Solar REC Costs Striking—Would FITs have been Cheaper?

By Paul Gipe

An email from Lawrence Berkeley Labs came in today promoting an upcoming webinar on the status of RPS programs around the US. Normally I just hit delete and move on. LBS does good work but the topic doesn’t interest me anymore.

I opened the message anyway and began paging through the summary when a passage leapt out at me.

“Prices for solar RECs (or SRECs) remained relatively stable, and continue to exhibit wide variation across states, with the highest prices ($200-450/MWh) in NJ, MA, and DC.”

Translated into English that’s Solar Renewable Energy Credits (or certificates), or the premium paid for solar-generated electricity, costing $0.20/kWh to $0.45/kWh in New Jersey, Massachusetts, and the District of Columbia. That’s the “premium” and doesn’t include the actual cost of the electricity. That’s on top of the solar RECs or SRECs.

Holy Cow! These are the same people that said German-style feed-in tariffs would have been much too expensive for Americans.

SREC Pricing Trends LBL 2023

Let’s just take a look. German rooftop systems up to 10 kW in 2023 will be paid €0.086/kWh and up to €0.134/kWh if they feed all the electricity back into the grid. These are not solar farms; these are rooftop systems, the most expensive form of solar pv and the Germans are only paying $0.094/kWh to $0.15/kWh—in total. And the Germans are doing this using a more equitable policy mechanism than that found in SRECs trading markets in the states.

LBL reported that SRECs elsewhere were coming in at $0.03/kWh to $0.04/kWh, which is more in line with the hype markets in RECs would achieve. However, coupled with the value of the electricity, the price paid by Americans in these other states is not significantly cheaper than that in Germany.