SREC vs. Net Metering: What’s the Difference?

Get the Most Financial Payoff from Your Solar Panel System

Prospective solar customers often ask us, “what is an SREC? Is that the same as net metering credits?”

SRECs and net metering are similar in that they’re both smart ways for grid-tied solar panel system owners to maximize the financial results of their system. However, they’re different in the ways they ultimately pay off.

SRECs put cash in your pocket while net metering credits (or debits) your utility account to help even out your energy bills. Read on to learn more about the differences between SRECs and net metering.

What is an SREC?

SRECs (Solar Renewable Energy Credits) are credits from a utility company for the production of clean solar energy. Essentially, utility companies are mandated by state and federal governments to produce a certain amount of clean energy. Instead of adding renewable energy to their plant, they simply pay you to produce clean energy for them.

The great part about SRECs is that you’re not losing or selling the actual energy back to the utility. You’re able to use all the energy you produce and get paid for it. The utility company is really just paying you for the ability to take credit for the clean energy produced by your system. It’s a no-brainer for folks with grid-tied solar systems!

How do SRECs work?

A homeowner earns one SREC for every 1,000 kilowatt hours (kWhs) that their solar panel system produces. On average, a system produces somewhere between 2 and 6 SRECs per year. The exact amount you are paid depends on the rate offered by your utility. Keep in mind SRECs are not available in all states. Contact our expert solar consultants to see if you’re eligible.

grid-tied ground mount solar array

What is net metering?

Net metering is different from SRECs because it does not result in income. Still, net metering can help you save money by lowering or even zeroing out your energy bill.

Essentially, net metering is a system of credits and debits that is calculated based on how much energy your solar panels produce vs. how much energy you are consuming.

How does net metering work?

Let’s say that in July your grid-tied system produces more energy than what your home ends up using. That excess energy will be sent out into the main utility grid for others to use and you will be credited for it (not paid just credited with the amount of excess energy you made). Then, let’s say that in December your energy needs end up outweighing what your system produces. You can use those credits you earned back in July to cover the cost of pulling additional energy from the grid in December. These debits and credits will ebb and flow over the course of the year, keeping you from having to worry about monthly bills while ensuring you always have access to the energy you need. Once a year you can settle up with the utility company if you end up owing them anything. Unlike an SREC you won’t ever get cash for producing extra electricity. However, you can apply your excess credits to another bill of your choice (another property, family member, etc.).

Summary

While SRECs and net metering are both great ways to get the most bang for your buck, they differ in how you are rewarded for the excess energy you produce. Together, SRECs and net metering can work to ensure you get the maximum financial benefits from your grid-tied solar energy system.

Contact MOXIE today to learn about every solar incentive you’re eligible for and to start saving on energy costs now!

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