The VA SREC Market is an open market where prices are determined by market forces. Key factors include the Alternative Compliance Penalty along with supply and demand based on the Renewable Portfolio Standard (RPS).
Virginia passed the Virginia Clean Economy Act in 2020 essentially opening the possibility of an SREC market. Virginia-sited systems are presently eligible to register in the Pennsylvania Tier I REC market. We do not currently have a known timeline for the VA market, though we expect the market to continue to mature. The Virginia State Corporation Commission (SCC) is currently working on setting the regulations for the solar carve out of the Virginia Clean Economy Act’s Renewable Portfolio Standard which will provide much needed clarity regarding project eligibility, requirements, and future expectations.
ACP and Market Trend
The VA Market is in its infancy and the pricing is fluctuating on a sale-by-sale bases. Pricing is expected to be on the high end (closer to the ACP) as the supply is still low within the first few years. As more solar systems complete SREC registration the supply and demand structure will evolve with the potential to heavily affect pricing.
The Alternative Compliance Penalty (ACP) is set by the RPS and can be viewed as a soft benchmark for what the REC will be valued at. The ACP is a fee imposed on utilities and mandated purchasers for shortfalls in REC procurement. The VA SACP is set at $75 in 2021 for Distributed Generation (<1 MW) and increases by 1% annually thereafter.
Retroactivity and Eligibility Start Date
A system’s eligibility to start generating RECs is based on the system’s online date. A system that is not registered in the same year as its online date can generate RECs back to the beginning of the calendar year of registration.
Example: A facility that is online on 5/10/2020 and is registered on 8/20/2022 will only receive SREC payments back to January 1, 2022.
REC Shelf Life
VA SRECs have a shelf life of 5 years.
Example: A SREC generated in 2022 can be counted towards the 2022, 2023, 2024, 2025 or 2026 compliance periods.
Frequently Asked Questions
Q: How is my power bill impacted?
A: Your power bill is unaffected by SRECs. SRECs are "Solar Renewable Energy Credits" and they represent the environmental attributes of the power that you produce. You will not see any changes on your utility bill.A: Selling your SRECs has no impact on Net Metering. You can participate in both Net Metering and sell SRECs at the same time. This is because Net Metering has to do with excess energy production, whereby you can receive a credit from your electricity supplier. SRECs are solely the environmental attributes, so if you use all of your production, or put all of it back on the grid for others to consume, it has no impact on your SREC production or ability to sell them. SREC brokering and Net Metering are separate incentive programs that allow solar owners to make back money.
Q: How does this impact Net Metering?
A: Selling your SRECs has no impact on Net Metering. You can participate in both Net Metering and sell SRECs at the same time. This is because Net Metering has to do with excess energy production, whereby you can receive a credit from your electricity supplier. SRECs are solely the environmental attributes, so if you use all of your production, or put all of it back on the grid for others to consume, it has no impact on your SREC production or ability to sell them. SREC brokering and Net Metering are separate incentive programs that allow solar owners to make back money.
Q: How do I know if my system is eligible for the VA SREC Market?
A: The VA SREC Market is ruled by the State Corporation Commission (SCC) which has ruled that all systems must have a Revenue Grade Meter (RGM) which meets the ANSI C12 certification standards. If your inverter does not meet that standard and you do not have a solar dedicated meter meeting that standard your system will not be eligible. However, you may still qualify for the Pennsylvania Tier I Market which will still allow you to receive payment for SRECs.
Q: Can I sell my SRECs in a state market I don't live in?
A: It depends! Some markets do allow for systems located outside that state to participate. However, it is usually at a lower tier or class of the market which is substantially less than the "in-state" price. CSG will register your system in the highest-priced market that your system is eligible to receive. Every state market has different eligibility requirements and your system may not qualify. Check out our SRECS by State sections for more information.
For additional VA SREC market and information, please visit the guides below.