SRECs, or Solar Renewable Energy Certificates, are solar incentives available in some states. In states with a SREC market, there is a Renewable Portfolio Standard (RPS) that the utilities must meet. Essentially, the utilities have to have a certain amount of their energy production come from solar. If they cannot reach that mark, they will purchase the solar you produce as SRECs. It’s important to note that SRECs are an additional benefit you get as a part of going solar and has no effect on the savings you already get from your system.
The way it works is pretty simple. For every megawatt-hour (MHW) your system produces, you get 1 SREC. For some perspective, you’ll get around 12 SRECs a year from a 10kW system. Once you have them, you can trade them much like you would on the stock market. Your installer will set you up with a trader account, and you can begin trading as soon as your system produces an SREC. Since this market operates much like the stock market, the value will fluctuate based on simple supply and demand. Some financiers will allow you to sell your SRECs to them, reducing either your total cost or monthly payment on your solar system.
How you choose to manage these is ultimately up to you, but in states with this market, it is a fantastic solar incentive.