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Cost of Permitting is a Simple Key to Solar Price Parity

Bill Roth | Monday January 24th, 2011 | 2 Comments

Can you guess which of the following actions would make roof top solar affordable for 50% of Americans at zero additional cost to ratepayers or taxpayers? Is it:

  • Higher Solar Subsidies
  • Pricing CO2 Emissions
  • Standardizing Local Solar Installation Permitting Rules?

A just released study entitled The Impact of Local Permitting on the Cost of Solar Power
concluded:

Local permitting and inspection add $0.50 per watt, or $2,516 per residential installation.

The wide variations in permitting processes do not improve safety.

Permitting costs are equivalent to a $1 billion tax on solar over the next five years making it harder for installers to achieve economies of scale that can be used to push solar power to price parity with utility supplied power.

The question is why?

The key issues of permitting are:

  1. safety in terms of preventing electrical back-feeds that could harm a utility worker
  2. structural integrity and
  3. sound electrical safety practices that protect against fire and human harm.

Today’s solar systems deploy technologies that prevent back-feeds. The numbers of solar installations, plus the adoption of engineering/construction best practices learned from these installations, are now well understood by the industry and most structural engineers. And these systems are now almost universally pre-wired for simplicity in installation and compliance with electrical code.

So why is permitting of roof top solar power treated by local jurisdictions like a newfangled experiment that requires additional attention and paper documentation? Today, in local jurisdiction after jurisdiction, installers have to research each jurisdiction’s codes, pay for customized drawings and apply for zoning approval every time they do an installation. In many instances the local jurisdiction will require a solar installer to pay for the additional cost of having a professional engineer review and certify installation plans even when similar plans were previously approved. Is this level of attention on roof top solar installations merited for an installation that may be easier than connecting a surround sound flat screen TV system with the Internet and cable?

A related issue is the massive amounts of paperwork often required by the local utility and state regulatory commission. Given recent natural gas line explosions on both coasts it would appear utility and regulatory attention should be less intense on solar power and more so on fossil fuels that require high pressures, combustion and environmental emissions for their successful operation. Is this heavy attention on solar an example of a legacy bureaucracy system that today has exceeded its value? When roof top solar systems were first being installed and we were moving up the learning curve then having this extensive of a review and permitting process could be rationalized as a way to insure installation alignment with utility standards and to certify that the solar power systems were generating the levels of electricity that justified commission allocated subsidies. But with the standardization of best practices in solar system construction/installation and the 10-20 years of performance certification on actual operating system the question must be raised on whether the cost for continuing this level of documentation is still justified?

And here is where it really gets frustrating. DOE already has in place a process for implementing a streamlined permitting path. DOE has already funded development of uniform permitting standards through Solar ABCs6 to allow jurisdictions to streamline permitting for most installations while still following the codes and maintaining human safety.

What is the dollar value of streamlining this documentation process? The clearest example is that Germany has a 40% lower cost of installation just based upon the difference in their national permitting process vs. America’s local permitting process. Eliminating this cost difference is equal to giving the solar industry a $1 billion cost subsidy over 5 years!

Here’s a list of what we are talking about:

  1. Today, to begin the inspection process a human being has to physically deliver a paper application for installation at a local jurisdiction office. Really, with the Internet, email and mobile apps, is it still necessary to pay the cost measured in time, money, fuel and emissions to hand-deliver paperwork that could be delivered via digitally at almost no cost?
  2. Too often local jurisdictions size installation and inspection fees to generate a source of local government revenue than to reflect the cost/value of the permitting process. Talk about shooting the community in the foot, what is the logic of imposing high fees on a project that will create local jobs, enhance local property values and improve the local environment? If I were looking for ways to spark my community’s economic development and enhance its environmental quality then what about making the permitting process for solar free?
  3. Are detailed and often multiple field inspections necessary for today’s solar systems that come pre-wired for compliance with both electrical building codes and utility interconnection procedures? This onsite inspection process involves costs like scheduling an inspection, waiting for inspectors with a crew on site and then rescheduling inspections if the inspector does not show up due to a scheduling delay or conflict. And in too many jurisdictions inspections are required in process meaning multiple complexity in scheduling and added construction costs tied to waiting for inspection. Another cost is the frustration of the solar customer who questions the installer on why the installation is taking so long.

Can reducing permitting paperwork work in America?
It does in cities like San Jose, Portland and Philadelphia. San Jose is benefiting from having installed solar systems that are meaningfully lower in cost than compared to surrounding cities.

More importantly, a national policy for enabling solar by streamlining costs rather than handing out cash subsidies holds the very real promise of solar power installations costing $3.50 per watt. That is what Germany has achieved! And the value created at this threshold price point is price competitiveness with utility electricity supplied from fossil fuels. For about half of America, achieving $3.50 per watt roof top solar power installations would be at price parity with utility supplied power. Such a result would be a win for consumers and for the local community in terms of jobs and environmental quality.

So the question is why not streamline the permitting process? That’s a very good question you should ask your local elected official if you are looking for price stability at your meter, jobs for your community and a cleaner environment.

Bill Roth is the founder of Earth 2017 and author of The Secret Green Sauce that profiles best practices of actual companies growing green revenues. Visit Earth 2017 TV to view video interviews with CEOs of America’s leading solar companies talking about this issue and the economics of solar power.


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  • http://www.facebook.com/people/Michelle-Gabriel/604579026 Michelle Gabriel

    The link takes you to the SunRun page but not to the report. This is the link to the report: http://www.sunrunhome.com/cost-of-solar/solar-panels/local-permitting

    • http://www.earth2017.com Bill Roth

      Thanks Michelle! Sorry 3P followers, don’t know how that one occurred. Bill