The SREC or 'Solar Renewable Energy Certificate' program, came to light as a result of what is called an RPS. Ha! Another acronym...well an RPS which is 'Renewable Portfolio Standard' is a requirement on all electricity providers in some states to secure or make sure a certain portion of the electricity they serve to their customers actually originates from a Solar generator. "So...where was I? oh yes!"...the SREC program makes this happen by providing certificates for every Megawatt-hour of electricity produced.
http://www.srectrade.com/background.phpThe map on the left illustrates various states with an SREC market, those capable of selling to other SREC markets and those with no SREC market. "But wait a sec...!" "we are now talking SREC markets...???" "Yep!" SRECs can and are being traded nationally, this is how: 1 SREC is equivalent to a measure of 1,000 kilowatt-hours (kWh) of solar electricity, which is also equivalent to 1 megawatt-hours (MWh) of solar electricity. "Sounds big huh?" "kWh", "MWh"..."but what does all that mean?!" Lets put this into perspective; say you installed a 10 kw solar capacity system on your property today, that system will produce approximately 12 SRECs by the end of its first year at optimum performance. These SRECs are being traded separately from the energy produced and consumed by your solar system.
It becomes difficult to attribute a specific price to an SREC, and its actual monetary value is impacted by demand and supply just like any other market product. The demand on one hand lies greatly on a specific state's RPF. Please watch this video as Absolute Green Energy Corporation's President Mike Ortolano explains in detail.
If you are interested in learning more...please contact me or leave a comment below with your question(s).