The amount of solar power U.S. homeowners install could shrink 13% this year, as forecast by the trade group Solar Energy Industries Association and consulting firm Wood Mackenzie. More than a hundred solar contractors have already gone out of business during the past year as demand dried up, according to data tracked by Solar Insure, a company that monitors residential solar installations and helps fix problems.

The state has installed so many panels that it has a glut of solar power during the day. Last year, California implemented new rules that cut the amount of compensation most rooftop solar owners get for the electricity they send to the grid by 75% or more to manage the oversupply and soaring costs for upgrading the grid.

“It was like getting a gut punch,” says Carlos Beccar, marketing director of Fresno-based Energy Concepts, a solar installer that had to lay off more than half its 75 employees after sales plummeted as much as 90% following the new rules.

California’s solar growth is outpacing the ability of its grid to handle it. The state already supplies more than a third of its power with renewables, and it plans to raise that ratio to 60% by 2030. But because the state’s grid can’t absorb all the solar power generated during the day, it ends up throwing increasing amounts of it away or curtailing it.

When David Phippen, a third-generation almond grower in central California, first installed solar panels in 2009 to help power equipment on his farm, he recalls thinking it was “the best thing since canned beer.”

Under the old solar-compensation rules, the economics worked out. But now that those payments will be slashed, adding more solar no longer makes sense, says Phippen—even though he has more equipment and bigger electricity needs.

“We’re done with our green march,” he says.