One of the lesser-known benefits of owning a solar energy system is the ability to generate Solar Renewable Energy Credits (SRECs). SRECs may not be a household name, but they can drastically improve the financial returns of owning a solar system, which means putting more money in your pocket. They are a great addition to the electric savings and tax benefits you will gain with a solar energy investment.
If you’re new to the world of solar energy, you probably have a lot of questions about Solar Renewable Energy Credits (SRECs). What exactly are SRECs? How do they work? And perhaps most importantly, how much are they worth? Don’t worry; this blog post provides all the answers you need and more.
The owner of a solar panel system can receive 1 SREC for every 1,000 kilowatt-hours (kWh) or 1 megawatt-hour (MWh) of solar electricity produced by their panels. That credit can then be registered and sold - generating additional revenue for the system owner.
Note: SRECs are only available for homeowners and businesses that own a solar system. Therefore, you will not be able to receive them if your system is leased or under a Power Purchase Agreement (PPA).
While Renewable Portfolio Standard (RPS) legislation exists in 36 states, only a handful include a carve-out specifically for solar energy. Today, five states plus Washington, D.C., have an active SREC market. Each program comes with its own rules, which means the value of an SREC can vary widely depending on where your system is located.
One of the biggest differences between states is whether the market is open or closed. In closed markets, only solar systems located within the state qualify to generate credits. In open markets, out-of-state systems—often within the PJM power grid—can also participate. Open markets can provide opportunities for system owners in states without SREC programs, but because more credits are available, prices tend to be lower.
Here’s a list of the states that currently have an SREC market:
Since Paradise Energy serves customers throughout the Mid-Atlantic, let’s take a closer look at how SRECs work in the states where we operate: Delaware, Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia.
Delaware
Delaware runs a strong SREC program tied to its Renewable Portfolio Standard. Delaware is a closed market, so only systems located in the state are eligible to participate. This keeps demand focused squarely on supporting in-state solar projects.
Delaware SRECs have a three-year useful life. Credits must be used within that period, or they will expire.
Maryland
Maryland has one of the more ambitious solar carve-outs in the Mid-Atlantic, requiring 5.5% of the state’s electricity to come from solar by 2030. MD has a closed market, restricted to in-state systems only, ensuring the program directly benefits local solar development.
New York
New York does not currently operate a tradable SREC market. Any credits produced by systems that receive NY-Sun incentives are retired by NYSERDA and cannot be sold. As a result, New York systems cannot sell SRECs in-state or across state lines.
Ohio
Ohio’s program looks a bit different. Although the state’s renewable energy requirements are being phased out, solar owners can still generate SRECs. Ohio has an open market. Out-of-state systems located within the PJM grid can sell their credits into Ohio, but with lower demand, prices are typically less competitive than in neighboring states.
SRECs in Ohio have a five-year lifespan. Each credit must be used within that five-year window.
Pennsylvania
Pennsylvania operates one of the region’s more established SREC markets. But since 2017, Pennsylvania has been a closed market, which means only in-state systems are eligible to generate Pennsylvania SRECs. However, the Pennsylvania Tier 1 market is open for all eligible systems located in the PJM Grid area.
SRECs have a three-year lifespan in PA.
Virginia
Virginia established its own SREC market under the Virginia Clean Economy Act. The VA market is mostly closed, with carve-outs that prioritize in-state systems, including small-scale, community, and low-income projects. While some Virginia systems may still be able to sell into open markets like Ohio, cross-border options are much more limited than in the past.
Virginia SRECs are valid for five years from when they are created.
West Virginia
West Virginia does not have its own SREC market since the state does not enforce a Renewable Portfolio Standard or solar carve-out. However, because West Virginia is part of the PJM power region, some system owners may be able to register and sell their credits into neighboring open markets like Ohio. This provides a potential, though limited, path for West Virginia solar owners to benefit from SRECs.
The value of SRECs is influenced by several factors, including the market's supply and demand dynamics. The supply of SRECs is determined by the number of qualified producers, which refers to homeowners and businesses that own solar panel systems. If there is a high number of qualified producers, the supply of SRECs will increase, potentially driving down prices. On the other hand, if the number of qualified producers is limited, the supply of SRECs may be scarce, leading to higher prices.
The demand for SRECs is determined by the number of credits that utility companies need to purchase to meet their renewable energy production goals. Each state sets a specific target for the percentage of green energy that utility companies must fulfill through solar energy. If utility companies do not purchase enough SRECs to meet these targets, they are subject to fines known as Alternative Compliance Payments (ACPs).
The ACPs act as an incentive for utility companies to buy SRECs rather than paying fines. However, if the ACPs are set at a lower amount than the cost of an SREC, utility companies may choose to pay the fines instead, resulting in a decrease in demand and prices for SRECs.
To give you an idea of the potential financial benefits, let's consider a 10 kW residential system, which is the average size for a home. This system can generate approximately 12 SRECs per year. In states like New Jersey, where the prices of SRECs are high, this could mean an additional $2,484 in your pocket annually. However, in states with lower prices, the earnings from SRECs range between $48 and $700 per year.
For the most up-to-date prices of SRECs, we recommend visiting SRECtrade, where you can find comprehensive information on the current market rates. The chart below lists the prices as of September 2025. For the most up-to-date prices of SRECs, we recommend visiting SRECtrade, where you can find comprehensive information on the current market rates. The chart below lists the prices as of September 2025.
It's crucial to remember that the value of SRECs can vary over time due to shifts in supply and demand and policy changes.
To sell your SRECs, you must register your system with the Public Service Commission and submit the registration to the Generation Attribute Tracking System (GATS). Once GATS approves your registration, your system will start generating credits. Thankfully, in most cases, your installation company will handle the registration process for you.
Once your system is registered and begins generating credits, you will need to decide on the best approach to sell these credits. You have the option of using a broker who will handle the sale to utility companies, or you can let your installer manage the sale for you. Both choices will come with a fee, typically a percentage of the total sale amount.
Paradise Energy will manage SRECs for you, whether we installed your solar panels or you used another installation company. All are welcome.
At Paradise Energy, we gather all our customers' credits to sell directly to a broker, relieving our customers of the hassle and ensuring they get the best possible price for their credits.
Our SERC management service costs 6% of the sale amount for each credit, with a minimum charge of $4 per credit.
The frequency at which we sell SRECs we manage varies by state. In Ohio and Virginia, we conduct sales once annually, while in Pennsylvania, Maryland, and New Jersey, we have the opportunity to sell them twice a year.
We provide this service as an additional offering for all the systems we install, as well as for those who have a system installed by another provider.
Please be aware that income generated from the sale of SRECs is considered taxable income.