subject: Solar Renewable Energy Credits [print this page] Beginning January 2010, The Massachusetts Department of Energy Resources (DOER) has recognized and approved a legal Solar Renewable Energy Credits market in Massachusetts. The state seeks to implement and put forth a system that ensures a demand and requirement for solar renewable energy in Massachusetts. SREC trade currently conducts auctions for SRECs in Massachusetts on a monthly basis. The functioning of the SREC programs explains the benefits of solar renewable energy in Massachusetts.
Massachusetts, as a state has three main characteristics that makes it a suitable market for SREC trade and make it effective. It sets out a specific RPS solar carve-out that aids in stimulating demand and values solar power higher than all other renewable sources. It has set a reference point for solar in the form of a percentage of entire electricity sold or as SRECs produced in a year or a fixed capacity target in megawatts (MW) or. Secondly, it allows the generating facility to directly own and trade the SRECs. There are states where the utility companies own all the SRECs. In such cases, the SRECs cannot be divided and sold individually. The final important aspect is the state has put in place a heavy non-compliance penalty of SREC trade regulations, known as SACP - Solar Alternative Compliance Payment. This is what pushes the value of SRECs higher than all other RECs. All these features make solar renewable energy in Massachusetts a viable and profitable proposition.
The SRECs are generated in such a way that for every megawatt-hour of solar electricity produced, a certain number of SRECs are produced. A solar renewable energy system in Massachusetts that has 10kW solar capacity can generate approximately 12 SRECs/ year. The SREC as such is traded separately and denotes the "solar" impact on the electricity generated. As in any market, the price of the SREC is calculated by the economic forces of demand and supply.
Small homeowners who generate excess SRECs than the required number by the RPS standard can easily sell them to electricity suppliers or larger industries that need them to fulfill their solar RPS needs. The use of solar renewable energy in Massachusetts helps not only in lowering electricity costs, but also paves a way to bring in revenue by selling SRECs in the open market. The trading in SRECs is a step towards promoting the growth of distributing excess solar power so that it reduces the time taken to achieve a return on investment used for the installation of a PV system that enable the use of renewable solar energy.
The installation of solar system must be indicated to the state which will then certify the system to be approved of selling SRECs. The registration with the state will put in a place a tracking system which will issue the SRECs depending on the solar electricity generated by the system. One SREC is made for every 1000kWh of solar power created. Typically, a 10kW system can give 1SREC every month and the decision rests with the owner whether to retain it or sell it immediately.
Thus, the Solar Renewable Energy MA has proven to be a cost effective investment option with minimal risks and a guarantee of effective return on investment to all people.
