Paperwork – it's a big headache that could add about $1 per watt to the cost of installing a solar energy system.

"It's not easy to sell to homeowners or small business owners. You need to hire people to deal with the paperwork. Sometimes that adds $1 per watt just to deal with the paperwork," said Steven Chan, chief strategy officer with Suntech Power Holdings, talking about the expansion of the company's network of dealers while at the Cleantech Forum in San Francisco this week. Suntech makes solar panels and develops commercial power projects.  

That $1 per watt makes up a good portion of the overall installation cost, which varies widely by the size and design of the system as well as its location. The average installation cost of solar energy system in the United States was $7.60 per watt in 2007, according to a recent study by the Berkeley Lawrence National Laboratory, (see U.S. Solar Installed Costs Fell 28% Over a Decade). The figure doesn't include any government or private incentives.

Systems with a capacity of 5 kilowatts or less averaged $8.3 per watt while those with 750 kilowatts or larger averaged $6.8 per watt, the study said. Most residential systems are around a few kilowatts while systems for businesses are typically larger – some companies have even installed a few megawatts worth of panels on their properties.

Chan's comment reflected the frustration of many companies that design and install solar energy equipment in the United States.

The increase in the types and values of solar rebates and tax credits from cities, states, federal government and even some utilities have played a key role in bringing new business to installers nationwide. But those good deals also have increased the amount of applications the installers have to file. Other paperwork that needs to be done includes applications to secure local permits and filling out inspection reports.

In some cases, installers would have to mail the applications to their customers to get their signatures, a step that has prompted some installers to advocate for the use of electronic signatures (see Green Light post).

Kirstin Hoefer, the chief marketing officer for Sungevity, said the company also sees similar increases in installation costs. Dealing with paperwork could add $1 per watt to small, 2-kilowatt system, Hoefer said. But the per-watt cost goes down with the increase in the size of a system – like buying in bulk, a larger system tends to cost less per watt to install.

Sungevity, a residential solar installer in Berkeley, Calif., believes that streamlining the paperwork process could present a business opportunity. The company plans to license a set of software tools it's developed that comes with an integrated customer database and document builder for filling out applications and organizing them quickly, Hoefer said.

The offerings also come with a program that enables Sungevity to provide a quote to a customer within 24 hours after the customer fills out an online form. Instead of sending someone to a home to scope out the location and provide a cost estimate, the program uses satellite imaging to seize up the home.

Companies that license Sungevity's toolkit can also get a list of potential customers, consumers who have filled out online forms or surveys to express their interest in owning a solar energy system.

Sungevity hasn't finalized how much it would charge for the software and customer list, Hoefer said. The company, which intends to launch the products this spring, plans to charge less for the customer leads than other marketing companies but collect a fee when the installer makes a sale, she said.

SolarCity, a residential and commercial solar installer based in Foster City, Calif., has automated a big part of the paperwork process so that the added cost is lower than $1 per watt, said Jonathan Bass, SolarCity's spokesman.

Join industry leaders and influencers at Surviving the Shakeout: Greentech Media’s 2009 Solar Industry Summit in Phoenix, Ariz., April 14–15.