What the heck is an SREC?!

What the heck is an SREC?The U.S. solar market is looking bright according to the 2011 U.S. Solar Market Insight Report.[1] The report found that growth in U.S. solar capacity more than doubled from 2010 to 2011, with New Jersey accounting for 17% of installations in 2011 (second only to California!).   One reason for New Jersey’s large solar industry is the state’s robust market for Solar Renewable Energy Credits (SRECs).

So, what exactly is an SREC?  On the most basic level, an SREC is a record of the amount of solar energy produced by a particular solar photovoltaic (PV) system. One Solar Renewable Energy Certificate, or SREC, is “earned” for each megawatt of solar electricity that is produced.  These certificates are credited to the system’s owner through an online account and similar to the stock market, SRECs can be bought and sold.

For example, let’s say a homeowner installs a solar energy system on their roof.  Once the system is active and begins to produce electricity, it is assigned an online SREC account.  For each 1,000 kilowatt-hours of electricity that the system produces, one SREC is earned and credited to the owner’s account.  Given that SRECs are traded on an open market, their value fluctuates depending on supply and demand.  Recently, SRECs have been valued between $100-$200[R1] .

In addition to recording solar electricity production, SRECs act as an important financial incentive for solar technology development.  Because solar electricity is more expensive than traditional sources of electricity (e.g., coal, nuclear, natural gas), incentives are needed to encourage the development and production of solar technology.

In New Jersey, the market for SRECs is controlled by New Jersey’s Clean Energy Program.  Each year, the NJ Clean Energy Program establishes a Renewable Portfolio Standard, or RPS, that requires electricity suppliers in the state to obtain a minimum percentage of their electricity supply from solar energy.  Because many energy companies do not produce their own solar energy, they often purchase SRECs from other companies or homeowners to fulfill their requirement.  To summarize, by selling SRECs to electricity suppliers, owners of solar PV systems can recover a significant portion of the money they spend on installing solar PV systems.

[1] SEIA/GTM Research. 2012 U.S. Solar Market Insight Report: “2011 Year-in-Review.” http://www.seia.org/.

 [R1]Still true

New Bill to Accelerate New Jersey’s Solar Goals

By Fred Profeta, President of EcoMatters

This week the New Jersey legislature introduced a new bill to stabilize the New Jersey solar market.  On May 14, 2012, Senate bill S-1925 was proposed by Senator Bob Smith (D-Piscataway), Chairman of the Senate Environment Committee and Senate President Stephen Sweeney (D-West Deptford).

The proposed legislation centers on the SREC market, which is oversupplied in New Jersey. The term SREC stands for Solar Renewable Energy Credit and is a tradable credit that represents all the clean energy benefits of electricity generated from a solar electric system. Each time a solar electric system generates 1000kWh (1MWh) of electricity, an SREC is issued which can then be sold or traded separately from the power.

SRECs are purchased by electricity suppliers who need to meet a Renewable Portfolio Standard (RPS), and SRECs can be bought by renewable energy marketers, private businesses and individuals interested in supporting the development of solar energy.  An RPS requires a state and its electricity suppliers to produce a certain percentage of their electricity from renewable resources by a certain year.   For example, New Jersey’s requires the state to produce 22.5 percent of its electricity from renewable resources by 2020.  The new legislation proposes to accelerate the RPS starting in Energy Year 2014, so it will accelerate the amount of SRECs that the power companies are required to purchase.

If an electricity provider does not meet this percentage, it purchases SRECs to correct their deficit rather than incurring a large fine.  SRECs are therefore sold for prices determined by the market for Renewable Portfolio Standard compliance. The fewer solar installations there are means higher prices for available SRECs.  This creates an incentive for future solar installations.

In New Jersey, under the current Renewable Portfolio Standard (RPS), more solar has been installed than is necessary to meet the state’s RPS goals for the next several years.  This is one reason why the new legislation is needed.

The bill proposes a number of additional positive changes to improve the New Jersey solar market.  Review Senate bill s-1925 for complete information and check back on the EcoMatters site and I will keep you updated on how the bill progresses and what you can do to support it.

Interested in Learning More about Residential Solar?

EcoMatters and our partner, Advanced Performance Solar, are here to provide information for you!

If you’re thinking about going solar, you’ll want to read 5 Steps to Solar for Your Home

If you’d like to host a residential solar screening event, you’ll want to read our document on Hosting An Event

If you’d like to attend a residential solar screening event, visit our Upcoming Events page to see if there’s one scheduled in your area!

Use this form to confirm your solar screening event (after speaking with a member of the EcoMatters team.)

Download a solar screening event checklist to help you put together a successful event — and read our 10 Tips for promoting your event!

And for more information, visit our page on Residential Solar Installations!

Call us at 201-639-4ECO for more information!

Save money – save the environment!

Glad to have Gray Russell as a member of our team!

 Gray Russell, Montclair Township’s Environmental Affairs Coordinator and a member of the EcoMatters team, brought a big bag of trash to Park Street Academy, a local preschool recently. He visited to teach the students about the benefits of recycling, but the teachers, myself included, learned a thing or two.

Read the whole article here!

Spring Cleaning?

Think green when tackling your spring cleaning this year — consider opting for recycled papers and green cleaning supplies. Stay away from cleaners containing phosphates; the toxins are extremely harmful to the environment, as well as cleaners containing bleach or chlorine, which tend to be harmful for similar reasons. Vegetable-based cleaners have become increasingly popular and available broadly in most stores. You can also use vinegar as a completely natural way to clean almost anything.  Happy cleaning!

Introducing EcoMatters!

We are excited to be introducing EcoMatters to communities in New Jersey and beyond.  While the Principals and Team Members of EcoMatters are no strangers to municipal leaders, our collaboration is new — and designed to serve our clients in exceptional ways!  What do we do?

We Listen

During our initial consultation, we find out what your community has done, where you want to go, and establish a baseline so we know where we’re beginning.

Develop a Strategy

Based on your community’s goals and our expertise, our team designs a plan which may include savings on energy use, waste reduction, urban design, urban nature, transportation, environmental health, water use and more. Since each client’s situation is different, our services can be tailored to fit each client’s unique requirements.

Implement the Plan

We believe the value of any sustainability strategy can only be measured by its capacity to be implemented, and that outreach, education, and getting people involved in sustainability efforts is the best way to ensure continual progress in conserving energy and reducing our impact on the environment.  We’ve done it, so we know how to organize and motivate,  using a combination of the following strategies top spur participation in our clients’ sustainability initiatives:

  • Education
  • Training
  • Social media
  • Friendly Competition
  • Incentives

Monitor Progress

Once a sustainable action plan is set in place, we help you set in place a system to measure the performance of strategic initiatives.  This is critical to ensure the integrity of the capital investment and to encourage continuous improvement.

Interested?  Contact us to learn more!