Renewable Energy Certificates (RECs), or as they are sometimes called SREC’s (Solar Renewable Energy Credits) are non-tangible energy commodities that account for 1 megawatt-hour (MWh) of electricity generated from an eligible renewable energy resource. Solar energy is credited with one REC for every 1,000 kWh or 1 MWh of electricity it produces. For example, an average residential customer consumes 1,000-1,500 kWh in a month.
Governing agencies track the SREC production and the SREC’s are paid directly to the customer (owner of the PV system). The green energy is then fed into the electrical grid (by mandate). The owner of the system is then paid the designated dollar amount for each SREC based on their market and area. These programs typically have a contract for payment of renewable energy that can vary from 5 to 15 years. Over the term, your SREC’s, or Green Tags as they are sometimes called, can be a great financial benefit.
SREC Programs for solar vary from state to state in the Midwest. Ohio has had a program for years, but the best program is currently in Illinois. Variables include length of contract as well as dollar amount paid per REC (1,000 KWh produced). In many cases the REC payment can pay for a substantial portion of the solar installation over the term of the contract. This incentive coupled with the tax credit and depreciation that are still available often make for a very speedy return on investment. At Harvest Energy Solutions we guide our customers through the entire process from start to finish to ensure these incentives are maximized for each installation.