Utilities are required by law to generate a certain portion of their energy from renewable sources. SRECs are credits that represent the environmental benefits of solar power.
Solar Renewable Energy Certificates (SRECs) allow homeowners to sell certificates for energy produced by their residential solar system to their utility, which then counts toward the utility’s requirement.
Homeowners earn one SREC for every 1000 kilowatt hours (kWh) / 1 megawatt hour (MWh) produced by their solar panel system. The value of an SREC varies per location.
In Illinois, homeowners sell their SRECs into a market established by the Illinois Power Agency. You are paid 15 years of estimated SREC production in advance, when your solar system is installed. This can greatly reduce the initial cost of your solar system.