Sol Systems: Everything you need to know

Solar energy renewable certificates (SRECs) are some of the most attractive solar incentives available in the country. Many states with renewable portfolio standards (RPS) have special "solar carve-outs" that require a certain amount of a utility's energy production to come from solar. In these states, utility companies meet the requirement by purchasing SRECs from people producing solar energy.

If you own a solar panel system in a state with an active SREC market, you'll want to work with a third-party SREC aggregator or broker to sell the certificates to utilities on your behalf. There are various options for choosing an SREC broker; one of the more popular options solar panel system owners elect to work with is Sol Systems.

Sol Systems, based in Washington D.C., is one of the more well-known SREC brokers in the industry. They offer their services in Delaware, Maryland, Massachusetts, New Jersey, Ohio, Pennsylvania, and D.C. If you own a solar panel system in these states, you can sign an agreement with Sol Systems to handle the transaction of your SRECs. In addition to working with property owners, Sol Systems works with utilities, municipalities, and corporate partners to develop and finance solar projects.

Signing up with Sol Systems is easy - they'll work directly with your installer or financier to register your system, handle any necessary regulatory measures, and ensure your solar panel system is accurately reporting production numbers for SREC generation. Once the setup process is complete, your system will start generating sellable SRECs.

Throughout your SREC program, your Sol Systems owner dashboard will display information about your SRECs, including contracts, transaction history, and more.

Sol Systems allows you to have as much or as little control over your SRECs as you'd like. The company offers brokerage contracts, fixed pricing agreements, or upfront purchase options for SRECs.

Sol Brokerage

One option Sol Systems offers is known as "Sol Brokerage." With this setup, Sol Systems will sell your SRECs at the highest value on the open market. The price an SREC will sell for on the open market depends on many factors, including SREC supply and demand. Because Sol Systems collects a commission fee based on the value these SRECs sell for, they work hard with their team of researchers and analysts to ensure they sell these certificates at a high value.

Sol Upfront

Sol Systems also has some more unique options that are available to consumers. Depending on your market, Sol Systems may offer their "Sol Upfront" option. Under these agreements, Sol Systems pays you a one-time, lump-sum payment for your SRECs equal to the size of your solar panel system in kilowatts (kW) multiplied by their current rate for your state. This is a good option for homeowners who want to receive their SREC benefit as soon as possible rather than waiting for them over time.

Sol Annuity & Sol Combo

If you prefer a fixed-pricing agreement, Sol Systems offers two options: "Sol Annuity" and "Sol Combo." Under a Sol Annuity contract, Sol Systems would lock in the price for your SRECs for a contract term of 3, 5, or 10 years. As your system generates enough electricity to produce an SREC, Sol Systems pays you quarterly for the pre-determined price, regardless of whether the SREC sells for more or less on the market.

Sol System's Sol Combo is similar but has some critical differences: First, your contract will last ten years. Second, your fixed pricing will change after your third contract year (though it will remain at a different, fixed value for the next seven years of your agreement).

As a customer of Sol Systems, you may have to pay a commission fee for their services depending on the contact option you choose.

If you opt into a fixed-pricing or lump-sum arrangement with Sol Systems, you will not have to pay a commission fee. However, if you opt into Sol Brokerage, you will be paying Sol Systems the greater of $5 or 5% sales commission. In a lower-value SREC market like Maryland, this would likely translate to $5, while in a market like NJ, that fee is around $10.90 for selling an SREC at $218.

Sol Systems and other SREC brokers offer various options for selling your SRECs - so how do you choose the best one for you? It will depend on your preferences and how much you want to balance risk with reward.

Upfront purchase contracts are good options to consider if you want to see savings more immediately and decrease your initial cost of owning a system. This option or a fixed-pricing arrangement is also worth considering if you would feel more reassured by the predictability and guarantee offered by fixed pricing.

However, homeowners who sell SRECs throughout their respective SREC programs can earn more money over the years. While there's more risk associated with the process, SRECs can sell for more than an aggregator offers in a fixed pricing or upfront purchase arrangement.

To use an analogy, consider an upfront or fixed pricing agreement similar to investing in bonds, while a spot-market option is more similar to investing in stocks. Bonds are typically a more stable investment choice with less risk. On the other hand, stocks are much more volatile, and the prices will fluctuate much more. Despite this volatility, your payoff is often higher with stocks than with bonds.

In SREC-eligible states, EnergySage-approved installers will be familiar with the market and your various options for SREC aggregators (including but not limited to Sol Systems). It's worth researching your options and comparing fees and risks associated with multiple brokers and agreements.

If you want to explore solar in your area and learn more about how much you can generate in SREC income by going solar, join the EnergySage Marketplace. Quotes that installers upload onto our platform will automatically calculate an estimate for SREC earnings over 20 years in the "Production Incentives" section of the quote. Payback period calculations and savings projections will also account for these estimates.