While many mid-sized companies had modest gains in 2011, many will not have the tax liability moving into 2012 to take advantage of the investment tax credit. This will restrict the market’s ability to leverage private sector capital to finance projects. The industry is going to need new sources to emerge to meet the market’s demand for project finance when it comes to tax equity.

“Take a look at the Fortune 500 companies in the U.S.,” said Jamie Hahn, co-founder and managing director of Solis Partners in Manasquan, N.J.,. “Their tax liability in 2010 was one hundred and thirty eight billion. I believe we¹re going to see more large-scale corporate Americas and savvy investors like Warren Buffet that understand solar is a sound investment, not only from a return perspective, but from a tax efficiency perspective—to be able to overcome this tax equity short fall.”

There is significant capital sitting on the sidelines today, yet much of it is not ready to invest in New Jersey due the high level of uncertainty in the marketplace today.

“Legislation that didn’t pass through the lame duck session added to this uncertainty,” said Hahn. “I understand why it didn’t pass, yet I’m confident we’ll get something done in Trenton to address the overbuild scenario we are currently facing.”

Various industry groups continued to add unreasonable measures on to A-2371. It became excessive and was blocked.

This legislative glitch has sent SRECs on a further slide, now around $200 and expected to hit $150.00 or below. Unfortunately this just continues to add to the uncertainly and does not instill the confidence necessary in the investment community.

At the end of the day, the New Jersey solar industry needs stable policy on which to make business decisions.

Photo: Andrew Maiman/Flickr