Recently, I read an article on cleanenergyauthority.com that described the recent upswing of interest in residential solar power as a “gold rush.”
To be fair, the article was commenting on a report published by Photon Consulting, titled “End of the Gold Rush: Crash of U.S. SREC Markets?” There, the commentators opined that, as the solar renewable energy credits that fueled solar energy growth dry up, we could see market crashes in the solar industry, which would result in losses to homeowners and businesses who installed solar panels in the past few years.
Several states will be most affected, according to the report:
“[The credits] 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.”
The study’s authors commented that the report is not meant to scare consumers, but merely to provide a tool to examine future markets in solar power, particularly systems that have been constructed with solar renewable energy credits (SREC). The issue is not that SRECs may be reduced or eliminated, but the uncertainty surrounding the credits in the future. As a result, market and pricing estimations for solar panels are unpredictable, leaving some unwilling to take the risk.
In general, Renewable Energy Portfolio standards, require utilities to obtain a certain percentage of their power from renewable sources. These standards have both driven demand for clean energy and the credit programs for continued growth. The problem is that the supply of renewable energy is catching up to demand, and the purpose for the credits – and the credits themselves – are slipping away.
In some states, like new Jersey, the change in SREC is already having an affect on solar power demand. However, before you change your mind about renewable energy systems for your home or business, keep in mind that there are a lot of factors in play which could actually result in another increase in SRECs and associated demand for solar.
In short, investing in solar power is much like investing in the stock market. There are no guarantees, and factors over which you have no control could dramatically increase or decrease the value of your investment.
Keep in mind, however, that reduction of CO2 emissions with solar installations is a long-term investment that will benefit the planet as a whole, including your family and future generations!