Solar renewable energy certificates (SRECs) are a performance-based solar incentive that allow you to earn additional income from the electricity your system generates. As a homeowner, you can earn one SREC for every megawatt hour (MWh) or 1,000 kilowatt hours (kWh) of electricity your system generates.
SRECs exist because of state regulations known as renewable portfolio standards (RPS), which require utilities to produce a specific percentage of their electricity from renewable resources.
To meet these requirements, utilities purchase renewable energy certificates (RECs) (also known as renewable energy credits). And these certificates serve as proof that they have either produced renewable electricity themselves or paid someone who is producing renewable electricity for the right to “count” that green electricity as their own generation.