Illinois homeowners and businesses are increasingly turning to solar power to reduce their environmental impact and lower energy costs. While the initial investment can be significant, various incentives, including Solar Renewable Energy Credits (SRECs), can make solar more financially attractive.
When your solar system generates electricity, it also produces regional benefits such as energy security and positive environmental impact. SRECs are tradable certificates representing the value of these intangible benefits gained by producing electricity from a renewable energy source, specifically solar power in this case. These credits can be sold on the open market to utilities or other entities required to meet renewable energy mandates.
Homeowners and businesses with solar panels in Illinois are generally eligible to generate and sell SRECs. In Illinois, credits are earned at a standard rate of 1 SREC per 1000 kilowatt hours (kWh).
The Approved Vendor (installer) you contract with is responsible for selling the estimated number of SRECs your system will generate in the first 15-year period. This is usually accomplished through a partnership with a third party broker.
How you receive payment from your Approved Vendor depends on the size of your system:
The demand for SRECs stems from state Renewable Portfolio Standards (RPS). These laws oblige utilities to source a certain percentage of their electricity from renewable sources, such as solar. By purchasing SRECs, organizations can claim the community contribution they represent.
The Illinois Power Agency (IPA) has committed to reach 40% renewable energy by the end of 2030, as required by the Renewable Portfolio Standard (RPS). To make the process more efficient, Approved Vendors and Designees must submit projects to the Illinois Shines program, where utilities can then buy their share of SRECs in bulk.
The market price of SRECs can fluctuate based on factors like:
Illinois SRECs offer a valuable opportunity for homeowners and businesses to increase the financial viability of their solar investments. Consider exploring other solar incentives and programs as well, such as federal tax credits, to further enhance your financial benefits.
Larger solar systems generally produce more electricity and, therefore, more SRECs.
Carefully review contract terms with brokers or buyers to understand pricing, payment schedules, and other important details.
Stay informed about current SREC market prices and trends to make informed selling decisions.
Seek advice from solar installers, financial advisors, or energy consultants to understand the potential benefits and risks associated with SRECs.
The experienced solar consultants at Sun Collectors are well equipped to answer any questions you may have about Illinois SRECs and other solar incentive opportunities. We invite you to call us anytime at (309) 323-8260 or request a free solar consultation for a more in-depth analysis taking your specific needs into account.
