Solar

US solar faces SREC crash

SRECs have fueled a “gold rush” of solar installations in Massachusetts, Ohio, Maryland, Pennsylvania, and New Jersey. The self-correcting incentive programs could put the brakes on future US solar market growth expectations, warns PHOTON Consulting, in “End of the Gold Rush: Crash of U.S. SREC Markets?”

September 23, 2011 — Solar renewable energy credits (SRECs), government rebates for solar power installations, fueled a “gold rush” of solar installations in Massachusetts, Ohio, Maryland, Pennsylvania, and New Jersey. The self-correcting incentive programs could put the brakes on future US solar market growth expectations, warns PHOTON Consulting, in “End of the Gold Rush: Crash of U.S. SREC Markets?”

SREC supply is higher than what utilities are required to buy, PHOTON Consulting found. This means that many homeowners and businesses that took part in the rush to install solar power may not get the paybacks they anticipated, a situation already occuring in New Jersey and Pennsylvania.

“Move cautiously” is PHOTON Consulting consultant and study co-author, Chris Bolman’s advice to solar suppliers, developers, installers, customers and financiers searching out high returns in US installations. “Project risk appetite, SG&A and expansion plans” are tenuous, changing landscapes in the Mid-Atlantic and Northeast. “Imminent IRR risk in several of the country’s largest solar segments doesn’t quite support the straight-shot growth story a lot of market participants are looking for in US solar,” Bolman adds

“End of the Gold Rush” details trends, market segmentation, customer economics and outlooks for key US state SREC markets, including SREC prices, supply and demand from 2010 to 2014. To view the executive summary, table of contents and purchase PHOTON Consulting’s 2011 U.S. SREC market report, please visit http://www.photonconsulting.com/srec11. PHOTON Consulting is a dedicated solar energy research consultancy providing in-depth research, management and strategic consulting services specific to the PV sector.

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