To produce SRECs, a solar system must first be certified by state regulatory agencies, usually public service commissions (PSCs) or public utility commissions (PUCs), and then registered with the registry authorized by the state to create and track SRECs.
The Solar Alternative Compliance Payment (SACP) is the fee that energy suppliers must pay if they fail to secure SRECs as required by their state's RPS.
Homeowners and businesses can then utilize the sale of the SRECs they generate to help finance their solar systems.
SRECs can be sold in a variety of ways, such as on the spot market, at auction, or by negotiating long-term contracts.
Massachusetts' SREC market recently closed new applications to the program to transition to a different type of incentive.
Ohio is no longer included in the list because the state passed legislation to eliminate their RPS altogether in 2026.
SREC prices are ultimately determined by market forces within the parameters set forth by the state.
Over time, SREC markets are designed to find the equilibrium price that encourages enough installation to meet the growing demand set forth by the RPS.
[5] In addition to the strength of spot market demand in states experiencing supply shortages, the general lack of availability of viable long-term contracts and the heavy discounts applied to these contracts have left some system owners and project developers seeking ways to finance solar through spot transactions.
Some SREC aggregators have managed to negotiate 3- to 10-year agreements and can offer similar length contracts to their residential and commercial customers.