Green Building Community
SRECS: The Incentive for Commercial Buildings to Go Solar
Posted by: EmmamHowe // Marketing/Green Policy Development
As a commercial building owner, you can achieve significant short and long term savings by installing solar power. The benefits of solar include operational energy cost reductions, shrinking your carbon footprint, increasing your building’s asset value, and unlocking other potential health, productivity, and marketing/morale gains. Solar energy savings are achieved through electric bill reductions and protection from potentially significant energy price volatility. Since many states also offer renewable energy incentives, you can reduce your system’s installation cost by over 65% simply by taking advantage of these credits.
Solar savings benefits can also continue well beyond installation. In many situations, utility companies or solar credit markets will compensate you for the clean energy produced by your renewable solar power system, and the more energy you produce, the more you can sell back to the utilities. This process is most typically seen in the form of SRECs, or Solar Renewable Energy Certificates programs. SRECs are tradable, non-tangible energy incentives that are allotted per every one mega-watt hour of electricity produced by a solar-powered energy source. In the United States, SRECS hold value and can be purchased by utilities to meet their Renewable Portfolio Standard (RPS) requirements or how much of a utility’s electrical output must be generated through a renewable source.
How do SRECS provide a substantial return on your investment? SRECs (or bundles of SRECS) can be sold through the SREC trade, and the state market’s supply and demand constraints determine the value of an SREC. Since SRECs are sold to utilities needing to meet their solar RPS requirement, these SREC sales can make up for a substantial portion of a system’s overall cost when the system is operating at an optimal level. Thus, through the installation of solar projects and the use of SRECS, companies can actually improve their bottom line.
Note that each solar array may generate SRECs at a different pace, since the rate of generation is directly related to system production, size and location. An experienced solar developer may be able to act as a helpful resource to advise you on how to manage your SCRECs and how to receive the best price for the SRECs your system generates. Information is also available online. If you’re the owner or tenant of a commercial building, it may be worth your while to look into the SREC program for your state. For more information on the SREC state programs, visit: http://www.srectrade.com/srec_markets//
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