Charticle: Local Permitting Makes a Bigger Difference as Solar Gets Cheap

John Farrell via Institute for Local Self-Reliance

Going solar keeps getting cheaper, but most of the cost savings have come from less expensive solar panels. “Soft costs,” like permitting and inspections, are a rising share of the cost of a solar installation. Several years ago, these permits could increase the cost of a residential solar project (then around $8.00 per Watt) by 5-10% , highlighted in a 2010 study by Sunrun. But as solar gets cheaper, permitting is going to be a much bigger problem.

recent analysis by Lawrence Berkeley Labs [pdf] illustrates the benefits of streamlining solar permitting rules: it can cut the cost of a 2011 residential solar project (at $6.00 per Watt) by 5-13%, today’s (at $4.00 per Watt) by 8-19%, and tomorrow’s by as much as 40%!

The report confirms the earlier Sunrun study with a statistical analysis of actual solar permitting rules and the impact on final installation costs. It also lends credence to streamlined permitting schemes (like Vermont‘s) and to the broader efforts to improve solar permitting, like Vote Solar’s Project Permit.



7 Responses to Charticle: Local Permitting Makes a Bigger Difference as Solar Gets Cheap

  1. Mike Roddy says:

    Yeah, we need a standard here. The solar industry, if they haven’t already, needs to approach ICC and inspectors’ trade groups to streamline permits. Putting in standard electric lines is easy, with the main costs being for the meter and normal inspections (which are cheap), so the red tape has the effect of punishing solar.

  2. Dano says:

    The solar industry, if they haven’t already, needs to approach ICC and inspectors’ trade groups to streamline permits

    They already have. In Colo on the Front Range, several cities have streamlined permitting. It is the regs at the city level that drive the costs – mostly borne by solar company staff hours.



  3. Photon says:

    It’s interconnection, as well. Many utilities still utilize snail-mail delivered documents, first a signed application, then a dually signed agreement (following a pass by local inspection), and in the case of wires-only grids, this whole package has to be sent to the REP to finalize the buyback policy, to get credit for the energy being produced. It’s tortuous, and every utility has its own forms and process. In Germany, this can all be done online in about 5 minutes.

  4. Michael Glass says:

    What is most discouraging is that estimate of $4 per watt of nameplate capacity.

    Here in Northwest Indiana 1 watt of capacity produces about 1.1 kwh per year. Using net metering and a current price of about 11 cents per kwh that means it pays back in nominally a bit over 30 years.

    The interest payments alone on a $4000 loan will be more than $120 per year, so including the cost of money the payback time is never.

    And this is after years of ballyhoo about the dramatically decreaing cost of PV, how it has achieved grid parity in some places, and yadda yadda.

    About twice per year I go searching around on the net to find out how much a 1 or 2 kW solar installation would cost. It isn’t easy to find out, but $4/watt seems to be about correct. And way too high.

  5. Mark Shapiro says:

    Lower permitting cost also lowers the time it takes to install. In Germany, installation can happen one week after the order, compared to months here.

    Two more innovations would help drive rooftop PV growth:

    1) Time of day pricing, to capture the higher value of mid-day, mid-summer peak PV generations;

    2) Standardized, simplified connection to our electronic devices, which are the highest value and all of which run on low voltage direct current — precisely what comes out of PV and batteries.

    Ooops! Both of these exist! Many Chicagoans have real-time pricing with Com-Ed, and many devices can be charged via USB.

  6. Mark Shapiro says:

    Important points, so see below. Also, remember that the 11 cents per KWh is only the starting point for calculating of the full value of PV.

    Avoiding coal (and gas) mining and burning is extraordinarily valuable. But by all means let’s get better at installing it AND using it.

  7. Michael Glass says:

    Yes, there is value in saving GHG. My egrid region, RFCW, (which includes Chicago) emits about 3/4 ton of CO2 per Mwh.

    So a $4k investment would save about 3/4 ton of carbon dioxide per year, assuming it entirely displaced electricity from the grid. Which it won’t. It still seems expensive to me.