What is an SREC?
An SREC is a certificate that represents the environmental benefit of one megawatt-hour (1,000 kilowatt-hours) of solar electricity, and it can be bought and sold on its own. When your system generates that much power, you earn one SREC. The electricity flows into your home or onto the grid as usual; the SREC is a separate, paper (really digital) asset that says one MWh of clean solar was produced. You can keep the power and still sell the credit.
Think of it as two products from one system: the kilowatt-hours you use or export, and the green attribute that comes with making them. Net metering or your utility rate handles the first. The SREC market handles the second. That is why SRECs stack on top of net metering rather than replacing it. If you want to understand the bill-credit side, see how net metering works.
A typical home system in the 7 to 9 kW range makes roughly 8 to 11 MWh a year, so it earns about 8 to 11 SRECs a year. To see how many kilowatt-hours your own roof would produce, and therefore how many SRECs, size a system with the solar panel calculator.
How do SRECs work?
SRECs exist because of state Renewable Portfolio Standards (RPS), laws that require utilities to source a set percentage of their electricity from solar. To prove they met the solar target, utilities and other electricity suppliers have to hand over SRECs to the state. They buy those certificates from solar owners like you, which is what creates the demand and the price.
Every SREC market has a built-in price ceiling called the Solar Alternative Compliance Payment (SACP). If a utility cannot buy enough SRECs, it pays this fee per missing credit instead. Because no utility will pay more for an SREC than the fine it avoids, the SACP sets the top of the market and SREC prices trade somewhere below it based on supply and demand. When lots of new solar comes online, supply rises and prices tend to fall.
Your part is simpler than the market machinery behind it. Your system's meter reports how much it generates, that generation is certified into SRECs by a regional tracking system, and you (or a broker acting for you) sell the credits. The certificates usually have a shelf life of a few years before they expire, so they are meant to be sold, not hoarded.
Which states have an SREC market?
Only a small number of states have a solar carve-out that creates SRECs, and if you are not in one, you have no SREC market at all. The states with active or legacy solar-credit programs are mainly New Jersey, Massachusetts, Pennsylvania, Maryland, Washington D.C., Ohio, Delaware, Virginia, and Illinois. Everywhere else, your solar earnings come from bill savings and net metering, not from selling certificates.
The mechanics differ a lot by state, and several have moved away from open trading. Washington D.C. has historically had the most valuable SRECs because its solar requirement is aggressive and its market is small. States like Illinois (Illinois Shines) and Massachusetts (the SMART program) have shifted to administratively set payments made over a fixed term rather than a live spot market, and New Jersey replaced its original SREC market with a successor incentive. So even among SREC states, whether you get a floating market price or a fixed payment depends on the current program.
Because these programs change often, confirm the rules in your own state before counting on SREC income. A state's public utilities commission or energy office is the authoritative source, and it will also tell you whether new systems still qualify, since some programs have closed to new entrants once they hit their targets.
How much is one SREC worth?
One SREC's value swings enormously by state and year, from single digits to several hundred dollars. At the low end, markets like Ohio and Pennsylvania have at times traded SRECs for only a few dollars each. At the high end, Washington D.C. SRECs have been worth several hundred dollars apiece. Maryland, New Jersey, and Massachusetts have generally sat somewhere in between. These are moving numbers, not fixed rates, so treat any figure as an estimate and check the current market in your state.
The price is set by supply and demand under that SACP ceiling. When a state is short of its solar target, SRECs are scarce and expensive; when solar installs boom, credits pile up and prices drop. That volatility is the catch with SRECs: a market paying $200 a credit today can pay far less in a few years, which is why some owners lock in a multi-year contract instead of riding the spot price.
To put it in yearly terms: a home system earning 9 SRECs a year would bring in about $900 a year at $100 each, but only around $90 a year at $10 each. That range is exactly why SRECs are a bonus to model conservatively, not a number to build your whole payback around. For the full cost picture, see how much solar costs and the ways to pay for a system.
How do you sell SRECs?
You sell SRECs by registering your system with your regional tracking system, then selling the credits through an aggregator or broker. In the mid-Atlantic and Midwest SREC states, generation is certified through the PJM-EIS Generation Attribute Tracking System (GATS); other regions use systems like M-RETS or NEPOOL-GIS. Registration is a one-time step that ties your metered production to your account so credits can be issued in your name.
Most homeowners do not trade SRECs directly. They sign up with an aggregator such as SRECTrade or Sol Systems, which handles the registration paperwork, collects the credits your system earns, and sells them, taking a cut. Your installer often sets this up or points you to a broker. From there you choose how you want to sell.
You have two basic options. Spot-market sales pay whatever the credit is worth the day it sells, which is great when prices are high and painful when they crater. A fixed-price contract locks a set dollar amount per SREC for several years, trading some upside for predictable income. If your state's SREC prices are strong now, many owners take the certainty of a contract; if the market looks like it is climbing, the spot market can pay more.
Are SRECs still worth it after the federal tax credit expired?
Yes, where a market exists, because SRECs are state incentives that are completely separate from the federal tax credit. The 30% federal residential credit (Section 25D) expired for owned systems placed in service after December 31, 2025, but that change did nothing to SREC programs, which are run by states, not the IRS. If anything, state incentives like SRECs matter more now that the big federal subsidy is gone. See our breakdown of the 2026 federal solar tax credit for what actually ended.
The honest limits are worth stating plainly. SRECs only exist in about nine states plus D.C., so most of the country cannot earn them at all. Where they do exist, the income is not guaranteed: prices fall as more solar is built, programs close to new systems once targets are met, and some states have swapped live markets for smaller fixed payments. Modeling SREC income as a modest bonus rather than a pillar of your payback keeps you from being disappointed if prices slide.
For a homeowner, the move is to treat SRECs as found money on top of the real economics: the electricity you offset, your net-metering credits, and any state rebate or property-tax exemption. Solar can still pay off in an SREC state without heroic assumptions about credit prices. Just confirm your state's current program, register through a reputable aggregator, and decide up front whether you want spot-market upside or contract certainty.
Frequently asked questions
How much is one SREC worth?
It depends heavily on the state and the year. SRECs have traded from just a few dollars each in weaker markets like Ohio and Pennsylvania to several hundred dollars in Washington D.C., with Maryland, New Jersey, and Massachusetts often in between. Prices move with supply and demand under each state's compliance-payment ceiling, so any figure is an estimate. Check the current market in your state and treat SREC income as a bonus, not a guarantee.
How do I sell my SRECs?
First register your system with the regional tracking system that certifies your generation (PJM-EIS GATS in the mid-Atlantic and Midwest, or a system like M-RETS or NEPOOL-GIS elsewhere). Then sell the credits through an aggregator or broker such as SRECTrade or Sol Systems, which handles the paperwork for a cut. You can sell on the spot market for the current price or sign a multi-year fixed-price contract for steadier income. Your installer often sets this up for you.
Are SRECs taxable income?
Generally yes. Money you receive from selling SRECs is usually treated as taxable income, and brokers may issue a 1099 for it. The IRS has not published detailed guidance specific to residential SRECs, and how it applies to your situation can vary, so this is not tax advice. Talk to a tax professional about how to report SREC income before you file.
How often are SRECs paid out?
You earn one SREC for every 1 megawatt-hour (1,000 kWh) your system generates, so credits accrue as you produce power rather than on a fixed schedule. A typical home system earns roughly 8 to 11 SRECs over a year. How and when you get paid for them depends on your arrangement: spot-market sales pay when each credit sells, while a fixed contract pays a set amount per credit, often disbursed monthly or quarterly by your aggregator.
Which states have SREC programs?
SREC or solar-credit markets exist mainly in New Jersey, Massachusetts, Pennsylvania, Maryland, Washington D.C., Ohio, Delaware, Virginia, and Illinois. Most other states have no SREC market, so solar there earns through bill savings and net metering instead. The programs also change often, and several states have shifted from open trading to fixed administrative payments, so confirm your state's current rules with its utility commission or energy office before counting on the income.