According to a recent report, the cost per watt of a PV array increases by approximately $1 per watt due to the extensive paperwork required to permit, complete and finance it.
According to Steven Chan, chief strategy officer of Suntech Power Holdings, permitting from state and local regulatory agencies, filing inspection reports, and applying for the myriad solar rebates and tax incentives available, from entities as diverse as regional city councils to the federal government – make the process too complex and time-consuming for most installers to handle, which is why many companies are now hiring professionals who know the ropes.
The permitting process has improved in recent years thanks to the growing familiarity with solar energy. Most local city building departments and their inspectors have at least a generic understanding of what is needed. Structural engineers, who review a roof’s construction, pitch, and framing, are even more conscientious, and an engineering report on older roofs should be an essential first step in installation. Rebates and incentives, however, are another ball game.
For example, in California, DSIRE (the database of state incentives for renewable energy) lists more than 130 different solar resources, from “green” building incentives to lease buyout programs to local grant, loan, and rebate programs. . The list of participating utilities alone totals nearly 100 entries.
Imagine sifting through those possibilities, and sifting through all the requirements, just to determine how much a homeowner can ask to offset the costs of a solar power installation! According to Danny Kennedy, founder of Sungevity, a solar installer, it can take anywhere from 10 to 20 hours to complete all the paperwork to qualify for a solar rebate. That’s why Kennedy, who has created a software program to provide installation estimates over the Internet, is pushing state and local government and grant agencies to accept electronic signatures. Kennedy adds that online estimates can reduce solar installation costs by about 10 percent by eliminating up to 80 percent of required pre-site inspections.
Although the average installed cost of solar power was $7.60 per watt in 2007, and the recession caused panel prices to drop, solar installations in late 2008 and early 2009 do not show as large a drop, however. count discounts and incentives. In fact, it may take a full year or more for the economic impact of the recession to be reflected in solar installation costs, if only because the surviving solar manufacturers and installers did not start out with such a bloated workforce that cutouts are possible.
Of course, the more you install, the cheaper the cost. A five kilowatt system averages $8.3 per watt; 750 kilowatts or more averages $6.8 per watt. Since most residential systems are in the five kilowatt range, prices remain high.
Mandatory renewable energy credits, or RECs, complicate future solar installation paperwork costs. In some states like Maryland, utilities are required to purchase RECs from residential homeowners. These credits are designed to meet state mandates that specify that a certain amount of a utility’s power generation must come from renewable energy or, more specifically, residential solar power.
Maryland’s mandate has already spurred the creation of at least one company, US Photovoltaics Inc., which offers to set up homeowners’ credit and trade it at higher value to a participating utility. For a flat fee of about $250, and 10 to 25 percent of the value of the REC, private companies or solar installers licensed to market these commodity-based certificates will also complete the paperwork to set up the account. at the state and federal level.
The REC business is fairly new, so costs and profit margins are somewhat unknown, but Maryland dealers estimate that each kilowatt-hour is worth between $450 and $700. Karen Czarnowski of Anne Arundel County, Maryland , believes the RECs on your home could generate about $10,000 over a 15-year period, speeding up the payback time on your $20,000 solar system.
Most reputable solar installers will, of course, handle the paperwork for you as they set up your system. If you build and install, or simply install, your own solar electric system, you will be responsible for your own documentation. At $1 per watt, I personally think I would leave the headaches to the professionals.
