To tackle PV's "soft" costs, it takes a solar-friendly community
Between 2008 and 2012 the installed cost of a residential rooftop solar PV system in the U.S. declined by 37 percent. That sounds like good news, and it is, but more than 80 percent of that cost decline was due to module prices. Balance-of-system costs remain high, so solar can—and needs—to do better. That’s why the U.S. Department of Energy’s SunShot Initiative is targeting $1.50 per installed watt for residential systems by 2020, compared to nearly $5/W today.
For prices to fall another 70 percent by the decade’s end, the U.S. will need to learn from the examples of places such as Germany. In that cloudy, northern European country, residential solar PV systems cost a mere fraction (45 percent) of what they do stateside, and have the SunShot target well in their sights, with costs already down to $2.25/W. It’s not the hardware, whose cost is relatively constant across countries. It’s the process. The total cost of any PV installation includes not just the hardware, such as the panels themselves, but also “soft” costs, such as installation labor; permitting, inspection, and interconnection (PII); and customer acquisition.
Thanks to steep declines in module prices, such soft costs now make up more than 60 percent of the total price of a solar PV installation. It’s in those arenas where countries such as Germany shine, and where the U.S. can make real progress, according to a December 2013 Rocky Mountain Institute report with Georgia Tech Research Institute (GTRI), Reducing Solar PV Soft Costs: A Focus on Installation Labor. Installation labor costs in Germany, for example, are just two-fifths what they are in the U.S., and for PII costs, an astounding one-sixth.
Whether for a customer directly or via a third-party solar developer, PII can be a big deal, and streamlining the PII process can reduce aggravating hassle, speed installation times, and save cost. And so in early 2012, the Colorado Solar Energy Industries Association (COSEIA) and Rocky Mountain Institute launched an effort to rein in soft costs. With help from a $491,000 grant from the U.S. Department of Energy’s Rooftop Solar Challenge program, Solar Friendly Communities (SFC) was born. The aim was to cut permitting, inspection, and interconnection costs 25 percent through a combination of policy changes and online tools. Solar Friendly Communities’ success in Colorado now has its creators looking to take the program national.
“It really is a true partnership between industry and local government, designed to make it faster, easier, and more affordable to go solar,” says Rebecca Cantwell, COSEIA’s senior program director. It was a grassroots approach, adds Jesse Morris, a Rocky Mountain Institute senior associate who worked on the program’s technical design.
First, the team talked with about two dozen solar installers from across Colorado’s Front Range—a north-south corridor along the foothills of the Rocky Mountains that includes Colorado Springs, Denver, Boulder, and Fort Collins—to understand installers’ pain points. They heard about challenges in finding specifics on a given municipality’s requirements for solar; the differing paperwork demanded by different towns, cities, and counties; multiple inspections; and vast differences in permitting costs.
“When you think about it, if you’re a solar installer working in the area, you’re holding business and contractor licenses in at least 12 jurisdictions across the Front Range,” says Whitney Painter, co-owner of Golden, Colo.-based Buglet Solar.
RMI and COSEIA took these and other concerns to local governments, Morris says. They spoke with everyone from building officials to sustainability officers, from city council members to plan checkers. The team asked a simple question: How can we make this easier from your perspective?
The Solar Friendly Communities team conducted workshops with municipalities and solar installers, and Morris and RMI colleagues developed a 12-step program, each step representing a solar best
practice, ranging from posting requirements on a single government Web page to adopting standard permit forms to requiring just a single inspection. Each step was assigned a point value. Participating governments could pick and choose, earning points to achieve bronze, silver, gold, or platinum status. The result, Cantwell says, is “a program based on national best practices but rooted in reality. It’s a menu of options and not mandates.”
More than a dozen Colorado communities have signed on so far, from Carbondale (pop. 6,500) to Denver (pop. 635,000). Aurora, the state’s third-largest city, was already meeting many criteria, according to Karen Hancock, Aurora’s environmental program supervisor. Missing was a Web page listing or linking to all the requirements for rooftop solar, she said. By January 2013, auroragov.org/solar was live and Aurora had earned silver status, complete with a city council visit and a plaque. The recognition, Cantwell says, is a bigger carrot than one might expect: “No one ever gives a code official a pat on the back.” In Aurora’s case, the designation helps businesses and residents realize the city is a strong supporter of solar, Hancock says. “And yes, I love that plaque,” she adds.
In addition, towns achieving the “medal” status often put up a sign as you enter town, similar to the road signage that often highlights Tree City USA and Bicycle Friendly Community status. For example, as you travel on Carbondale’s main thoroughfare, Route 133, you’ll see road signs for Carbondale’s proud status as both a silver-level Solar Friendly Community and a Bicycle Friendly Community greeting you as you enter town.
Installers have been happy with the results, too—no small thing, since third-party-owned and -installed arrangements accounted for 90 percent of new installs in Colorado in 2012—to the point that 16 Colorado solar companies are offering $500 discounts to customers living in SFC jurisdictions. Painter of Buglet Solar, which is offering the discount, says there’s been a “marked difference” in working with SFC communities “It’s not just about lower costs, but smoother process,” she says.
Not only are there more consistent PII requirements among SFC jurisdictions, but there’s also more uniform knowledge of solar-related best practices within a given municipality, Painter says.
“There’s been a shift from the counter all the way back to the reviewer as far as having a global understanding,” she says. At the job site, SFC-related best practices such as tight inspection windows make a big difference for installers, she adds. “In some jurisdictions not working with the program, you’ll have to wait around for a whole day for an inspector to show up for a rough inspection.”
All told, a community participating in SFC can shave “many hours to a couple of days” off an installation, she says, which means that much less time a homeowner has to deal with “people crawling around on the roof.”
Participating communities are also promoting the discount program and its installers, which helps drive business and cut customer-acquisition costs, according to Morris. “We’re a small business—it is helpful to us,” Painter adds.
Two years after it began, the program has gained momentum with growth. With its foundation in place, COSEIA and the Colorado Nonprofit Development Center have created a new nonprofit home for Solar Friendly Communities, Go Solar Colorado, to raise funds and take it national.
“We think it has tremendous potential and have heard interest in adopting the program from all over the country,” says Cantwell.
Todd Neff is a freelance writer who specializes in covering energy and climate.
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