In the world of solar module manufacturing, potential savings of a few pennies per watt is a big deal and calls for massive engineering efforts.  

But installation costs for solar can be reduced by 50 cents per watt simply by harmonizing the solar permitting process from town to town, according to a recent report to the DOE from solar leasing firm SunRun. The report claims that inconsistencies in permitting can cost consumers up to $2,500 on a 5-kilowatt rooftop solar system. SunRun also said that the wasted money from permitting inefficiencies "looks like a $1 billion tax on solar over the next five years."

The cost stems from the time spent by installers in getting the building, zoning, and fire department permits, waiting for inspection, dealing with changes -- and losing customers in the process. The report also adds that Germany has a 40 percent installation price advantage over the United States.

The cry for an improved permitting process in the U.S. has been put forth by SolarTech, Vote Solar, and other organizations and firms. The DOE SunShot program is looking to get solar to $1.00 per watt installed. It can't happen without a well-thought out permitting process.

Last week, the state of Vermont actually did something about it.

Vermont Governor Peter Shumlin signed the Vermont Energy Act of 2011 (H.56). The law provides for net metered solar power in Vermont, as well as implementing a pioneering permitting process for small solar systems (less than 5 kilowatts) that is a model for reducing the "soft costs" of residential solar.    

For those small-scale solar customers, the process entails completing a registration document and a certificate of compliance with grid connection requirements. The local utility will then have 10 days to raise any interconnection issues.  

Doug Payne, the Executive Director of SolarTech, had this comment: "These are the sort of 'Micro-Policy' Innovations critical to driving up to $1.00 per watt of red-tape out of the marketplace in the next few years and aligns well with SolarTech's National Soft Cost reduction roadmap proposed to the DOE last month.  At the end of the day, all solar is local. A 'solar in a box = over the counter' approach like this gets us where we need to be cost-wise even faster. We still need to standardize on codes, inspection requirements, and fee structures, but this is clearly a step in the right direction."

SunRun's Ethan Sprague said that since solar is new, permitting entities are subjecting 100 percent of system applications to a high degree of scrutiny, when only a few need to be looked at. He said, "It should be more like installing an appliance than re-wiring a house." About Vermont, Sprague said, "What's unique and significant about Vermont's program is the uniformity.  They took state-level action, which demonstrates to other states that local permitting reform with the same standards across all jurisdictions is possible."

Germany reports about one million new home solar power installations in the past two years alone, while the total number of homes ever to go solar in the United States has just broken a meager 120,000. Germany's permitting paperwork load is a few pages.

Vermont has a population of about 630,000 -- so the scale of the state's residential solar deployments is in the hundreds of rooftops as opposed to the tens of thousands of rooftops in California, Arizona, Nevada, or New Jersey.

But Vermont has shown that the permitting beast can be tamed.


Here's SolarTech's take on soft costs: