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SREC stands for Solar Renewable Energy Certificates or Solar Renewable Energy Credits. Some states, like Ohio, have a Renewable Portfolio Standard (RPS) that requires electricity suppliers to secure a portion of their electricity from solar generators. An SREC is created for every megawatt-hour of solar electricity created.
1 SREC = 1,000 kWh of solar electricity = 1 MWh of solar electricity
If you have a 10kW PV solar system you will receive about 1 SREC per month or 12 SRECs per year. The amount that is paid for each SREC is determined by the market and subject to the constraints of supply and demand.
SRECs are sold separately from the electricity and represents the solar aspect of the electricity that was produced. Sale of SRECs is intended to promote the growth of distributed solar by shortening the time it takes to earn a return on the investment. SRECs help the states reach their Renewable Portfolio Standard , and help the PV owners see a quicker return on their investment. Overall they help promote the growth of disttributed solar systems throughout the states.