Solar permitting project sees red and awards gold stars

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Permitting for residential systems in the US can be a headache for installers and result in additional and unnecessary costs and delays for solar customers.

In the US, solar permits for rooftop systems are handed out by 18,000 municipalities – and no two of them are the same.

Local governments can turn themselves into solar champions by cutting through the permitting red tape, say policy advocates Vote Solar, which has just launched a website that grades municipal solar permitting practices.

Galen Barbose, an engineering associate in the electricity markets and policy group at Lawrence Berkeley National Laboratory, said that permitting, inspection and interconnection (PII) contributed 24 cents per watt of the US$1.52 in soft costs on a system priced at US$5.21. The comparative cost in Germany is three cents per watt.

Most of these additional costs were for the labour associated with the permitting process – around 15-25 hours, he said. These labour costs can add up to US$2,516 to system costs, according to Sunrun's 2011 report http://www.sunrunhome.com/solar-lease/cost-of-solar/local-permitting/

Last year, Clean Power Finance released another report, which found that more than one in three installers avoid selling solar in an average of 3.5 areas because of associated permitting difficulties. It also found that permitting usually involves two (sometimes up to five) distinct agencies, each with different processes.

“Many installers simply avoid doing business in certain areas because of the challenges in the permitting environment,” said Barbose. “That can further serve to increase costs in the area by limiting the pool of installers serving the region and dampening the kinds of competitive forces that can drive efficiencies and costs reductions.”

Using the data, CPF launched its own National Solar Permitting Database (NSPD), a crowd-sourced online database of permitting requirements from across the US funded with a US$3 million grant from the Department of Energy's SunShot Initiative. http://solarpermit.org/

Barbose's colleagues at Lawrence Berkeley, Ryan Wiser and Changgui Dong, also found that cities with the highest scores for permitting for residential PV also had lower average system prices – from US$0.27/W to US$0.77/W cheaper.

Declines in PV module prices leave little room for further cost cutting and soft costs are the increasing target for reductions, said Barbose.

“We've just about sapped all the cost reductions we can from the module side,” he said. “So if we're to continue driving significant cost reductions at the system level – and that may well be necessary as incentives dry up – then those cost reductions are going to need to come from the soft costs side. Permitting related costs specifically are an important piece of this soft costs pie and are perhaps one of the elements that can be most easily isolated and addressed through policy effort and other organised initiatives.”

Annie Lappe, solar policy director at Vote Solar, said that consistency in US permitting requires adoption of best practices.

Vote Solar, along with the Interstate Renewable Energy Council, has been working to develop a set of nine benchmarks:

1) Post requirements online with a checklist;

2) Expedite permitting process for the bulk of simple systems;

3) Online submission of applications;

4) No more than one trip to the permit office;

5) A flat fee no more than $400;

6) No community specific licence requirements;

7) Reduced inspection times;

8) Only one inspection;

9) Permitting staff trained in solar.

Sky Stanfield of IREC, who helped developed the standards, said that Honolulu had seen a sudden increase to 17,000 residential applications in one year. The legislature had implemented a permit fee waiver, but the solar community ended up wanting to pay fees to make the process efficient.

“This conversation about permitting reform shouldn't be one-sided, the driving force behind the discussion is the desire to bring down the cost of solar down for residents,” she said.

“As solar grows in popularity, local governments are likely to see a really significant uptick in the amount of applications they have to process. Reforms to permitting are good for installers and customers but also essential for the municipality to handle the workload that is coming with the success of solar.”

Most municipalities were under-resourced, particularly in recent years, and they should be adequately compensated for their time in processing permits, she said.

“We don't want a free ride for solar but to fairly compensate the jurisdiction. Some jurisdictions have adopted fee waivers and we support and encourage jurisdictions to do so when they can afford to do so. There are political motivations driving that. We believe that there are economic benefits associated with solar – a fee waiver may also increase those benefits.

“However, I believe it's reasonable to compensate jurisdictions for the role that they do play. And for that reason, we're not promoting fee waivers. Most jurisdictions in the US are cash strapped and in order for them to have the staff and resources available to efficiently process permits there have to be some resources available to pay for that staff.”

She also said that the municipalities performed a vital function as the “final safety and reliability checks” for solar systems.

“[That] is the paramount issue here; we don't want to undermine the safety of the systems and we really rely on the important work in providing that safety check.”

Project Permit's focus for now is on residential systems because of the sheer volume of applications pouring into municipal authority offices in the United States.

But it is hoped that those learnings can be taken into the commercial sector, said Lappé.

“If we tackle this one first we're hoping the efficiencies you gain from best practices turn into efficiencies for other [segments],” she said.

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