According to a recent report, the cost per watt of a PV array increases by about $1 per watt due to the extensive paperwork required to permit, complete, and finance it.
According to Steven Chan, director of strategy for Suntech Power Holdings, permitting from state and local regulatory agencies, filling out inspection reports, and applying for the myriad solar rebates and tax incentives available, from entities as diverse as regional 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 increasing familiarity with solar power. 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 frame, are even more aware, 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-purchase programs to local grant, loan, and rebate programs. . The list of participating utility companies alone amounts to almost 100 entries.
Imagine looking at those possibilities and going through all the requirements, only 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 lobbying 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 necessary 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 nearly 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 surviving solar manufacturers and installers did not start with a workforce so bloated that cuts are possible.
Of course, the more you install, the cheaper the cost will be. 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, such as Maryland, utility companies are required to purchase RECs from residential homeowners. These credits are designed to comply with 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.
The Maryland mandate has already spurred the creation of at least one company, US Photovoltaics Inc., offering to set up homeowners’ credit and exchange it at the higher value to a participating utility. For a flat fee of around $250, and 10 to 25 percent of the value of the REC, private companies or solar installers licensed to trade these commodity-based certificates will also complete paperwork to establish the account. at the state and federal level.
The REC trade is fairly new, so costs and profit margins are somewhat unknown, but Maryland traders estimate that each kilowatt-hour is worth between $450 and $700. Karen Czarnowski of Anne Arundel County, Maryland , he believes that the RECs on his home could generate about $10,000 over a 15-year period, which will speed up the payback time of his $20,000 solar system.
Most reputable solar installers will, of course, handle the paperwork for you while putting your system together. If you build and install, or simply install, your own solar electric system, you are responsible for your own documentation. At $1 per watt, I personally think I’d leave the headaches to the professionals.
