Reading Time: 4 minutes If you’re considering installing solar in Washington D.C., the most important solar incentive to be aware of are solar renewable energy certificates (SRECs). D.C. is one of the few governments that offers this performance-based incentive to people generating solar electricity. Even better, the District’s program is the most lucrative one in the country: when you […]Reading Time: 4 minutes
If you’re considering installing solar in Washington D.C., the most important solar incentive to be aware of are solar renewable energy certificates (SRECs). D.C. is one of the few governments that offers this performance-based incentive to people generating solar electricity. Even better, the District’s program is the most lucrative one in the country: when you buy and install a solar panel system in D.C., you can earn thousands of dollars each year just from selling the certificates your system generates.
This article describes how the District’s SREC program works, explores current prices for SRECs, and discusses the future of the SREC program so that you can make a well-informed decision about going solar.
- D.C. has the most lucrative SREC program in the country
- The amount you can earn in SRECs depends on supply and demand in the market, as well as how much electricity your solar panel system generates
- Get free quotes from local D.C. installers on the EnergySage Marketplace to see how much you can earn from SRECs
How D.C.’s SREC program works
D.C. has a renewable portfolio standard (RPS) that requires its utilities to produce 100 percent of their electricity from renewable resources in 2032. Fortunately for those who want to install solar, the RPS also has a “solar carve-out,” which mandates that five 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. As an owner of a solar panel system, you generate one SREC for every megawatt-hour (MWh) of electricity your solar energy system produces. So, the average D.C. homeowner buying an eight-kilowatt (kW) system typically generates about 10 MWh of solar electricity per year, equal to 10 SRECs.
Utilities like Potomac Electric Power Company (PEPCO) 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 their SRECs to utilities through the local government’s SREC market.
In D.C. specifically, an SREC has a useful life of three years: this 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 in the D.C. SREC market.
DC SREC prices (current and projected)
The price of a single SREC isn’t fixed in Washington D.C. – it varies based on supply and demand within the market, and can change from day-to-day. For reference, in 2021, SRECs in D.C have sold for prices between $380 and $435.
So, what does this mean for you? Like we mentioned above, an average eight kW system will generate roughly 10,000 kilowatt-hours (kWh), or 10 MWhs of electricity a year. If you had a solar panel of this size in D.C. and sold your SRECs for $380 each, you’d earn an extra $3,800 a year – or an extra $19,000 in your first five years of solar power! This is a bonus towards the other incentives available (like the federal investment tax credit), and the savings you’ll see on your electric bill over 25+ years. Not too shabby, right?
10 SRECs x $380 = $3,800 in year one
50 SRECs x $380 = $19,000 over 5 years
Of course, the future price of SRECs in D.C. largely depends on market conditions. Post-COVID, the market has experienced an oversupply of SRECs, leading to slightly lower prices than in previous years. Despite this, D.C. remains the most advantageous SREC program in the country thanks to its ambitious renewable energy goals and high alternative compliance payments (i.e. penalty fees utilities have to pay if they don’t meet the goals mandated through the RPS).
And the odds of D.C. retaining this gold medal SREC status are pretty high: when the District updated its renewable portfolio standard to be 100 percent renewable energy by 2032, they also expanded the solar carevout, calling for 10 percent of electricity sales to come from solar technologies by 2041. As a result, demand for solar electricity–and consequently, SRECs–should remain strong.
Selling SRECs in D.C.
We talked a lot above about how much you can earn by selling your SRECs…but how do you sell them in the first place?
Similar to trading any other type of intangible commodity, most solar panel system owners sell SRECs through an intermediary, known as aggregators or brokers. Three of the most popular platforms for EnergySage customers selling SRECs are SRECTrade, Sol Systems, and Knollwood Energy.
With most SREC aggregators, you can have as little or as much control over the sale of your SRECs as you’d like. Some people sell their SRECs as soon as they’re able to, while others will hang on to them, hoping that they’ll increase in value during their useful life. Additionally, many aggregators or solar companies offer to pre-buy your future SRECs at a fixed price, allowing you the opportunity to lock in your savings. Before agreeing to sell the rights to your SRECs, it’s important to understand the advantages and disadvantages of this approach – we discuss in more detail throughout this article.
Compare solar options on EnergySage
On EnergySage, you can compare multiple options side-by-side from local D.C. installers that take into account the current incentives available – including SRECs! To start receiving free solar quotes, sign up on the EnergySage Marketplace today. Alternatively, if you want to start out your process with an estimate for what solar would cost you, try our Solar Calculator.