What is an SREC? [HS TV Ep. 2]

In the past, we’ve written on the basics of SRECs but I wanted to get a more in-depth perspective on what an SREC is, how the markets are developed and are different from each other and how the SREC market will develop in the future.

Two weeks ago, I did a gerat interview with Sam Rust from SRECTRade. Now that the east cost solar market is mainly driven by SRECs we’ve been getting a lot of questions from solar installers about SRECs, what they need to know about them, and how to communicate their value to clients.

The full interview is at the bottom of the post. I originally posted this on Renewable Energy World as a felt the topic and discussion points would lead to a great conversation but wanted to share it with the HeatSpring crowd as well.

On a side note, HeatSpring TV is on a role and we’re getting into our grove. I fully expect to have a new episode at least every other week and we may start doing weekly episodes very soon as well. I plan to put out an editorial calendar in the next 2 weeks for HeatSpring TV and start to line up guests for those spots. If you have a suggestion for a theme, please leave it in the comments section. Read below to see the full interview, join HeatSpring’s linkedin group to connect with other clean energy pros or ask a business questions you may have.

Heres is an overview of what we discussed with the appropriate timestamps.

• (00:20) What is an SREC? How are they made? Why do the programs differ in different states?
• (1:35) The key SREC markets in the US
• (2:00) Out of state vs closed off SREC programs
• (2:40) How out-of-state SRECs work. What are the rules that govern who can sell SRECs into another state
• (4:21) The development of solar thermal SRECs and the requirements for the few states that allow them
• (5:50) Why states aren’t pushing for solar thermal srecs at the moment
• (7:20) Thoughts on the current transparency and understanding of how the SREC markets work and if they will improve in the near future
• (9:25) Does SREC trade have a stance on SREC markets that are preferred over others or best practices in creating and administering SRECs? What drives the development of the difference between states SRECS programs
• (11:10) The balance between solar rebates and SRECs
• (12:00) How federal incentives can distort the state level SREC markets and prices
• (13:00) What do you find are the typical things that installers need to be educated about SRECs?
• (15:25) Thoughts on the elusive “long term SREC” contract
• (17:05) Why load serving entitues (power generators) only want to purchase SRECs in 1 – 3 year increments and why you won’t be able to find a 10 year contract
• (19:00) Do you think Wall Street will be getting into SRECs? Will they be bankable and traded like other commodities?
• (20:00) What makes the Massachusetts SREC market special with the price floor and how they it helps banks get involved
• (21:10) The main themes of SRECs are 1) they’re difficult to predict. Supply is driven by the attractiveness of solar in the state and a secondary rebate and demand is driven by a solar carve out 2) how they noticed SRECs being developed in each state 3) the development of out of state SREC allowances
• (22:40) Comparing and contracting feed-in-tarrifs in California and SRECs in the east coast market. How the development of different programs is driven by the political environment and utility regulation.

 Photo Courtesy: SREC Trade