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Understanding Solar Renewable Energy Certificates (SRECs)

March 17, 2025

Going solar isn’t just about clean energy—it’s about smart energy. When you install solar panels, you’re not only reducing your electricity bill, but you’re also earning valuable Solar Renewable Energy Certificates (SRECs). These credits are your reward for helping the planet, and they can translate into real money in your pocket. Here’s how they work and how you can make the most of them.

What is an SREC?

Think of an SREC as a bonus check for going solar. For every 1,000 kilowatt-hours (kWh) your system produces, you earn one SREC. These credits can be sold to utility companies that need to meet state-mandated renewable energy goals. By selling your SRECs, you’re turning sunlight into savings and helping drive the clean energy movement.

Why Do SRECs Exist?

Many states have Renewable Portfolio Standards (RPS), which require utility companies to source a portion of their electricity from renewable energy. Utilities can either build large solar farms or buy SRECs from homeowners and businesses that generate solar power. That’s where you come in—your system’s production contributes to the state’s renewable energy target, and you get paid for it.

In Illinois, the RPS mandates that 40% of electricity comes from renewable sources by 2030.

Through programs like Illinois Shines, solar adopters can sell their SRECs at competitive rates, making solar even more financially attractive.

How Much Are SRECs Worth?

SREC values vary based on market conditions, state policies, and supply and demand. In Illinois, SREC payouts depend on system size:  

  • Systems up to 25kW AC: Receive lump sum payments in year 1
  • Systems over 25kW AC: Predictable payments over a 7-Year schedule

💡 Staying informed about market conditions is key rates can shift based on state demand and regulatory changes.

How Many SRECs Will My System Produce?

The number of SRECs your system generates depends on factors like system size, efficiency, and sunlight exposure. 

How Do I Sell My SRECs?

Approved Vendors are entities approved by the Program Administrator (as an agent of the Illinois Power Agency), to submit project applications to the Illinois Shines Program and act as a counterparty to the Illinois Shines contracts with utilities. Designees are third parties (i.e., non-Approved Vendor) entities that have direct interaction with end-use customers; they include installers, marketing firms, lead generators, and sales organizations. Approved Vendors often work with Designees to manage various portions of solar system development.

📌 Prices fluctuate, so it’s smart to check work with a solar expert to time your sales for the best return.  Check out our SREC consulting servicesfor support.

Key Takeaways

✅ Earn money from your solar energy: SRECs provide additional income, reducing your payback period.
✅ SREC values vary by state: Illinois offers structured payments, while other states have fluctuating markets.
✅ Selling your SRECs An Approved Vendor registered with the Illinois Shines Program will be able to handle the application process on your behalf.  
✅ Contribute to a cleaner future: By selling SRECs, you help utilities meet renewable energy goals and drive sustainable progress.

Thinking about solar? Whether you’re considering installation or already producing clean energy, understanding SRECs can maximize your returns. Want to see how much you could earn? Let’s talk.

ilumen Solar logo with a list of reasons why to go solar to the right of the logo

Additional Questions & Answers About SRECs

What happens to my SRECs if I move?

If host system location is sold, seller must notify ilumen, LLC, and the new owner is required to agree to the SREC contract transfer and fulfillment. The 5% collateral held by the utility will transfer to the new owner. Upon any real estate transactions, ilumen, LLC will invoice the primary system owner $750 for administrative hours assisting with consulting and paperwork.

Are SRECs considered taxable income?

Yes, SRECs are genearlly considered taxable income by the IRS. The money earned from selling SRECs must be reported on your tax return, and you may owe federal and state taxes on the income. Consult a tax professional for details on how SRECs impact your specific tax situation.

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