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Paperwork … who loves it? Certainly not many solar panel installers who are frustrated with what they say is a bureaucratic permitting processes in some of the sunniest states, according to a survey released Wednesday.
Roughly one in three installers said they have avoided expanding their businesses to over an average of three regions because those areas would make it difficult (ie. expensive) for them to obtain permits, the survey said. Government agencies and utilities can take up to almost eight weeks collectively to sign off on permits. The survey also showed that 11 percent of installations happen in cities or counties that don’t have rules in place to issue permits.
The survey, conducted by San Francisco-based solar financing startup Clean Power Finance, is part of a project funded by the U.S. Department of Energy’s SunShot initiative. SunShot supports projects that seek to reduce the cost of installing solar panels so that solar energy can price competitively against power from coal or natural gas power plants.
The program also has allocated money to develop more efficient solar cells and design systems of solar panels and other components to make them quicker to install. Cutting red tape isn’t a sexy subject, but non-hardware costs can make up 41-50 percent of the expense of selling and installing a photovoltaic system, said a recent report by the National Renewable Energy Laboratory.
These so-called “soft costs” in general refer to the costs of marketing, signing up customers, helping customers line up financing, designing and installing a solar systems, applying for permits and even monitoring the system’s performance post installation. Many of the solutions on the market that are reducing soft costs are using software and are focused on communication strategies.
For some venture capitalists, who have shied away from putting money into capital-intensive technologies such as solar cell manufacturing, they have found solace in investing in software-centric startups. The executives at SolarCity, which just went public, have talked about the importance of solid software – and they develop their own – in coming up with business expansion plans.
With the SunShot funding, Clean Power Finance is knitting together a national database of local regulations for issuing permits to install solar electric systems and connect them to the local electric grid. The database isn’t just for solar retailers. It also could serve as a guide for cities, counties and utilities looking for good role models as they draft their permitting regulations.
“What is often ignored is when we talk about solar permitting it’s as if installers are bearing all the costs. The city is bearing the cost, too,” said James Tong, senior director of Clean Power Finance and the leader of the database project. He’s gotten responses from government agency officials who say, they, too, are frustrated by poorly organized and incomplete paperwork from installers.
Clean Power Finance released an early version of the database in September, and it plans to release a more data-rich version in early 2013, Tong said. He hopes to get more crowd-sourcing going to help him expand the database. The project started only in late 2011 and is set to run for three years, after which the company plans to continue to maintain and expand it and to make it available for free.
The survey aims to identify and quantify the challenges that the installers, government agencies and utilities face in promoting or regulating a relatively new but growing type of business. Tong conducted the survey this past summer and received responses from 273 residential solar installers who had completed 546 projects in 12 states, which include California, New Jersey, Colorado, Hawaii and New York.
The survey found that installers on average deal with two agencies, such as a city’s planning department and the local utility, but sometimes they have to contend with five. It’s ideal to have to face just one, though, Tong noted that scenario is unlikely unless the utility also happens to be run by the city.
So what is the ideal permitting experience for installers? The specifics will vary depending on whom you talk to. But in general, they want to be able to file their applications easily, such as by electronic submission. They don’t want to wait a few months to get all the permits and complete the sale, especially when it usually takes them less than two days to fill out the paperwork. They also want to avoid high permitting fees, though there doesn’t seem to be a consensus on what is considered excessive. The database project, if successful, could provide an invaluable service and help to track the growth of the solar industry.