Two policy mechanisms create income for solar system owners.

  1. Net metering generates income in the form of a credit for the value of the electricity that a customer-sited solar system sends to the electric grid.  The credit is applied to reduce and offset the customer’s electricity bill.
  2. Solar Renewable Energy Credits (SRECs) have different forms in different states, but most involve monetizing the value of the solar attribute of the electricity produced from a solar system.  Many states have adopted Renewable Portfolio Standards that require a portion of the state’s electricity mix to come from renewable energy sources.  Some states (including Illinois and Michigan) have further required that a certain percentage of the overall renewable energy purchases must come from solar energy.  This creates a value for solar power above and beyond the value of the kilowatts alone, and it can be monetized in the form of a payment stream to solar system owners.  Search for the programs that create income from SRECs in your state at www.dsireusa.org.