In six US states plus Washington DC, solar system owners earn Solar Renewable Energy Certificates (SRECs) for every megawatt-hour their system produces. These certificates are sold to utilities that need them for compliance with state Renewable Portfolio Standards — creating an income stream that adds significantly to the financial case for solar.
SREC markets are one of the most underexplained solar incentives. Many installers in SREC-active states leave money on the table by not explaining SREC revenue in proposals — or by modeling it inaccurately.
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SREC Revenue Can Be Substantial
In New Jersey, a 7 kW system producing 8,400 kWh/year earns about 8.4 SRECs annually. At $175/SREC, that’s $1,470/year in SREC income on top of net metering savings. Over a 15-year earning period, total SREC revenue exceeds $20,000 (undiscounted) — roughly equal to the system cost after the 30% ITC.
How SREC Markets Work
The Mechanics
- State RPS with solar carve-out: The state requires utilities to source a percentage of electricity from solar specifically (not just renewables in general)
- Solar carve-out creates demand: Utilities that don’t generate enough solar must buy SRECs from owners who do
- SREC generation: Solar system owners generate 1 SREC for every 1 MWh (1,000 kWh) of production, tracked through the state’s Generation Attribute Tracking System (GATS)
- SREC selling: Owners sell SRECs through brokers, spot markets, or utility purchase agreements
- Compliance: Utilities surrender SRECs to the state PUC to demonstrate solar RPS compliance
- Price driver: SREC prices rise when supply is tight (not enough solar installed) and fall when supply exceeds demand
SREC vs. REC
A REC (Renewable Energy Certificate) covers all renewable energy. An SREC (Solar REC) is specifically solar. States with solar carve-outs create separate SREC markets because solar (per kWh) is more expensive than wind or biomass — the solar carve-out ensures solar gets built even when generic RECs are cheap.
Active SREC Markets (2026)
New Jersey — SREC II
The largest residential SREC market in the US.
| Feature | Details |
|---|---|
| Program | SREC II (Successor Solar Incentive) |
| Earning period | 15 years |
| Current price range | $100–$230/SREC |
| Registration | NJ SRP through PSE&G |
| Market type | Tradeable spot market + utility fixed contracts |
| Market liquidity | High |
New Jersey’s solar carve-out (part of the state’s 35% RPS) creates consistent demand. SREC prices have been volatile historically — ranging from below $100 to over $350/SREC — but have stabilized in the $150–$230 range as the program matured.
Massachusetts — SMART Program
Massachusetts replaced its SREC program with the SMART (Solar Massachusetts Renewable Target) program. Technically not a tradeable SREC market — it’s a fixed $/kWh tariff paid directly by the utility for all solar generation. But functionally similar from the installer’s perspective.
| Feature | Details |
|---|---|
| Program | SMART (Solar Massachusetts Renewable Target) |
| Rate structure | Fixed $/kWh based on capacity block at reservation |
| Current rate range | $0.11–0.19/kWh |
| Earning period | 10 years |
| Payment method | Direct utility payment on monthly electric bill |
SMART is more predictable than a market-based SREC because the rate is fixed at reservation. Full Massachusetts SMART guide.
Illinois — Illinois Shines (Adjustable Block Program)
Illinois launched the Illinois Shines program (formerly the Adjustable Block Program) under the Future Energy Jobs Act:
| Feature | Details |
|---|---|
| Program | Illinois Shines / Adjustable Block Program (ABP) |
| Certificate type | Illinois Renewable Energy Credit (IREC) |
| Current price | $50–$100/SREC-equivalent |
| Earning period | 15 years (25 years for community solar) |
| Administrator | Illinois Power Agency |
| Markets | Residential and community solar |
Illinois Shines provides a 15-year contract at a fixed price, similar to Massachusetts SMART. The Illinois Power Agency sets block rates and opens new capacity blocks periodically.
Washington DC — The Most Valuable SREC Market
DC has the highest SREC prices in the US by far:
| Feature | Details |
|---|---|
| Current DC SREC price | $350–$450/SREC |
| Program driver | DC’s 10% solar carve-out by 2041 |
| Supply | Limited — DC is small, not much solar |
| Demand | High — utilities must meet stringent solar carve-out |
| Earning period | No limit (ongoing as long as market exists) |
A 5 kW DC rooftop system producing 5,500 kWh/year earns 5.5 SRECs × $400 = $2,200/year in SREC revenue — making DC solar among the most financially attractive in the country despite moderate irradiance.
Maryland
| Feature | Details |
|---|---|
| Current price | $60–$100/SREC |
| Solar carve-out | 14.5% by 2028 |
| Earning period | Ongoing (market-based) |
| Registration | PJM-GATS |
Pennsylvania
| Feature | Details |
|---|---|
| Current price | $30–$60/SREC |
| Solar carve-out | 0.5% by 2021 (small carve-out) |
| Prices | Volatile; low when carve-out is met |
Pennsylvania’s small solar carve-out means SREC prices are significantly lower than NJ, MA, or DC. SREC revenue is a secondary benefit in Pennsylvania rather than a primary financial driver.
Ohio
Ohio SREC prices are among the lowest in the US:
| Feature | Details |
|---|---|
| Current price | $3–$8/SREC |
| Solar carve-out | Eliminated in 2019 (HB 6) then partially restored |
| Market status | Very low value |
Ohio’s solar carve-out policy has been unstable. SREC prices are very low — Ohio SRECs add minimal financial value to solar installations. The primary Ohio solar incentives are the 30% federal ITC and net metering.
How to Sell SRECs
| Method | Pros | Cons |
|---|---|---|
| Spot market (SRECTrade, Flett Exchange) | Get current market price; flexible timing | Price varies; requires active management |
| Broker agreement | Broker handles logistics; may lock in floor price | Broker takes commission; may not capture price spikes |
| Utility fixed contract (e.g., NJ SRP) | Price certainty for contract period | May be below market if prices rise |
| Third-party aggregator | Handles all sales; may offer advances | Fee or discount applies |
For residential customers, broker agreements or utility fixed contracts are most common — they reduce the management burden while ensuring SRECs are sold consistently.
Include SREC Revenue in Your Solar Proposals
SurgePV calculates SREC revenue projections for NJ, MA, IL, MD, PA, and DC using current market rates — so customers see the full financial picture before they sign.
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Frequently Asked Questions
What is an SREC?
A Solar Renewable Energy Certificate representing 1 MWh of solar generation. States with solar carve-outs in their RPS require utilities to buy SRECs from solar owners, creating additional income beyond net metering savings. Active markets: NJ, MA, IL, OH, PA, MD, DC.
Which state has the highest SREC prices?
Washington DC, at $350–$450/SREC — the highest in the US because DC’s aggressive solar carve-out creates strong demand in a small geography with limited solar supply. New Jersey ($150–$230) has the largest liquid residential SREC market nationally.
How do I register for SREC programs?
Registration process varies by state. New Jersey: through NJ SRP/PSE&G. Massachusetts: through the SMART program at the serving utility. Illinois: through Illinois Power Agency’s ABP portal. Maryland/Pennsylvania/Ohio: through PJM-GATS. Register before or immediately after installation.
