Two policy mechanisms create income for solar system owners.
- 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.
- 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.