Quick definition
Some states, in setting their renewable portfolio standard requirements, carve out a specific sub-target that must come from solar generation specifically, not just renewables broadly. In these states, solar generation earns its own distinct certificate type, an SREC, separate from the broader REC market, which can be sold to utilities needing to meet that specific solar requirement.
This creates a real, sellable income stream for solar system owners in states with an active SREC market, on top of whatever direct bill savings the system provides.
At a glance: SREC markets exist only in specific states with a dedicated solar carve-out requirement; not every state has one, and market rules and pricing vary considerably between the states that do.
Why it matters
In a state with an active SREC market, this can be a genuinely meaningful additional income stream on top of standard bill savings, since it's a separate financial value tied specifically to your system's solar production, sold independently from the power itself. For homeowners in the right state, factoring realistic SREC income into overall solar economics can materially improve the project's financial picture. The Database of State Incentives for Renewables and Efficiency is the standard national resource for checking whether a given state currently maintains an active solar carve-out and SREC market.
SREC pricing isn't fixed or guaranteed, though, and genuinely fluctuates based on supply and demand within the specific state market. As more solar capacity gets installed within a state, SREC supply can increase relative to the compliance demand utilities need to meet, which can put downward pressure on SREC prices over time. This is exactly why relying on a specific, precise SREC income projection for many years into the future carries real uncertainty.
Because SREC markets are entirely state-specific, checking whether your particular state actually has an active program is the essential first step before assuming SREC income applies to your project at all. New Jersey's Successor Solar Incentive Program is a real, active example of one of these state programs in action, requiring registration, a metering verification process, and an account with a designated SREC-II administrator before a homeowner can actually begin receiving payment for certificates. A neighboring state might have an active, well-established SREC market while yours has none, making this exactly the kind of detail worth confirming with current, local information rather than general assumptions. To see SREC in a real example, the levelized cost of energy calculator in our Savings & Payback section applies it to a working system.
Where you'll see this
The SREC market price comparison tool shows current pricing across different active state SREC markets.
The SREC value estimator works out the potential income from your specific system's solar production in an eligible market.
This term comes up in state renewable portfolio standard compliance documentation, in solar financial proposals for eligible states, and any discussion of additional income streams beyond direct bill savings from a solar installation. The Environmental Protection Agency's guidance on solar power use claims explains how certificates prove where renewable electricity came from.
Frequently asked
No. SREC markets only exist in specific states that have adopted a dedicated solar carve-out requirement as part of their renewable portfolio standard. States without this requirement generally don't have an active SREC market, so checking whether your state has one is essential before assuming SREC income applies to you.
No, SREC prices can fluctuate significantly based on supply and demand within the specific state market, including how much solar capacity has been installed and how compliance requirements are structured. Prices in one state market can differ substantially from another, and can shift meaningfully over time within the same market.
Typically your system needs to be registered with the relevant state program and metered in a way that verifies actual solar production, since SRECs are generated based on real, verified generation, not just installed capacity. Requirements vary by state program.
This is typically done through a registered SREC broker or aggregator that handles the sale on your behalf, or in some cases directly on a state's SREC trading platform. Specific processes vary by state, so checking your state program's specific rules is the reliable way to understand the actual selling process.