By Yann Brandt and Mike Casey
Over 12 million Americans are unemployed. Nearly 100,000 businesses have shut for good. It’s hard to find a city or county in America that isn’t facing yawning revenue gaps and painful budget choices. And economists expressed alarm when the U.S. economy only added 245,000 jobs in November, making for the slowest job growth since the spring.
Putting the economic pieces back together was central to President-elect Joe Biden’s “Build Back Better” campaign. To begin fulfilling that promise, there’s an immediate, non-partisan opportunity on the President-elect’s doorstep. More than 50 million single family homeowners want to put solar on the roof of their homes. The Biden Administration can work with officials to make homeowner action easier.
The soft cost barrier
Standing in the way, however, is the reality that one-third of solar installation costs result from “soft costs.” Those include costs installers have to pass on to consumers for getting local governments to permit an installation to start, then inspecting the completed work. For an average solar home installation cost of $11-15K, soft costs represent roughly $6-7K. For most family budgets, that’s real money.
The good news, however, comes on several fronts.
● Local elected officials who control local permitting and inspection standards also need their voters to see them taking concrete steps to create jobs.
● Unlike other construction trades, solar is modular and standardized. It’s also heavily based on national code writing.
● The pandemic has widely socialized and advanced uses of virtual technologies. Many will endure long after the pandemic has ended.
● Solar is the fastest growing job creator in the country. Update, streamline and harmonize the standards, and local governments can pave the way for millions of consumers to move forward on purchases they already want to make.
● Congress recently passed a two-year extension of the Investment Tax Credit for solar power as part of the stimulus bill, which will support new solar development.
It is entirely within local and state governments’ control to streamline solar permitting by using existing national standards. In fact, the National Renewable Energy Laboratory (NREL) has an online portal created for that very purpose. Its SolarAPP (the Solar Automated Permit Processing platform) gives building departments all the control to ensure consumer protections while lowering the cost of going solar by up to 30 percent.
Putting solar within reach
Solar is by far the most popular form of energy among Americans — so much so that since the start of the pandemic, there’s been a 13 percent increase in the number of homeowners who want to put solar on their roofs, according to new market research data from LG Solar. Part of that appeal is how far the cost of solar panels and installation have come down — a full 89% in the last 10 years.
What hasn’t come down are the costs of legacy permitting and inspection processes. Permitting averages 30-40 days. Then, completed work has to be inspected in-person. All of this takes place across a maddeningly complex landscape of state and local standards: 18,000 jurisdictions, 3,000 utilities, and 50 states all with different rules and regulations.
Together, these legacy processes keep soft costs comprising an increasing portion of what homeowners pay to go solar. With the continued cuts in solar manufacturing costs and installation labor, soft costs are comprising more of a homeowners bill than four years ago. Permitting alone now costs an average of $1/watt. For context, the average home solar system is 6,620 watts, or a 6.62-kilowatt system of roughly 21 panels.
Solar is big enough now that its soft costs are a real drag on local economic activity. Soft costs in the U.S. defy the example of other countries that install solar at one-third the cost because of how the steps that drive soft costs have been structured.
Call to action
This is a challenge that cries out for national leadership.
Rocky Mountain Institute last summer laid out a strong case for reforming these processes, perhaps better than we can do here. It’s worth noting that streamlined permitting and inspections are not unchartered territory. Satellite systems are installed without permits. Air conditioning systems are as well. No roofing company would spend one-third of its costs on outdated, Balkanized government regulations. Why make solar installers do that?
With local governments facing an unprecedented need to cut their costs while restarting local economic activity, there’s never been a better time to harmonize codes, and bring permitting and inspection steps into the modern era. Such a step would be fast and non-partisan. More importantly, it would tap a huge, ready-made constituency that’s already behind it. All the Biden team needs to do is to put a ribbon on this idea and provide the leadership for a critical mass of local officials to get on board.
Just as the President-elect is considering calling for a national mask commitment to combat Covid-19, the Biden team can create the right platform for solar reform. It would be a fast step to Building Back Better.
Yann Brandt runs the news site SolarWakeup newsletter. Mike Casey runs the national clean economy marketing firm Tigercomm.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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