Pennsylvania

A variety of federal and state incentives, including SRECs, led to a substantial build-out of solar in Pennsylvania. However, unlike many neighboring REC markets, Pennsylvania maintains a relatively small solar carve-out of just 0.5% within its RPS. This modest requirement keeps demand for Solar RECs comparatively low. Additionally, the state's SREC program originally allowed out-of-state solar generators to participate, which greatly expanded available supply of SRECs. In 2017, the state updated its eligibility rules so that only Pennsylvania-sited systems could qualify for new SREC registrations and existing out-of-state solar registrations were moved to Tier-I RECs. Even with these changes, SREC supply has remained high relative to the small solar carve-out requirement.

In addition to SRECs, Pennsylvania solar systems may generate PA Tier-I RECs which can be used to meet the state’s broader (non-solar specific) Renewable Portfolio Standard (RPS) requirements (or also referred to as the Alternative Energy Portfolio Standard). Because Tier-I RECs can be created from a wide range of renewable resources across the entire PJM territory, many out-of-state solar systems participate in the program.