Solar SREC Market Timing Calculator

Enter your state, system size, and current SREC price — get annual revenue, 10-year projections, and a sell-now vs. bank vs. contract recommendation.

SREC system details

State (SREC market)?

System size?

Current SREC price?

$/SREC

Banking allowed?

Market preference?

SREC income analysis — MA

13.4 SRECs/year — $2,678/yr at current price

Price Trending UPClass I

Monthly kWh generated1,116 kWh/mo

Monthly SRECs generated1.12 SRECs/mo

Annual SRECs generated13.4 SRECs/yr

Annual revenue (spot)$2,678/yr

Via aggregator (after 10% fee)$2,411/yr

5-year SREC income$14,220

10-year SREC income (trend)$30,705

Market notesSMART program, high prices, 10-yr contracts available

RECOMMENDATION: BANK & WAIT

Prices are trending up in MA. Bank SRECs for 1-2 years, then sell at higher prices. Estimated gain: $723 over 3 years vs. selling now.

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How to Use This Calculator

Select your SREC state and system size

Only 6 states have active SREC or equivalent markets: Massachusetts (SMART/Class I), New Jersey (TRECs), Maryland, Washington DC (SREC-II), Pennsylvania, and Illinois. If you're not in one of these states, your solar incentives come from federal ITC, utility rebates, and net metering — not SRECs. Enter your system's DC nameplate capacity in kilowatts (found on your inverter or installer contract).

Enter the current SREC spot price

Check SRECTrade.com, SRECergie.com, or your state's SREC registry for current spot prices. Prices range from $20-$35 in Pennsylvania to over $300 in Washington DC. The price reflects supply-demand balance: when utilities are short of renewable energy to meet their Renewable Portfolio Standard (RPS) obligations, prices rise. When there's a solar capacity glut, prices fall.

Set banking and market preferences, read the recommendation

Banking means holding unsold SRECs in your account for 1-3 years (state dependent) rather than selling immediately. Choose your market preference — spot, contract, or aggregator — and the calculator outputs annual revenue, 10-year projections, broker fee impact, and a timing recommendation based on your state's market trend.

The Formula

Monthly kWh = System kW × 24 hrs × 30 days × 15.5% capacity factor Monthly SRECs = Monthly kWh ÷ 1,000 (1 SREC = 1 MWh) Annual SRECs = Monthly SRECs × 12 Annual Revenue = Annual SRECs × SREC Price Aggregator Net = Annual Revenue × (1 - 10% broker fee) 10-Year Projection = Year 1 Revenue × trend compound factor

The 15.5% capacity factor is a US residential solar average — it accounts for nighttime, clouds, and seasonal variation. Your actual factor depends on your location and panel orientation. A south-facing system in Phoenix might reach 20%; a north-facing Massachusetts system might see 13%. Higher capacity factor = more SRECs generated = more income.

Example

Rachel — 10 kW system in Massachusetts

Rachel installed a 10 kW system in Massachusetts and is deciding whether to sell SRECs on the spot market at $200 or lock in a long-term contract. MA prices are trending upward as the SMART program creates steady demand.

StateMassachusetts (MA)

System size10 kW

Current SREC price$200/SREC

Banking allowedYes (3 years)

Result

Monthly kWh generated~1,116 kWh/mo

Annual SRECs~13.4 SRECs/yr

Annual revenue (spot)~$2,680/yr

Via aggregator (after 10% fee)~$2,412/yr

10-year income (3% trend)~$31,000

The calculator recommends Rachel bank her SRECs for 1-2 years and sell at higher prices as MA's Class I prices continue rising. A 3-year contract at $200 locks in certainty; banking sacrifices certainty for potentially $220-240 per SREC in year 2-3. Given her 3-year banking window, a split strategy — sell half now, bank half — balances risk and upside.

FAQ

What is an SREC and how do I earn them? ▼

A Solar Renewable Energy Certificate (SREC) is a tradeable credit representing 1 megawatt-hour (MWh = 1,000 kWh) of solar electricity generated. Your solar system earns 1 SREC for every 1,000 kWh it produces, verified by your utility's meter or a production monitoring system registered with the state's SREC tracking platform (e.g., NEPOOL-GIS in New England, PJM-GATS in mid-Atlantic states). Utilities with Renewable Portfolio Standards buy SRECs from solar owners to prove they've sourced a certain percentage of power from solar. You earn SRECs automatically once your system is registered — no action needed for each one generated.

Should I sell SRECs on the spot market or sign a contract? ▼

It depends on the state and market direction. Spot market gives you flexibility and potential upside if prices rise, but prices can collapse quickly (NJ went from $650 to $15 in 4 years). Long-term contracts (3-15 years) lock in a fixed price, eliminating market risk — ideal for stable or declining markets like IL and NJ. Aggregators pool small producers for better pricing but charge 10-15% fees. General rule: in rising markets (MA, DC) bank or go spot; in declining/volatile markets (NJ, PA) sign a contract immediately if you can find one. DC SREC-II program has 15-year contracts with attractive fixed prices — a rare combination of high price and certainty.

How long do SRECs take to expire? ▼

SREC expiration varies by state. Massachusetts SRECs expire after 3 years from the generation date under the SMART program framework — you have 3 years to sell a banked SREC before it becomes worthless. Maryland SRECs expire after 3 years. New Jersey TRECs expire after 1 year from generation. Pennsylvania SRECs expire after the compliance year ends (no carryforward). Illinois SRECs under the Adjustable Block Program are contracted upfront with the IPA, so expiration is moot. Always check your state's specific SREC registry rules — selling close to expiration means selling at a discount.

Are SREC payments taxable income? ▼

Yes — SREC payments are generally taxable as ordinary income at the federal level and in most states. You'll receive a 1099 from your SREC broker or aggregator if payments exceed $600 in a year. Report on Schedule 1 (Additional Income) of your Form 1040. If you're a business (LLC, S-Corp) or have a commercial system, SREC income goes on your business return. The IRS has not issued specific SREC guidance, so consult a tax professional for your situation. One important note: SRECs don't affect your federal solar tax credit (ITC) calculation — your ITC is based on system cost, not SREC income.

What's the difference between SRECs and the federal solar tax credit? ▼

These are completely separate incentives that stack. The federal Investment Tax Credit (ITC) is a one-time 30% credit on your system cost, claimed on your tax return for the year you install — it reduces your tax bill. SRECs are ongoing revenue you earn every year your system produces electricity, paid by utilities buying compliance credits. A 10 kW system might get a $9,000 ITC in year 1, plus $2,000-3,000/year in SREC income for as long as the program exists. The ITC is bigger upfront; SRECs provide years of recurring revenue that can total more than the ITC over a 10-year period in high-SREC-price states like MA and DC.

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