In most cases, solar panels installed on homes and businesses are connected to the municipal power grid. Many U.S. states have Net Metering policies that compensate solar panel owners for the excess electricity the panels send to the grid at a retail rate, giving credit for that amount on the user’s utility bills. This credit helps pay for electricity purchased from the utility during times when solar panels do not produce energy (at night, for example).
Solar Renewable Energy Certificates (SRECs) are certificates that homeowners can sell to their utility company. Utility companies in some states purchase them because of state laws that require the utilities to produce a percentage of their electricity from renewable resources. If a utility can’t meet the required goals on its own, it can purchase certificates from solar system owners to make up the difference.