US: Red tape holds back solar installer market20. December 2012 | Markets & Trends, Applications & Installations, Global PV markets | By: Jonathan Gifford
New data has revealed that solar installers in the U.S. are being slowed down by red tape, which is pushing up the installed price. The survey data was collected by solar financers Clean Power Finance, which gathered responses from installers across 12 states.
Anecdotal evidence has often pointed to the U.S. solar market being constrained by the complex and varied permitting processes that can be involved. New survey data has now shown that more than a third of installers say permitting is limiting growth.
Due to the varied permitting process for solar installations and the number of different agencies involved, solar installers are unwilling to expand into some new or additional states and regions. More than one third of the installers surveyed in Clean Power Finance’s survey reported that they "avoid selling solar in an average of 3.5 areas because of the associated permitting difficulties."
The sheer number of agencies involved in solar permitting was also made apparent by the survey results, with between two and five agencies normally involved. This could result in mixed messages or conflicting requirements and almost certainly involves more paperwork, notes Clean Power Finance.
Another affect of the permitting requirements, revealed in the survey, is that the cost of solar is directly increased as solar assets can be tied up during the permitting processes, forcing credit lines to be accessed. This additional cost is then passed onto the consumer.
Clean Power Finance collected the data from 273 installers across 12 states, as a part of the National Solar Permitting Database it is compiling. "Strong initial interest in the National Solar Permitting Database makes it clear that people want to address permitting obstacles but aren’t quite sure where to start," said James Tong, senior director at Clean Power Finance and project lead, in a statement announcing the survey results.
Survey respondents were primarily responding to regulation regarding residential installations, however almost all installers reported that they also work on commercial arrays.
Efforts are being taken to reduce the amount of red tape involved with solar installations. Solar veteran Barry Cinnamon is one of founders of the Solar Freedom Now initiative, which is trying to raise awareness about the high "soft" costs in solar in the U.S. Cinnamon has called for a national approach to solar permitting in the U.S. as being the only way to bring down these costs.
"With all the of the jurisdictions in the U.S., there are 18,000 different cities and towns in the country, there’s 3,000 different utility districts, there are 50 different states, we can’t solve it in the US individually," Cinnamon told pv magazine. He argued that Germany is a good example of what can happen when a national approach is applied, with the soft costs being reduced dramatically.
"It was probably close to ten years ago, the German government managed to solve this policy problem by eliminating all the paperwork around rooftop and commercial solar," said Cinnamon. "So we said, 'let’s see if we can do the same thing here in the U.S.,' and that’s why we started Solar Freedom Now."
Clean Power Finance’s incentive to facilitate the regional expansion of solar installers in the U.S. is clear. It acts as a conduit between the financiers in the U.S. and solar installers, through its online interface called CPF Tools.
Clean Power Finance’s Kristain Hanelt told pv magazine that it manages more than $500 million in project financing on behalf of solar investors. "We have 40% of the residential solar industry, in terms of installers, that use our software to quote solar installations," said Hanelt. "So we’ve got this massive pool of installers that are looking for financing and we’ve built a platform to connect them with the market."
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