What Is a Solar Renewable Energy Credit (SREC) and How Do I Earn One?

If you own solar panels in Maryland, Pennsylvania, Delaware, Washington D.C., or a handful of other states, your system may be generating income you have not claimed yet. Solar Renewable Energy Credits, or SRECs, are tradable certificates that let you earn money for the clean electricity your panels produce, on top of your utility bill savings and federal tax credit.

This article explains what SRECs are, how your system earns them, which states have active markets, what they are worth right now, and how to start selling them. It also covers what happens with leases, how to stack SRECs with other incentives, and common mistakes that cost homeowners money.

What Is a Solar Renewable Energy Credit (SREC)?

An SREC is a tradable certificate that represents 1,000 kilowatt-hours (kWh), or one megawatt-hour (MWh), of electricity produced by a certified solar system. When your panels generate that amount of clean electricity, your system earns one credit automatically. You then sell that credit to utility companies through a regulated market, separate from the electricity itself.

Your solar panels produce two things at once. The first is the actual electricity that powers your home or flows back to the grid. The second is proof that the electricity came from a clean solar source. The SREC captures and monetizes that second product.

Utilities in states with Renewable Portfolio Standards are required by law to source a specific percentage of their electricity from renewable energy. Rather than build their own solar farms, many utilities meet this requirement by purchasing SRECs from homeowners. If a utility fails to buy enough SRECs, it pays a fine called the Solar Alternative Compliance Payment, or SACP. That penalty is what keeps utilities actively buying credits on the market.

SRECs vs. RECs: What Is the Difference?

A REC, or Renewable Energy Certificate, represents one MWh of electricity from any renewable source, including wind, hydro, and biomass. An SREC is solar-specific. States with a solar carve-out in their RPS law require utilities to purchase a set amount of solar-sourced energy separately from other renewables. That carve-out creates the dedicated SREC market that makes your credits worth selling.

Not every state with an RPS has a solar carve-out. The carve-out is what drives SREC values above general REC prices, which is why D.C. and Maryland SRECs are worth far more than credits in states without one.

How Does a Solar System Earn SRECs?

Your system earns one SREC for every 1,000 kWh it produces. The process is automatic once you register. A tracking registry called PJM-GATS, which stands for the PJM Generation Attribute Tracking System, records your production data and issues credits monthly. You do not manually count or submit anything. Credits appear in your account on the last business day of each month for the prior month’s generation.

According to Flett Exchange, GATS issues credits one month after generation. Electricity your panels produce in March, for example, becomes SRECs in your account by the end of April. This one-month lag is standard across all Mid-Atlantic markets.

How Many SRECs Will Your System Produce?

The number depends on your system size and location. From solar industry production data:

• A typical residential system produces 7 to 9 SRECs per year
• A 10 kW system generates approximately 10 to 12 SRECs annually
• A 5 kW system generates roughly 5 to 6 SRECs per year

A quick starting estimate: multiply your system size in kilowatts by 1.2. An 8 kW system would produce about 9.6 SRECs in a year. Your actual production depends on roof orientation, shading, local weather, and panel efficiency.

What Does the Registration Process Look Like?

Your installer may handle GATS registration on your behalf, or they may refer you to an SREC aggregator to complete it. Either way, your system must be certified and registered before credits can be issued. The full step-by-step process is covered later in this article.

Which States Have Active SREC Markets?

As of late 2025, states where residential solar owners can earn and sell SRECs include Delaware, Washington D.C., Illinois, Maryland, Massachusetts, New Jersey, Ohio, and Pennsylvania. Virginia also has a mandatory RPS under the Virginia Clean Economy Act with an active SREC program. Some areas of Indiana, Kentucky, Michigan, and West Virginia can participate in Ohio’s SREC market depending on utility rules and registry eligibility.

According to Aurora Solar, which states are accepting new applications and at what prices changes frequently. Always confirm your state’s current status with your installer or a licensed SREC aggregator before assuming you qualify.

Maryland: A Strong Market With a Time-Limited Opportunity

Maryland homeowners have a particularly strong SREC opportunity right now. In May 2024, Governor Wes Moore signed Senate Bill 783, the Brighter Tomorrow Act. That law created a new category called Certified SRECs, worth 1.5 times the value of a standard SREC.

To qualify, your system must be installed in Maryland after July 1, 2024, and before January 1, 2028. As of 2025, Certified SRECs are trading around $74.50 per credit, compared to about $50 for a standard Maryland SREC. For a 10 kW system producing 10 credits per year, that is roughly $745 annually in SREC income alone.

The window for this enhanced value closes January 1, 2028. Homeowners who install before that date lock in the Certified SREC designation for the life of the program.

How Much Can You Earn From SRECs?

SREC earnings vary widely based on your state, system size, and when you sell. In strong markets, a typical residential system can generate $500 to $800 or more per year in SREC income. In weaker markets like Ohio, the same system might earn under $30. Your state is the single biggest factor.

SREC prices fluctuate based on supply and demand. When more solar is installed in a state, supply increases and prices can fall. When utilities fall short of their RPS targets, demand rises and prices go up. The SACP, the fine utilities pay for non-compliance, acts as a price ceiling. Utilities will not pay more for SRECs than it costs to pay the fine.

Real Income Example for a Maryland Homeowner

Say you install an 8 kW system in Maryland after July 1, 2024. Here is what the numbers look like in year one:

• System produces approximately 9.6 SRECs
• Certified SREC price: $74.50 each (2025 data, Flett Exchange)
• Annual SREC income: approximately $715

That income is separate from your utility bill savings and the 30% federal solar tax credit. SRECs do not reduce your ITC eligibility. They are an independent income stream that runs alongside your other solar benefits.

Why SREC Prices Differ So Much by State

D.C. had prices around $415 per credit in fall 2025. Ohio was under $3. The gap comes from three factors:

• The aggressiveness of the state’s RPS solar carve-out target
• The geographic size and available solar capacity in the state
• The SACP fine level that sets the effective price ceiling

D.C. has very limited land for large-scale solar installations and strict clean energy mandates, which keeps supply tight and prices high. Ohio has lower RPS targets and more solar on the grid relative to demand, which pushes prices down.

How to Register Your Solar System for SRECs

To earn SRECs, your solar system must be certified with a state regulatory agency and registered with the appropriate tracking registry, PJM-GATS for most Mid-Atlantic homeowners. Registration does not happen automatically at installation. You or your installer must complete it before any credits can be issued.

Here is the step-by-step process for most homeowners in Maryland, Pennsylvania, Delaware, and Virginia:

1. Install an owned solar system. Only owned systems, whether purchased outright or financed with a loan, qualify for SRECs. Leased systems and PPAs typically do not.
2. Confirm whether your installer handles registration or choose an aggregator. Some solar installation companies register your system with GATS as part of their service. Others do not. Ask before installation.
3. Apply for state certification. Your system must be certified by the relevant state agency, such as the Maryland Public Service Commission or the Pennsylvania Public Utility Commission. Aggregators like Xpansiv (formerly SRECTrade) or Sol Systems can manage this on your behalf.
4. Register with PJM-GATS. Once certified, your system is registered in GATS so the registry can track your production and issue monthly SRECs. Credits are issued on the last business day of each month for the prior month’s generation.
5. Set up an account with an SREC aggregator or broker. This is where you receive and sell your credits.
6. Begin receiving and selling credits. Once registered, SRECs appear in your account automatically. You choose how and when to sell.

What If You Did Not Register at Installation?

You can still register after the fact. Some states allow you to claim credits retroactively, though prices for older vintage SRECs are typically lower than current-year credits. In most markets, you can sell credits up to three years old, but the value diminishes with age. If you have an owned system and have not registered yet, contact an aggregator to find out what you may have earned.

Three Ways to Sell Your SRECs

Most homeowners sell SRECs through an aggregator or broker rather than dealing with utilities directly. Utilities prefer to buy in bulk from fewer sellers, which makes direct homeowner sales difficult. You have three main options: sell on the spot market, lock in a fixed-term contract, or take an upfront lump-sum payment. Each carries different risk and reward tradeoffs.

Solar United Neighbors, a nonprofit solar advocacy organization, outlines these three approaches in detail.

Choosing an SREC Aggregator or Broker

Several reputable platforms handle SREC registration, trading, and payment for homeowners:

• Xpansiv (formerly SRECTrade): One of the largest platforms in the country, managing over 2,000 MW of clean energy assets for more than 125,000 customers. Credits appear in your account automatically and the platform handles sales.
• Sol Systems: Based in Washington D.C. and well suited for Mid-Atlantic homeowners in Maryland, D.C., and Virginia. Offers automated brokerage and multiple contract structures.
• Flett Exchange: A smaller, more hands-on platform popular with D.C. and Maryland homeowners. Offers a 3% brokerage fee or a $2.50 self-directed trading fee per transaction.
• Carbon Solutions Group: Serves Virginia, Maryland, New Jersey, Pennsylvania, Ohio, and other states.

Once registered with an aggregator, the process is largely passive. Credits are sold automatically and payments are deposited on a monthly or quarterly basis, depending on the platform and your state’s program.

How SRECs Work With Your Other Solar Incentives

SRECs are a separate income stream from your other solar benefits. Earning and selling SRECs does not affect your federal solar tax credit, your net metering credits, or any state rebates you qualify for. You can stack all of them.

Here is how the four main financial benefits work together for an eligible homeowner:

• Federal Solar Tax Credit (ITC): A credit worth 30% of your total system cost, applied to your federal income taxes in the year your system is installed. SREC sales do not reduce this amount.
• Net Metering: When your panels produce more electricity than you use, the excess flows to the grid and your utility credits your account. Net metering applies to the actual electricity your system generates.
• SRECs: Separate from net metering. You earn SRECs for solar production whether that electricity is used in your home or sent to the grid. The two run in parallel.
• State and utility rebates: Programs like Maryland’s Clean Energy Grant or grants from Delaware utilities such as Delmarva Power are one-time or application-based incentives. SREC income does not affect eligibility for most of these.

One Important Tax Note

SREC income is generally considered taxable. The IRS may treat it as self-employment or business income depending on your situation. If you sell SRECs regularly, you may owe quarterly estimated taxes. Consult a tax professional familiar with renewable energy income before filing. SREC rules and tax treatment vary by state and situation.

Do You Get SRECs If You Lease Your Solar Panels?

No. If you lease your solar panels or sign a power purchase agreement (PPA), the leasing company, not you, typically owns the SRECs your system generates. SREC ownership follows equipment ownership. The leasing company owns the panels, so it owns the credits.

This is one of the most common misunderstandings in residential solar. Leasing companies retain SREC rights as outlined in the contract, according to guidance published by Palmetto Solar. Those companies use SREC revenue to offset their costs and price their lease agreements.

Before assuming you qualify for SRECs, confirm which of these applies to you:

• Purchased your system outright
• Financed your system with a solar loan (you own the system and its SRECs)
• Leased the system or signed a PPA (the leasing company likely owns the SRECs)

If you are unsure, review your original solar contract and look for language about SREC ownership, renewable energy certificates, or green attributes. If SRECs are not mentioned, call your installer or the leasing company directly.

Common SREC Mistakes Homeowners Make

Even homeowners who qualify for SRECs often leave money behind. These are the most frequent errors and how to avoid them:

• Not registering at installation. SRECs do not start accruing until your system is registered with GATS and certified with your state. If you skip this step, you miss credits from the day your system turned on. Ask your installer whether registration is included in their service before signing a contract.
• Waiting too long to sell older credits. SRECs carry a vintage year, and older credits sell for less. In most markets, you have up to three years to sell a credit, but prices decline as credits age. Sell current-year credits at current prices whenever possible.
• Choosing a lump-sum sale without comparing options. Upfront lump-sum payments offer certainty but typically pay less over a system’s lifetime. If your state has a strong SREC market and stable prices, a spot market or fixed-term contract usually earns more.
• Assuming your state’s program will not change. New Jersey and Massachusetts both had traditional open SREC markets that transitioned to fixed-rate programs. Maryland introduced the Certified SREC designation in 2024. Programs change. Always confirm current rules with your installer or aggregator before making long-term decisions.
• Missing Maryland’s Certified SREC window. For Maryland homeowners, the Brighter Tomorrow Act window closes January 1, 2028. Systems installed before that date qualify for Certified SRECs worth 50% more than standard credits. Waiting past that date means losing access to the enhanced value.

What to Do Next If You Live in an SREC State

If you live in Maryland, Delaware, Pennsylvania, Washington D.C., or Virginia, SRECs are a real and measurable part of the financial picture for owning solar. In Maryland, a qualified 10 kW system could earn $700 or more per year at 2025 Certified SREC prices. In D.C., with per-credit values around $415, even a smaller system generates meaningful returns on top of utility bill savings.

SRECs work best when you own your system and register it from day one. Prices fluctuate, programs change, and market conditions vary by state. In a strong market, SRECs can shorten your payback period by years, and in Maryland that window for Certified SREC pricing closes in early 2028.

The team at Solar Energy World installs residential solar across Maryland and surrounding states and can walk you through whether your home qualifies, what you can expect to earn, and how SREC registration works in your market. Request a free solar estimate to see what solar could save you.

SREC prices and program rules change frequently. All pricing data in this article reflects publicly available market data from 2025. Verify current rates and eligibility with a licensed SREC aggregator or your solar installer before making financial decisions. SREC income may be taxable. Consult a tax professional for guidance specific to your situation.