Solar soft costs account for over 60% of the cost of a solar PV system in the US. Learn how local governments can act to accelerate solar deployment.
Since the 1970s, the cost of solar photovoltaic (PV) modules have come down by a staggering 99%. In 1975, panels cost nearly $30 per watt—today those panels cost less than $1/watt and an entire PV system can be installed on a residential home at a cost of around $4.50 per watt (national average). However, these prices are about double what they are in Germany and Australia. As former Energy Secretary Stephen Chu used to say, “even if the panels were free, a PV system might cost $20,000.” How is this possible?
What are Solar Soft Costs?
The reason is soft costs. Soft costs include the local government process and policy costs associated with things like permitting, interconnection, inspection, labor and customer acquisition. All together, these solar soft costs account for more than 60% of the total cost of a solar PV system in the US.
The U.S. has over 18,000 unique permitting jurisdictions, each with its own process. As a result solar PV costs more than it has to and installers even avoid doing business in jurisdictions with the most cumbersome processes. In order to reach US Dept. of Energy (DOE) SunShot solar PV cost goals, as well as climate and renewable energy targets, soft costs must be addressed.
The Solar Opportunity for Local Governments
As the impacts of climate change increase over the coming years and decades, cities and local governments across the United States will need to take strong leadership and action in order to meet their climate and economic goals. The solar PV market has the ability to play a key role in helping cities meet their emission reduction targets, and in many cases, reduce the cost of electricity. However, there is still a need for greater reduction in soft costs to make solar PV a more financially viable option in many communities.
What Can Local Governments Do?
A number of federal and state government initiatives are under way to help local governments across the country implement proven strategies for reducing soft costs and growing local solar markets. These initiatives seek to train and empower local government officials and stakeholders with national best practices for reducing soft costs and bureaucratic red tape.
Some of these programs include:
- US Department of Energy SunShot Solar Outreach Partnership (SolarOPs). Funded by the US DOE’s SunShot Initiative, SolarOPs is designed to facilitate adoption of solar energy at the local level by providing educational workshops, peer-to-peer knowledge sharing, and online resources.
- Rooftop Solar Challenge II – Solar Ready II (SRII). Supported by the US DOE SunShot Initiative Rooftop Solar Challenge II (RSCII), the SRII team aims to reduce rooftop solar soft costs through streamlining permitting, financing, zoning, net metering, and interconnection processes.
- NY-Sun PV Trainers Network (PVTN). PVTN is a core component of Governor Cuomo’s NY-Sun Initiative, providing education, training, and technical assistance to local governments to identify opportunities, mitigate barriers, and create barriers that accelerate the growth of solar PV across New York State.
Many of the services offered by these state and national programs are provided at no cost to local governments: national best management practices, webinars, fact sheets, workshops, and technical reports are publicly available in order to assist local governments looking to deploy solar projects in their jurisdictions. In addition, complimentary one-on-one assistance is available to jurisdictions in need of support tailored to overcoming barriers local solar markets, including but not limited to customized workshops, Solarize program consulting, municipal procurement, soft cost evaluation, and zoning ordinance and local permitting practices review.
Meister Consultants Group, Inc. (MCG) is part of the SolarOPs and SRII teams and is the lead organization implementing the PVTN. Through these programs, we have provided outreach, education and assistance on solar best practices through these programs to over 3,000 local government officials and stakeholders in 28 states.
Feel free to contact us at firstname.lastname@example.org for no-cost assistance on how your local government can help achieve its energy and climate goals and work to reduce solar soft costs.