One of the problems that have slowed deployment of residential rooftop PVs in the United States is the permitting process. The nation is made up of 50 states, which in turn have individual counties and cities. Across the U.S. there are more than 18,000 local jurisdictions with their own PV permitting requirements, land use codes, and zoning ordinances; more than 5,000 utilities that are implementing standards for connecting and selling energy back to the energy grid; and all 50 states are developing their own connection standards and processes for supplying and pricing energy sold back to the grid, according to the DOE.
The “soft costs” of local permitting - not associated with the cost of the PV panels, mounting hardware or the electronics - is the most stubborn problem that residential solar faces in the U.S., according to a January 2011 report from the solar power company SunRun, which notes that the local permitting and inspection process alone adds more than $2,500 per residential installation nationwide.
“While solar equipment prices are falling, the total installed cost of residential solar is falling more slowly because of inefficient local permitting and inspection processes. It is appropriate and necessary for the Department of Energy to address this problem because DOE has already built the tools to quickly streamline local permitting and inspection processes without sacrificing safety,” noted the report.
To deal with this issue, U.S. Department of Energy announced on December 1, 2011, $12 million in new funding for the “Rooftop Solar Challenge,” a project that designates 22 teams to “implement step-by-step actions throughout the next year to standardize solar permitting processes, update planning and zoning codes, improve standards for connecting solar power to the electric grid, and increase access to financing.”
The DOE had released a description of the eligibility requirements and application instructions back in June 2011 as part of the government’s SunShot Initiative to “make solar energy more accessible and affordable, increase domestic solar deployment, and position the U.S. as a leader in the rapidly-growing global solar market.” Now that new funding has been released, ranging from $250,000 to $1 million per team.
U.S. Permitting Costs
The January 2011 SunRun report, The Impact of Local Permitting on the Cost of Solar Power, notes that “local permitting and inspection add $0.50 per watt, or $2,516 per residential install.” The reasons for this include: wide variations in the permit process, most of which do not improve safety; excessive permit fees; and, a “slow, manual submittal and inspection processes.”
“Permitting costs are equivalent to a $1 billion tax on solar over the next five years, and make it hard for installers to achieve any economies of scale. Countries like Germany and Japan have eliminated permitting for residential solar, handicapping the U.S. despite our superior solar resources,” concludes the report.
The DOE acknowledges that a major obstacle for homeowners and developers looking to invest in solar energy is navigating the differing and expensive administrative processes of various towns, cities, and counties across the nation, and securing financing for those projects. With the Rooftop Solar Challenge, the DOE hopes to standardize the process.
The “Rooftop Solar Challenge”
The $12-million DOE funding for the awardees of the Rooftop Solar Challenge supports 22 regional teams to “spur solar power deployment by cutting red tape - streamlining and standardizing permitting, zoning, metering, and connection processes - and improving finance options to reduce barriers and lower costs for residential and small commercial rooftop solar systems.”
The 22 teams are made up of city, county, and state officials; regulatory entities; private industry; universities; local utilities; and other regional stakeholders to establish models for other communities across the country. Those teams are based in: Arizona, Florida (Southeastern), California (2 Bay Area teams and 1 in Southern California), Pennsylvania (Southwestern), Chicago, Texas, New York City, Connecticut, Colorado, West Virginia, Massachusetts, Kansas/Missouri, Wisconsin, Minnesota, Nevada, Puerto Rico, Utah, Tennessee, Washington State, and a Southwest Regional Project involving California (Central Valley), Utah (Northern), Colorado (Denver Metro), and Nevada.
In total, the projects will cover more than 51 million potential solar users and each team will implement step-by-step actions to standardize the permit processes, update planning and zoning codes, improve standards for connecting solar power to the electric grid, and increase access to financing. For example:
- The team led by City University of New York aims to shorten New York City’s approval process from one year to 100 days by creating an online multi-agency portal.
- The Broward County, Florida team plans to remove local ordinances that create obstacles to solar installations and create a unified online system for permitting and interconnection to reduce costs and wait time.
- The Massachusetts team plans to use five pilot communities to determine “best practices” that can be replicated, as well as remove financing hurdles for homeowners.
Since California passed its “Million Solar Roof Initiative” in 2006, the state has installed more than 1 gigawatts of rooftop solar power.
Because permitting and other processes in the U.S. are so complicated and vary from jurisdiction to jurisdiction, in order to make residential solar energy competitive with other types of energy, it will be critical to reduce these barriers.
The Rooftop Solar Challenge teams have been given an opportunity to implement their different step-by-step approaches throughout the next year to standardize permit processes, update planning and zoning codes, improve standards for connecting solar power to the electric grid, and increase access to financing – a move suggested nearly a year ago. The January 2011 SunRun report had recommended the DOE launch a “Residential Solar Permitting Initiative” and DOE responded with the “Rooftop Solar Challenge.”
That report also suggested that standardizing local permitting will transform residential solar, as well as:
- Bring the cost of solar to grid parity for 50 percent of American homes by 2013
- Close Germany’s 40 percent cost advantage
- Deliver the equivalent of a new $1 billion solar subsidy over five years
Back on June 1, 2011, when Secretary Chu first announced that the “Rooftop Challenge” funding would be soon available, he said: "These investments under the SunShot program can help to transform the solar energy industry by addressing significant challenges to solar energy deployment, including permitting and installation.”
Secretary Chu also noted that "Innovations in IT and local business processes, such as online permit applications, can deliver significant savings for solar energy systems and will help America to compete globally in this growing market."
But that was in June 2011, long before the U.S.-China riff over solar panel subsidies or the political backlash in the U.S. from the bankruptcy of PV maker Solyndra.
Secretary Steven Chu, who was awarded the Nobel Prize in Physics in 1997, delivered this year’s Konrad Bloch Lecture at Harvard University on the same day that the “Rooftop Solar Challenge” funding awards were announced. During his lecture, The Role of Science, Technology and Innovation in solving the Energy Challenge, Chu said the economic benefits of the emerging clean-energy industry will be reaped elsewhere if the business is not encouraged in the U.S. first.
“Invented in America but made in China is not good enough,” Chu said. “Invented in America, made in America has to be the way to go.”
During the speech, Chu noted that analysts are certain the costs of PV panels will continue to drop over the coming decade, though they disagree whether they’ll fall by a factor of two or four. If they decline by a factor of four, PV panels will become competitive with energy produced by all other fuels in the U.S.
Chu also noted the global recession hit the solar energy industry hard, decreasing demand that in turn has lowered prices for solar products. While the bankruptcy of California-based Solyndra dominated headlines, the global difficulties of the solar industry have not gotten as much attention. Chinese solar panel makers have also been hard hit, Chu said, but they have been protected by the Chinese government to keep the industry there afloat.
Ironically, while the U.S politicians continue to squabble over U.S. government support of its own solar energy development, it will continue to be PV panels made in China and elsewhere that the “Rooftop Solar Challenge” is paving the way for wider deployment.