The Soft Costs of Solar 0

While module prices plummet, the soft (non-hardware) costs of installing solar systems remain a stubborn barrier to affordability. The difference between the U.S. $4.44 per watt average installed cost for a typical residential rooftop system and the $2.24 per watt figure for comparable German systems, GTM recently reported, is in soft costs like customer acquisition, permitting, inspection and interconnection.

MEMC (NYSE:WFR) CEO Ahmad Chatila noted recently that the paperwork for permitting in Germany requires two pages, while U.S. permitting can require two trees’ worth of paper.

Red tape is also the likely culprit responsible for putting average U.S. system installation time at 75 days versus 7.5 days in Germany.

A solar installer in one Southern California city can take a set of plans to the proper authority and get a permit to build within 48 hours, Paramount Solar VP and twelve-year solar industry veteran Todd Lindstrom recently said. But in a virtually indistinguishable city of the same size that is immediately adjacent, “If I get it done in under three weeks, it’s a miracle.”

NREL Solar Analyst Kristen Ardani and VoteSolar’s Adam Browning previewed a forthcoming U.S. soft cost update from NREL and LBNL researchers. The final data will be published by the U.S. Department of Energy (DOE) later this month. And DOE’s SunShot program opened a new $10 million competition in September for “innovative, sustainable, and verifiable business practices that reduce these soft costs to $1 per watt.”

GTM asked Ardani and Browning for their observations on the two main industry-wide efforts underway to attack the complexities of permitting, inspection and interconnection that have U.S. installers tangled up in red.

One approach, led by third-party-finance leader Clean Power Finance (CPF), would create a national permitting database. The other, the Solar Freedom Now (SFN) movement co-founded by industry pioneer Barry Cinnamon, would gather political momentum to drive Congress to standardize procedures at the federal level.

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