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Solar Renewable Energy Credits (SRECs) have created a gold rush of solar installations in U.S. states like Massachusetts, Ohio, Maryland, Pennsylvania and New Jersey. However, these self-correcting incentive programs may significantly dash future market growth expectations, says PHOTON Consultings new U.S. solar market study, End of the Gold Rush: Crash of U.S. SREC Markets. According to the study, the rush to install solar power is leading to considerably more SREC supply than utilities are required to buy. This means many homeowners and businesses with solar installations may be left in the cold without the paybacks they anticipated, a situation already occurring in New Jersey and Pennsylvania.
"Suppliers, developers, installers, financiers and customers looking to lock in high returns in U.S. solar should move cautiously with their project risk appetite, SG&A and expansion plans in the Mid-Atlantic and Northeast markets," says PHOTON Consulting consultant and study co-author, Chris Bolman. "Imminent IRR risk in several of the countrys largest solar segments doesnt quite support the straight-shot growth story a lot of market participants are looking for in U.S. solar."
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