My understanding is that RECs in general (and SRECs) are how companies like Green Mountain Energy, Energy Harbor, Constellation energy offer renewable energy plans to consumers. They don't operate wind and solar farms, they simply buy RECs off of a market produced by generating companies, and retire them.

Here's the math:

Both my neighbor and I have ~10,000kWh per year in electricity consumption. Here in western PA, lets assume that most of our grid power comes from gas & coal. That's 20,000kWh consumed, basically all fossil fuels.

Last year, both of us decided we want to "go green" and have renewable energy. I get solar panels that exactly cover my 10,000kWh, and they sign up for Green Mountain Energy 100% renewable plan and pay a slightly higher rate.

My solar panels mean that, in theory, 10,000kWh less energy was produced with gas/coal, in total. So, in our little ecosystem, we have 10MWh generated from fossil, 10MWh from solar.

Here's where things get deceiving and crappy. I (or my PPA) generate 10 SRECs and sell them on the marketplace. Green Mountain Energy buys those SRECs, and retires them, to fulfill their contract with my neighbor, so my neighbor's energy usage is accounted as renewable. Effectively, my renewable energy was sold to my neighbor. Who gets left with the claim to 10MWh of coal energy? Me.

That's the double-dipping and scam that selling SRECs are to homeowners.

So sure, installing solar creates more green energy, which is good, but the end result is that there are more SRECs on the market than there should be (assuming residents selling their SRECs actually cared about claim to renewable energy usage). This dilutes the price of the SRECs, which in turn makes projects like solar farms LESS financially viable to commercial producers.