The solar renewable energy credit is also known as energy certificates. This is one of the best ways to companies into energy generation to earn while they are practicing efficient energy generation methods. The credit is non tangible energy commodity; however you can trade in it and also purchase it.
Each solar renewable energy credit signifies one megawatt hour of electricity which is produced from a source which could be either photovoltaic, ocean thermal, geothermal or fuel cell biomass. One can get increased benefits from each energy credit such as good grid reliability and distributed generation of power. People will rely less on imported fossil fuel and hence the emission of greenhouse gases in the atmosphere can be prevented.
In case one wants to begin facilities of generating solar credits, then the organization must obtain the necessary certifications and licenses from the respective state agencies. The plant also has to register itself with the respective regional tracking systems. As soon as the facilities begin to generate the credits, each credit can be retained by the facility. The facility can also sell or trade in those units in compliance with the voluntary markets.
In case of the compliance markets, a percentage of the electricity that is produced and sold each year should come from renewable sources. These markets have emerged in accordance with the Renewable Portfolio Standards which are present in 31 states across the United States of America.
The voluntary markets, companies, individuals and private investors purchase solar renewable energy credits for a demand of renewable energy or trading purposes. In Chicago, there is the Chicago Climate Exchange where the credits can be bought and sold. The certificates are also known as green tags or tradable renewable certificates. The certificates act as subsidies for the producers of renewable energy. The producers get a benefit of one energy credit for every MWh of the electricity that is produced by them. This energy is then transferred to the grid. The company which sells energy credits in the market is called the aggregator.
The electric producers have to make use of the SREC program in order to prove that they are compliant with the State’s Renewable Portfolio Standard. Instead of subsidies that the producers can get from the state, they can recover their investments by selling the certificates to their respective utilities.