The Little Solar Guys May Lose in the Long Run

A New York Times article today outlines the growing pains of the nation's solar market. When states, such as New Jersey and California, offer solar rebates they find that the rebate program lags too far behind to satisfy customers, the State, and small installers.

New Jersey's answer is to phase out the rebate program in favor of an energy credit market. Larger companies would gain a distinct advantage and would force smaller companies out of business merely because of their size and access to capital. They can purchase energy credits and/or gain credits through new installations. Small companies will be squeezed out of this market because of their lack of working capital.

Large companies are already working with customers through power purchase agreements. These agreements give customers lower rates on electricity and the installation company finances and owns the equipment.

The agreements are a good plan for many residential customers and they will become more commonplace in years to come. Energy credit markets are also inevitable. The question remains: do we allow the small installers to survive in spite of these initiatives or are they fallout from the solar industry's growing pains?