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Couple of things on the wand of scorching ray. First, it's a ranged touch attack for each ray, so he's got to hit twice. Even if both rays are targeting the same opponent, he still rolls twice. His BAB isn't that great, so it should miss at least once, reasonably often. Perhaps use monsters who get some AC from Dex; even AC 13 should result in a decent percentage of misses. Second: cost. The 2nd ray means it's CL 7, so each time he uses it, he's burning SL 2 x CL 7 x 15 gp...210 gp. If he's using it off-hand, then double that. (But I assume he's using the MM wand off-hand, as it's way cheaper.) That wand cost him 10K, or 5K if he built it himself, so he should be getting some nice perks from it. That's a big chunk of his gear investment...and it's being consumed. DON'T give him extra cash because he's running through the charges, and therefore seemingly has lower gear value.

Also, note that each ray is a separate source of fire damage, so fire resistance 5 knocks the damage down by 1/3, because it applies to each hit separately.

Down the line, wands become much weaker. Wands of scorching ray are probably the most powerful of the offensive wands, because they give impressive damage for moderate cost. But in a couple levels, with monster touch AC and hit points being a bit higher, it'll be much less effective. OK, he can go to the 3-ray version, but that's CL 11...each charge is now 330 gp. (And he needs to roll to hit 3 times.) Look at the average treasure per encounter: if he's using it once every encounter, then he's probably *spending* more than he's getting, or is at least spending a significant fraction thereof.

And with any higher-level spell, things get worse. At 10th or 11th level, he's got spells to do the same damage, that don't cost a ton to use.

It's not clear whether the setup with wands is broken, and that X/day is better, or whether the issues are external. One point we know: the formulaic prices have serious issues. The ultimate expression of this is wands of CLW...750 gp for 50d8 healing. CHEAP, and useful for *any* party level. Scorching Ray has the issue of doing *serious* damage within 1 round, over a very impressive range of levels. And, it doesn't suffer from a major flaw common to low-level spells: the save DC becomes too easy. In a wand, it's still only SL 2, so it won't get too expensive even at higher caster levels. Finally, there's the huge general issue that casters with item creation feats, can wreak *havoc* with total gear value, especially with 3.5 XP awards...if he spends 1000 xp on making items for himself and others, then there will be a short-ish period where he's 1 level behind the party. In that window, under 3.5, the DM's told to give him about 1/3 more experience...I don't have a DMG at hand (and that information's not in the SRD), but he'll make up quite a bit of that difference right there. So the party may have far more gear than the designers anticipate.

As a sidebar: you also almost certainly have to increase the party's effective CR, given that they're getting a feat every level. I haven't run/played in a situation like this, so those who have can speak more accurately, but it feels like you want to increase the effective party CR by 1 right now, AND, possibly, run the monsters 'enhanced.' That is: assuming d8 hit dice, give them 6 hp per, not 4.5 (before Con of course). Bump their key stats up a bit...even 2 points each on Str, Dex, and Con will help. You might not want to both increase the average hit points per die, AND increase the Con, but see how it goes. Or if you don't want to tweak the monsters, add some. For an EL 7 encounter, make it a CR 7 monster AND a CR 5 or 6 monster. The 2nd critter doesn't increase the EL, it compensates for the players' additional power (because of the additional feats.)