The SRECTrade Auction

Sign up to sell SRECs

SRECTrade's monthly auction is designed and optimized to match buyers and sellers of Solar Renewable Energy Certificates (SRECs) in the most fair and efficient manner possible.  In addition to the auction, SRECTrade has created EasyREC, a service dedicated to automating the offer process and eliminating any work on the part of the seller.  Find out more on the EasyREC page.  This page has detailed information regarding the mechanics of the SRECTrade auction.

Auctions are held monthly and close on the day SRECs are issued in the corresponding SREC registry. Prices are published the business day following the auction close. The best rule of thumb is to expect SRECs sold the first week of each month and payments received the last week of each month.  Here is the timeline once an auction closes:

At any time, users can log onto the SRECTrade website and indicate the number and price of SRECs they would like to buy or sell. Each of these indications is known as an "order." SRECTrade accumulates these orders over the course of the month. At the end of each month, there will be an auction in which as many orders as possible are executed.

To maximize the number of orders executed in each auction, SRECTrade determines a market clearing price at which all eligible SRECs will be traded. To determine the market clearing price, SRECTrade ranks the orders to buy SRECs ("bids") from highest price per SREC to lowest price per SREC and ranks the orders to sell SRECs ("offers") from lowest price per SREC to highest price per SREC. SRECTrade then starts a matching process, pairing the lowest offers with the highest bids. SRECTrade continues down the list of orders, matching higher bids with lower offers, until bid and offer values are equal; this point of equality is the auction's clearing price. It is at this clearing price that all the matched bids and offers are exchanged. Any bids to buy below the clearing price and any offers to sell above the clearing price will not be exchanged. This ensures that sellers never receive less than their offer price and buyers  never pay more than their bid price.

The following example illustrates the auction process. At the end of the month, the bids and offers are ordered by price as shown in the table below. SRECTrade begins by matching the highest bids to buy ($630 per SREC) and the lowest offers to sell ($600 per SREC). In this scenario, the bid $630 per SREC for 10 SRECs is matched with the offer 10 SRECs at $600 per SREC. Then, moving down the list, the bid $620 per SREC for 10 SRECs is matched with the offer 10 SRECs at $610 per SREC. Lastly, the bid $610 per SREC for 5 SRECs is matched with the remaining offer 5 SRECs at $610 per SREC. Beyond this point, the remaining bids are lower than the remaining offers and thus, the market clearing price has been determined: $610/SREC. All 25 bids and 25 offers are executed at this market clearing price of $610/SREC. This method maximizes the number of SRECs sold in the most fair and efficient manner possible.

In the event that there are more bids than offers at the market clearing price, as shown above (or vice versa), SRECTrade allocates SRECs to the bidders at the market clearing price in an amount proportional to their total order quantity at that price. In the event that prorating the available SRECs according to order size results in the need for fractional SRECs, the orders with earliest date of entry will be prioritized. For example, in the scenario illustrated above, only 5 of the $610 bids were needed to establish the market clearing price, but there were 10 total bids for $610. Because the number of bids at the clearing price exceeds the number of SRECs available at that price, the bids to buy will be filled in the order in which they were placed based on the size of the bidders' quantity bid at that price. For sellers, all clients utilizing SRECTrade's management service (i.e. EasyREC) effectively place automated offers at the beginning of each auction period. If order entry date does not resolve a tie, possible if multiple managed sellers are involved in the tie, the seller who has been an SRECTrade client the longest will fill their order first. Please watch the video below for more explanation on the auction process.

In a real auction, the list of bids and offers can only be seen by SRECTrade. SRECTrade operates completely independently from any potential buyers and sellers, and as such, we maintain the privacy necessary to prevent either buyers or sellers from unfairly manipulating the market. The fees associated with the SRECTrade auction can be found on the SRECTrade Fees page.