Pennsylvania SRECs (Alternative Energy Credits or 'AECs')
Pennsylvania SRECS (Alternative Energy Credits or ‘AECs’)
Homeowners with solar panels in Pennsylvania are eligible to earn money by selling solar alternative energy credits (AECs). In other states, these are called solar renewable energy credits (SRECs); check out general information on SRECS in this video. Basically, an AEC or SREC is a certificate that someone producing solar electricity can sell to someone else as proof of environmental benefits, like reduced pollution and emissions. After your home receives the right certifications, you can earn an AEC each time you produce a megawatt-hour of solar energy.
Who buys AECs?
Pennsylvania’s Renewable Portfolio Standard (RPS) requires utilities serving the state to buy a certain percentage of renewable energy every year, and part of that has to be from solar power. This demand will almost certainly grow because the market is new and the two largest utilities in Pennsylvania– PPL and PECO– were initially exempt from the requirement to buy renewables. PPL has to start buying renewable energy this year, and PECO will have to start next year. The percentage of solar power that’s required is relatively small, but the state government is currently considering a bill to increase that. Right now, the solar requirement is 0.5% of all electricity by 2020, but the new bill would take that up to 3%. Pennsylvania residents can also sell AECs to the markets in DC and Ohio.
Anyone producing solar power in Pennsylvania can apply to be certified. Solar power producers in the PJM region are also currently eligible to sell SRECs in Pennsylvania (note that this may change if the bill under consideration in the PA House of Representatives passes; it could be limited to people within PA borders). That includes homeowners in Ohio, Virginia, Delaware, DC, and more. If you live in Pennsylvania, you’ll want to register your system as soon as possible, because you only start earning credit after the date of application. Solar producers in other eligible states don’t have to reapply for certification if they’ve already applied in their home state. AECs can be generated for the life of the system, and each credit you earn can be sold anytime in the next three years (if you earn a credit in 2010, for example, it can be sold in 2010, 2011, or 2012).
Where else can PA homeowners sell AECs?
Pennsylvania solar producers can also sell renewable energy credits in Ohio and DC. Right now, the prices may be better in those markets. You can cross-list your credits in both locations, as well as in Pennsylvania.
How much are SRECs/AECs worth?
The price varies based on the market. Pennsylvania has a unique alternative compliance program (ACP); if utilities don’t buy as many credits as they’re required to, they have to pay twice the average trading price of credits in the previous year as a fine. This is different from other states, where the fines are set for a specific amount, helping set price certainty. This chart shows average prices for SRECs at auction.
How do I get started?
If you already have solar panels, you can register with the state Alternative Energy Portfolio Standard Program. If you don’t yet have a solar system for your house, sign up with 1BOG to get the best deal possible (our service is free!).
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