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Solar Renewable Energy Credits

sun-and-flowers-(2).jpgDovetail Solar and Wind can assist you to receive cash payments for the Solar Renewable Energy Credits (SRECs) produced by your solar electric system!

As an owner of a solar energy system, you not only generate valuable clean, renewable electricity, you also produce solar renewable energy credits (SRECs) that large utility companies are looking to buy. However, it is difficult for you to go straight to the energy companies because you typically just don’t produce enough to make the transaction worthwhile. It is also very cumbersome, and tedious to register and sell your SRECs yourself. This is where Dovetail can help. Dovetail has a partnership with Sol Systems LLC  (www.solsystemscompany.com) to purchase the SRECs produced by your solar array. Sol Systems is one of the largest and proven firms in this market niche, They offer long-term SREC contracts in 14 states in the Northeast, Mid-Atlantic and Midwest states.  Dovetail works with them to provide this valuable service for our customers in Ohio and surrounding states. See the Sol Systems website www.solsystemscompany.com, if you are located in a state outside the Dovetail service area.

Note that after you sell your SRECs, you will continue to have full use and value for the electric power that your solar system produces, including Net Metering. You will still buy less power from your utility company just as you have been doing. That part does not change. However, we will provide you an agreement that assigns the environmental attributes of your system (the SRECs) to Sol Systems so they can aggregate and sell them in the marketplace.  They provide very competitive industry rates, particularly because their rates are locked in for three, five or 10 years. The market price for SRECs generally declines over time as more solar systems are installed across the nation.

What exactly are Solar Renewable Energy Credits (SRECs)?

SRECs are one of the environmental attributes associated with the production of one megawatt-hour (MWh) of electricity generated from a qualified solar energy generating resource. That's 1,000 kilowatt hours. Your solar system inverter and the private meter that Dovetail installs records these kilowatt hours (kWh). An Ohio based solar PV system typically produces 1,000 to 1,200 kWh per year for each 1,000 DC watts of solar system size. SRECs are different from other, generic renewable energy credits (RECs), in that they are only produced by a solar system, whereas generic RECs are produced by any renewable source, including wind, solar, biomass, hydropower, etc. SRECs are, therefore, less common and more valuable than standard RECs.

Ohio Senate Bill 221 established an alternative energy portfolio standard (AEPS). The law mandates that by 2025, at least 12.5 percent of all electricity sold, must be generated by renewable sources such as wind, solar, hydropower, geothermal, or biomass. Ohio SB221 also includes a solar carve out or mandate that requires at least 0.5 percent of all electricity used by 2025 must come from solar generation. One way Ohio utilities can comply with the law is to purchase SRECs. This makes your Ohio generated SRECs valuable. Other states, such as Pennsylvania and Maryland have similar renewable portfolio standard laws.

Please note that the market price for Ohio SRECs has plummeted since the passage of SB310 in June 2014. This partisan legislation has frozen Ohio's AEPS for 2 years, as well as eliminated the requirement for 50% of renewable  power to be Ohio sited. We encourage you to communicate  to your state legislators and Gov. Kasich about the negative impacts this ill-advised legislation is having on you and other Ohio residents and businesses.

How much money could I receive?

Sol Systems offers three options for sale of your SRECs: a) Annuity production-based payments extending over five or ten years; or b) an Up-Front payment, or c) a quarterly Brokerage of your recent SREC production. Each option is described below. 

Annuity-based Payments
Sol Annuity provides a fixed, quarterly payment for each full SREC produced. This option removes SREC price volatility, and provides customers with a steady income stream over a 3, 5 or 10 year SREC contract term.

As spot market prices change (and decrease) over time, Sol Annuity provides customers consistent, guaranteed income. Customers may match this cash flow against a solar financing payment, such as a loan or lease payment.

There are no fees for Sol Annuity. For example, if a customer locks into a Sol Annuity 3-year SREC contract for $30 per SREC, they will receive $30 for each full SREC produced each quarter for 3 years. Please note that SREC prices for new contracts are subject to change on the 1st business day of each month.

You will be paid quarterly for each MegaWattHour (MWh) your system produces during that time.   For April 2015, the amount offered for Ohio generated SRECs is  $30.00 per SREC for a three year contract$25.00 per SREC for a five year contract and $20.00 per SREC for a ten year contract. That’s equal to $0.030, $0.025 and $0.020 per kWh during those time periods. Therefore, every time your solar system produces 1,000 kWh you will have earned $30.00, $25.00 or $20.00. For example, a typical 6,000 watt residential solar system can earn approximately $210.00 in SRECs sales per year with a three year contract. 

In order to receive payments, your system must be registered in the state(s) where the SRECs will be sold as well as on GATS. We make this complicated transaction simple and easy! Dovetail will assist you in registering your system with Sol Systems. This will also include the contract with Sol Systems that locks in the amount they will pay you per SREC for 3, 5 or 10 years, and includes your assignment of your SRECs to Sol Systems for the contract period. They will reimburse you quarterly for the SRECs your system produced in the previous quarter. If you do not produce a full SREC, any fraction of a MWh produced will rollover to the next quarter. Sol Systems can either mail you a check each quarter, or automatically deposit your SREC payments into your checking or savings account.

Up-Front Payment
With this option, Sol Systems will pay you up-front for the expected SRECs your system will produce over the next ten years. For an Ohio solar PV system, you will receive a single payment equal to $xxx for every 1,000 watts of system capacity. In return, you agree to assign all SRECs produced by your system over the next 10 years to Sol Systems. You also agree to maintain the system so that it continues to operate over that time period. NO Up-Front option currently being offered for Ohio.

Examples of the amount you would receive are:
  • a 6,000 watt residential system owner would receive $600 ($100 x 6.000)
  • a 50.3 kW commercial system owner would receive $5,030 ($100 x 50.3)
You will receive your payment within approximately 30 to 45 days after your system is commissioned and operational.

This often is an excellent option, if you are borrowing funds to purchase your solar system and wish to make a lump sum payment on the loan principal and/or pay down the loan early in the loan term and reduce interest fees. Simply call us for the up-front SREC payment rate for other states in our service area.

Sol Brokerage - A Variable Market-Based SREC Payment
Sol Brokerage allows customers to take advantage of high solar renewable energy credit (SREC) spot market prices without any effort or market knowledge required. They make it easy by:

  • Monitoring all solar renewable energy credit trading platforms and legislative changes
  • Managing customers’ meter readings to track production
  • Providing quarterly payments at the highest SREC prices

Sol Systems sells customers’ SRECs through SREC purchase agreements with utilities and energy suppliers. Sol Systems charges Sol Brokerage customers the greater of 5% of the SREC clearing price or $10 per SREC sold. If they are unable to find a buyer for all of our customers’ SRECs at an attractive price, they will hold these SRECs until the next quarterly cycle, They will attempt to sell older SRECs first. Sol Brokerage contracts are available for all system sizes. As of April 2015, the price for OH SRECs is $44.00.  IN, KY, MI, and WV SRECs are $50.00 each. PA SRECs are $51.00 each.

How do I get started?

If you have purchased or are planning to purchase your system from Dovetail, and you would like to sign up to sell your SRECs just contact us. (Sorry we do not generally handle SRECs for non-Dovetail systems, unless you are planning a system expansion with us, or your previous installer does not offer an SREC program).

Dovetail is delighted to offer this opportunity to our current and future customers to make your solar investment an even more valuable asset. You can not only save money on your electric utility bill, you can also receive significant additional cash from your investment. It is practically free money, and we highly recommend participation. We just need to fill out the paperwork with you, and you can start getting paid for the sunlight shining on your system!

Note that SREC payments are generally considered taxable income for individuals and businesses once the cost of your initial investment has been recovered. 
 

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