREC. Sol Profit Share is best suited for moderately risk-averse customers that are interested in protecting their expected revenue from SRECs, without forfeiting additional profit when market prices rise.
3. Sol Annuity
Sol Annuity pays one fixed rate per SREC sold. Sol Annuity customers are paid a
guaranteed, fixed price per SREC, no matter the market rate for a set term. The
fixed price is set and stated in the customer's contract. SREC payments to the customer are unaffected by changes in the market. Sol Annuity is best suited for moderately risk adverse customers who are interested in protecting their
expected revenue from SRECs.
4. Sol Combo
Sol Combo pays one fixed rate, then a second fixed rate, per SREC sold.
Sol Combo customers are paid a guaranteed, fixed price per SREC for the first
period of the contract (usually 3 years) and then a different fixed rate for the
second period (usually 7 years). Both fixed prices are set and stated in the
customer’s contract. Sol Combo contracts are very similar to Sol Annuity contracts, since SREC payments are unaffected by changes in the market.
5. Sol Upfront
Sol Upfront customers receive one upfront, lump-sum payment for the duration
of their contract (usually a 15-year term). The payment amount is calculated
from the system size (capacity in kW DC) multiplied by the Sol Upfront rate
offered by Sol Systems. Sol Upfront is best suited for risk-averse customers that
are interested in receiving immediate cash for their solar system.
How Do I Register?
If you’re an Ipsun customer, we’ll get you started by adding your name to Sol Systems’ registration list. Then Sol Systems will send you an email letting you know it is time to select your contract and will present you with your contract options. Once you select a contract, you will receive an email with your contract and Schedule A form to sign to start the registration. In the meantime, you can email us at srec@ipsunsolar.com if you have questions.
Here is an overview of the registration process:
Step 1: Watch for the “confirm your account” email from Sol Systems
Step 2: Create your account in Sol Systems’ SREC portal. Once you receive the confirmation email from Sol Systems and you click the link to confirm your account, it will take you to https://srecs.solsystems.com/users/sign_in where you will set your password and log into your account.
Step 3: Watch for the email to select your product (contract) offering from Sol Systems. Once we, as your installer, verify your system information with Sol Systems, you’ll receive an email with a link to select a product offering. Click the link, review your product options, and make your selection.
Step 4: Execute your contract and Schedule A form. You will receive your selected contract and Schedule A form via DocuSign. Please make sure you execute both the contract and the Schedule A form. Within the DocuSign envelope, you will also receive detailed instructions on how to sign up for direct deposit.
The Schedule A form states that “the generation owner (solar owner) gives Sol Systems the rights to operate and trade on the customer’s behalf within the SREC tracking system.”
Step 5: Sol Systems may ask you to grant permission to access your Enphase data so that you can participate in auto-reporting. Enphase will send you a notification to approve auto-reporting, either via email or in your Enlighten app. Click approve and you should be good to go. In order to receive this notification, you must have access to Enphase Enlighten. If you have not yet set up an account in Enphase Enlighten, do so by following the steps in this video: https://youtu.be/1YCkS8pP3ck
Step 6: Check that all required information and documentation is submitted in
the portal and sit tight! Once you create your account, execute your contract and Schedule A form, it can take time for them to get you set up in their system. We find that it’s about 80 days for DC, and about 40 days for VA and MD. You don’t need to do anything during this time. You can check the status of your system’s registration within your portal. Sol Systems will send you an email when your system has been fully approved.
Step 7: Provide Sol Systems with your meter’s lifetime reading
Once Sol Systems gets the notification that your application has been fully approved, they may reach out to you to ask for your meter reading. This can seem confusing, but all they’re asking for is the total kWh that your system has produced in its lifetime so far. You can find this information in your Enlighten App under My Enlighten View> Energy> Lifetime. See the screenshots below for the mobile and desktop views of this.
If you have any trouble locating the information, just give us a call at 866-484 7786 and we’ll help you out.
How long does it take to start generating SRECs, and when will I receive payment?
Customers typically receive their first payment within 3-6 months after signing
up with Sol Systems.
Sol Annuity, Sol Profit Share, and Sol Brokerage systems are paid quarterly for SRECs in February, May, August, and November. Quarterly payments are posted by the last business day of the month. Sol Upfront payments are paid within 15 business days of approval on a rolling basis.
Note that your SREC eligibility begins at either your interconnection approval date or the 1st of the year in which your complete SREC application is filed, whichever occurred later. So if your project was completed this year, you will receive SRECs dating back to the day the utility granted you PTO. If your project was completed last year, you will receive credit dating back to January 1, 2023.
More Questions? Reach Out Anytime!
We’re here to help make selling your SRECs easy. Our dedicated SREC team is happy to answer questions and help in any way we can. Reach out to srec@ipsunsolar.com or give us a call any time at 866-484-7786. We love talking SRECs with you!
