@DanPaul02 wrote:
After you receive enough income from SRECs to recover the $55,000 investment, then additional SREC's will be taxable income.
The credits are taxable income from day 1. See IRS ruling
https://www.irs.gov/pub/irs-wd/1035003.pdf
You would report them as "other income". You are not a small business selling electricity, so this is not going on a schedule C or subject to self-employment tax.
The payor is probably required to issue a 1099-MISC if the payment is more than $600 in any year. You can enter this as income. Even if the payments are smaller and no 1099 is issued, you would enter this as other miscellaneous taxable income.