Homeowners in Maryland have several reasons to be optimistic about residential solar costs over the next year or two, as the state yet again ramps up its efforts to make PV more affordable. From our perspective, two state incentive programs – the Clean Energy Grant Program and the SREC market – offer an opportunity to look at the dynamics of the developing solar leasing market as it confronts the patchwork of incentives found on the state and federal levels.
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As a quick recap, the state’s grant program has provided over $1m in funding for 336 residential PV systems, with 112 more applications received but pending grant approval. Nearly all of those systems were leased, with sums nearing $600,000 already awarded to solar leasing giant SolarCity alone. Other companies offering solar financing have also been applying for large chunks of the pie to sweeten the pitch to their customers. The window for non-leased systems to procure funds, which are funneled ARRA funds through the states energy department, closes on March 15th.
Equally exciting, however, is the move to strengthen the SREC market, which as I’ve written about recently, leans toward the self-ownership model over third-party financing. Given that Maryland has to date one of the most stable SREC markets in the country in terms of pricing, it’s a bold, if anticipatory move to strengthen the market by increasing quota requirements, and thus market demand over the next two years. Particularly relevant to homeowners that would prefer to buy instead of lease is what these changes, if implemented, would have on predicted payback period. In short, the Maryland solar PV market added capacity at a steady, predictable rate that matched the market demand nicely, preventing an oversupply and corresponding plummet in prices.
But with a few large solar farms scheduled to come online in 2012 and 2013, sellers (residential PV owners especially) and state officials are looking for ways to stymie the predicted glut in the SREC market. The state House chamber is currently reviewing a bill to increase the demand over the next two years, but keep the long-term requirements and cost-control mechanisms in place. The end message for the prospective residential solar customer: don’t rush to lease just yet, the SREC market could offer an attractive solution to paying off your system! Find out what installers are suggesting today, or just check out the latest updates from industry leaders!