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The Pennsylvania SRECs vs net metering difference comes down to this: net metering pays you for the electricity your solar system produces, and SRECs pay you for the fact that the electricity came from a renewable energy source. Two separate payments, one solar energy system, and you get both.
Net metering pays for the electricity your panels produce. SRECs pay for its renewable attribute. Pennsylvania homeowners earn both at once. Net metering is roughly 85 to 90 percent of annual value. Net metering is automatic; SRECs require PUC and PJM-GATS registration, which TerraSol Energies files for customers across Chester and Delaware County.
I have been explaining this to homeowners in Chester and Delaware County since I joined my family’s business. My father, David Santoleri, started TerraSol in Chadds Ford in 2009.
In that time, I have watched the Pennsylvania SREC market swing from under $10 to over $60 and back down again. I have also watched a lot of customers sign contracts without understanding which of these two things was actually paying for their solar investment.
So here is the version I give people at the kitchen table.
Net metering is a billing mechanism. SRECs are a commodity you sell.
When your solar panels produce more electricity than your house is using, the excess power flows to the grid and your meter records it. Your electric utility credits you for those kilowatt-hours. That is net metering. It shows up on your utility bill, and net metering reduces what you owe.
Solar renewable energy certificates are separate. Every time your system generates 1,000 kilowatt-hours, which is one megawatt hour, you earn one certificate.
That certificate represents the renewable attribute of the solar electricity, not the electricity itself. You sell it on the open market to energy suppliers who need it. The cash lands in your bank account, not on your electric bill.
The most common question I get is which one to pick. You do not pick. Solar system owners in Pennsylvania earn both at the same time.
Pennsylvania SRECs vs net metering, side by side
| Net Metering | SRECs | |
|---|---|---|
| What it pays for | The electricity produced | The renewable energy attribute |
| Who pays | Your electric utility | Energy suppliers, via an SREC broker or aggregator |
| How you get paid | Net metering credits on your utility bill | Cash from SREC sales |
| Unit | 1 kWh exported, 1 kWh credited | 1 megawatt hour generated, 1 SREC |
| Price behavior | Tied to your retail rate, predictable | Set by market demand, moves around |
| Extra signup needed | No, handled at interconnection | Yes, PUC certification plus GATS registration |
| Share of annual value | Roughly 85 to 90 percent | Roughly 10 to 15 percent |
Want to know what both are worth on your roof? Send us your address and last year’s power use. We’ll show you the net metering number and the SREC number side by side. (888) 873-9995!
Pennsylvania’s net metering rules come from the Alternative Energy Portfolio Standards Act of 2004 and sit in Title 52, Chapter 75 of the Pennsylvania Code.
We wrote a plain-English breakdown of net metering a while back if you want the fundamentals first.
Here is the sequence for a normal house. Your solar panels produce more than you need in the middle of the day. That excess electricity goes to the grid, and you bank it as a credit at the full retail rate, for residential systems up to 50 kW.
At night and through the winter, you pull those credits back to cover what you use. You pay only for net consumption. At the end of the annualized billing period, which runs to May 31, any credits you have not used get cashed out at your utility’s Price to Compare rate. That is the generation-only rate, and it is lower than full retail.
That last detail is why I push back when someone asks me to fill their whole roof. If you build a system that produces far more electricity than you use, the surplus gets bought back at the lower rate.
You paid retail prices for panels that are earning wholesale. I size systems to annual consumption, and I would rather lose a bigger sale than hand a customer a system that overproduces for 25 years. If you want the math behind that, start with how many solar panels you actually need.
One thing that has changed, and that a lot of national sites have not caught up on: net metering is no longer identical across Pennsylvania utility companies.
PECO has kept conventional one-to-one net metering with no proposed tariff change as of 2026, and with a residential rate near $0.21 per kWh, PECO territory has some of the better solar economics in the state.
PPL has moved through a rate case proposing to shift customer-generators onto an hourly, LMP-based rate. The FirstEnergy companies have filings in motion.
Practically, that means a net-metered kilowatt-hour in Chadds Ford is not worth the same as one in Allentown. If an installer gives you a payback number without telling you which utility tariff it is based on, ask. That is one of several questions worth raising when you are comparing solar quotes side by side.
Where the tariff is moving to hourly pricing, as PPL has proposed, battery storage starts to matter. It lets you shift export into higher-value hours instead of sending everything to the grid at midday.
Our guide to residential energy storage covers how that decision works.
Which utility do you have? It changes your payback more than the panel brand does. TerraSol Energies checks your utility’s current rate before we give you a number. Ask for one built on your rate, not a state average. Request a custom solar proposal with our expert team now!
Solar renewable energy credits exist because state law created demand for them. Pennsylvania’s Alternative Energy Portfolio Standard sets renewable energy requirements for electric utilities and energy suppliers, including a solar carve-out of 0.5 percent.
Suppliers either buy SRECs to meet it or pay a Solar Alternative Compliance Payment, which is set at twice the weighted average SREC price for the reporting period. That payment acts as a ceiling. No supplier pays $45 for compliance when certificates are trading near $22.
That is the whole reason Pennsylvania SRECs exist. There is no environmental fund writing you a check. There is a legal requirement, and you are selling into it.
SRECs are not automatic. Net metering gets handled inside your interconnection paperwork. The SREC program takes two more filings.
First, your solar system has to be certified with the Pennsylvania Public Utility Commission under the AEPS program. Applications run through the PENNAEPS portal, which the PUC administers under contract. You get a state certification number confirming the system qualifies.
Second, you register with PJM-GATS, the Generation Attribute Tracking System that covers Pennsylvania, New Jersey, Maryland, and the rest of the PJM footprint. GATS is what mints and tracks the certificates. There is an application fee around $50 plus small annual fees, and you get a GATS ID for your system.
Once you are in, your solar production reports into GATS and SREC credits get issued each time the system generates another megawatt-hour. You then sell them through an SREC aggregator, a broker, or a platform like Flett Exchange or Sol Systems.
I have picked up customers who went solar with another company three or four years earlier and had never been registered. Their solar panels were producing fine. They just were not earning SREC income, and there is no retroactive fix for most of it.
If you already have solar and you have never received an SREC payment, go check your GATS status this week. Registration only works if the production data is accurate, which is another reason monitoring and maintaining your panels matters more than most people expect.
SREC prices here have historically run lower than New Jersey or Massachusetts because the solar carve out is small. The Pennsylvania market also used to be open to generators in neighboring states, which kept supply high and prices down. Act 40 of 2017 closed the border and required solar to be delivered into Pennsylvania to qualify. Prices moved up after that.
In 2026, Pennsylvania SRECs have traded in roughly the $22 to $40 range, with spot quotes near $22 to $22.50 earlier in the year. For an 8 kW residential system producing about 10,000 kWh a year, that is 10 SRECs and roughly $220 to $400 in annual income.
You can sell spot or lock a multi-year fixed contract. Fixed gives up upside for certainty. Spot catches rallies and also catches drops. I have had customers do well both ways.
What I tell people is that if the SREC number is what makes your solar loan work on paper, the system is too expensive. SREC earnings should be the bonus, not the load-bearing wall.
Request a custom solar proposal, and we will discuss SRECs and net metering.
Run the numbers on that same 8 kW system in southeastern Pennsylvania.
Net metering offsets about 10,000 kWh a year. At a PECO-area rate near $0.21 per kWh, that is roughly $2,100 in avoided electric bill cost. SRECs add $220 to $400 on top.
Net metering decides whether solar works for you. SRECs decide how much faster it works. If you are building a full payback model, our breakdown of what solar actually costs over its lifetime walks through the rest of the inputs.
Rising utility rates make that first number grow over time, which is the part most homeowners underestimate. Electricity costs in this region have been climbing for years, and every increase makes a net metered kilowatt-hour worth more. The customers I revisit a year after installation almost never talk to me about SRECs. They talk about what their utility bill did.
Some of these overlap with the misconceptions we hear most often from Pennsylvania homeowners, but these are specific to how you get paid.
“I own the system, so I own the SRECs.” Only if you own it. With a solar lease or a PPA, the leasing company usually keeps the renewable energy credits on leased systems. Only the owner of the solar energy system earns SREC income. Read that section of the contract before you sign it. This is one of the costs people miss when they weigh leasing against owning your panels.
“Net metering means a monthly check.” No. You accumulate credits that roll forward, and only the year-end surplus gets cashed out, at the lower rate.
“SRECs are guaranteed for 15 years.” No. Your eligibility continues; the price does not. SREC prices move with market demand and with proposed legislation. There have been bills in Harrisburg to raise the solar carve out and bills that would tighten net metering. Neither is a sure thing.
“SREC money is tax-free.” SREC sales are generally treated as taxable income. Net metering credits are a reduction in a bill, not income. I am not an accountant. Ask a tax professional about your situation.
The federal solar tax credit under Section 25D expired December 31, 2025, under the One Big Beautiful Bill Act signed July 4, 2025. If you buy a solar system with cash or a solar loan in 2026, there is no federal credit.
For context on what that credit did for the industry while it lasted, it was the single largest driver of residential adoption for over a decade. Third-party ownership through a lease or PPA can still access the Section 48 commercial credit, and that can be reflected in the lease terms. Commercial, agricultural, nonprofit, and municipal projects follow different rules.
With 25D gone, net metering and SREC income now carry more of the payback than they did a year ago. The utility tariff differences that used to be a footnote matter now.
Community solar is also coming. HB 1155 was signed April 7, 2025, but it is not running yet. The Pennsylvania Public Utility Commission was directed to produce implementation rules by April 2026, with first subscribers expected in late 2026. It is separate from both net metering and SRECs, and it mostly helps renters and shaded roofs.
They pay for different things. Net metering credits the electricity your solar panels produce. Solar renewable energy certificates pay for the renewable attribute of that same electricity.
You earn both, not one or the other. Net metering is roughly 85 to 90 percent of your annual value. SREC income is the remaining 10 to 15 percent.
Net metering is automatic. SRECs are not. SREC income requires AEPS certification with the Pennsylvania Public Utility Commission and registration in PJM-GATS, and plenty of solar owners never get signed up.
I have been doing this long enough to know that the spreadsheet is not what people remember. The thing I like most about this job is going back a year after a solar installation and finding out the customer barely wants to discuss solar technology anymore.
They tell me about the addition they built or the new job. Our veteran customers are the exception. They know exactly how much electricity their system produced last month and exactly what the rain in May did to it.
We will pull your actual usage, check your utility’s current tariff, and show you the net metering and SREC numbers for your specific address. No obligation. Call (888) 873-9995
Yes. They pay for different things. A certified, GATS-registered solar system earns both at the same time.
Net metering, by a lot. It is roughly 85 to 90 percent of the annual value for residential systems in Pennsylvania.
One per 1,000 kWh. A 7 to 8 kW system in southeastern Pennsylvania generates about 9 to 11 SRECs a year. Since SRECs are tied directly to output, anything that improves your system’s production also increases SREC earnings.
Yes. AEPS certification with the Pennsylvania Public Utility Commission through PENNAEPS, then PJM-GATS registration. TerraSol files both for our customers.
They are cashed out at the end of the May 31 billing period at your utility’s Price to Compare rate, which is lower than the full retail rate you earned during the year.
Usually not. The leasing company typically keeps the renewable energy credits on leased systems. Check your contract before you assume the SREC income is yours.
Generally yes, SREC sales are treated as taxable income. Net metering credits are a reduction in a bill, not income. Confirm with your tax professional.
TerraSol Energies, Inc. develops and manages turnkey solar solutions that provide renewable energy means for homeowners, business owners, and non-profits.
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