As the solar energy industry continues to expand globally, there will continue to be ways to streamline the process for customers who wish to make the switch to clean energy. As it stands, processes like permitting, inspections, and grid interconnection varies widely based on where you live. For example, in Albuquerque and Rio Rancho solar permitting is currently automated through email and can take a shorter time than it does in Santa Fe where permitting is done by hard copy. In Rio Rancho, permits for solar installations cannot be pulled until the utility screening is complete but in Bernalillo County (less than 20 miles away), you can apply for a permit at any time through the online application. The biggest argument for streamlining these sorts of processes nationally is the cost involved.
Hard Costs vs. Soft Costs
In the solar energy industry--as with most construction-- there are hard costs and soft costs involved with a solar energy project. The hard costs include things like labor, solar panels, racking, electrical wiring, inverter, and energy storage when applicable. The soft costs include customer acquisition costs like marketing, and costs in the process of getting the solar installed including permitting, inspections, and interconnection to the grid. Whether you choose to DIY your solar energy system (we don’t recommend this) or purchase one from a solar company, you will be faced with the soft costs of permitting and inspection in the process of installation. With soft costs accounting for one-third of your installation costs, the expenses they create have been recognized by the Department of Energy, solar industry organizations, as well as local governments throughout the country, and some states are finding ways to streamline the process, mitigating soft costs along the way.
The processes within solar adoption vary considerably across the 18,000 local jurisdictions and over 3,000 utilities spread out among the 50 states. Because of the market variations across jurisdictions, and the different processes based on your utilities, the same solar energy equipment can cost more depending on where you live. Other countries have taken note of soft costs within their solar adoption processes and worked to remedy the issue. Take Australia for example; solar is roughly one-third the price of the same system in the United States based on gross cost per watt. One reason why is because Australia has simplified the permitting and inspection process for installing solar, including the use of virtual permitting. While Australia’s fast-track permitting has proven successful at cutting time and costs, a lack of regulatory oversight on procurement and installation has resulted in lower quality installations and higher warranty issues. In contrast, solar energy systems currently being installed by Positive Energy have a 30-year warranty and have seen very few issues over our 24 years in business. These differences illustrate the importance of finding a balance between quicker processing and quality installation.
This also points to why we shouldn’t just do away with permitting altogether to save money on soft costs. Steps like permitting and inspection are extremely valuable when it comes to consumer protection as they ensure that your solar array is safe structurally as well as electrically sound.
Process Improvements Underway
While we need these processes in place to keep consumers and their homes safe, we can standardize our permitting processes nationally to streamline solar adoption and likely increase those interested in switching to this clean and reliable energy source. Fortunately, there are measures in place that are taking us in this direction. The National Renewable Energy Laboratory (NREL) developed an online solar permitting platform called Solar Automated Permit Processing Plus, also known as SolarAPP+. This resource enables permits for residential solar to be obtained almost instantaneously. Officials within NREL plan to continue working on the app to allow expediting of permits for energy storage systems as well. Jurisdictions must first choose to fully adopt SolarAPP+ for permits to be automatically approved. San Jose California saw a six-fold increase in solar adoption after utilizing SolarAPP+. Pima County, Arizona has been able to process as many as 250 applications a month using the app.
In 2011 the US Department of Energy launched the SunShot Initiative. SunShot was designed to make solar technology cost-competitive with our traditional, fossil-fuel-based energy sources through collaboration with state and local governments and improving the processes of going solar. Its original goal was to reduce the total cost for utility-scale solar to six cents per kilowatt-hour by 2020. It met this goal by 2017. By 2030, the SunShot initiative hopes to reduce the cost of utility-scale solar to just three cents per kilowatt-hour and reduce utility-scale project timelines.
Some states are taking action by way of legislation. Colorado has placed a cap on building permit fees. Local governments are required to charge the lesser of a flat rate for permits on any system smaller than 2 MW. For any system larger than 2MW, they cannot charge a fee greater than the cost of issuing the permit. Connecticut has authorized cities to waive any building permit fee for clean energy projects. Arizona enacted legislation that allows jurisdictions to waive the requirement for a professional engineer’s stamp to approve solar installations, cutting time, and red tape. Las Vegas, Nevada expedited their permitting process through a virtual portal and slashed permitting time from months to minutes. In just 11 months the city wound up installing more than four times the number of solar projects they had installed the previous year.
These are a handful of avenues being taken to improve the process and soft costs associated with solar. There is a lot more work to be done to make solar more accessible to all, but we’ve come a long way. If you have questions about acquiring solar energy, we’re here to help! Positive Energy Solar is a full-service solar integrator and can handle every step of the process from permitting to commissioning. Contact us today on our website or give us a call at 505.344.0071.