Anyone in the solar industry can tell a story or two about the nightmares of securing building permits for a solar system. On the surface, this appears to be an annoying nuisance that most people would like to brush away as something that just has to get done on the way to get the project completed. After all any major work on any building requires a building permit. But as the "hard" costs (panels, inverters, balance of system costs) have dropped significantly over the last couple of years, the soft costs like getting the permit have not moved much and are a significant barrier to making solar more affordable and competitive with non-renewable energy sources. This report by our partner company SunRun highlights these issues in more detail and estimates the cost to be about $0.50/W for a residential install. The biggest problem is not the actual cash expense of the permit (although some jurisdictions charge well over $500 which is astronomical given the actual work that is done on each permit), but the labor cost incurred in the process. One of the largest solar installers in California once told me that they employ 16 "permit runners". A permit runner's main responsibility is it to physically go to the building department for each permit. They either have to set appointments or just wait in line for hours to present plans in person. Sometimes they have to go back several times to get a simple residential project (under 10kW) approved.
A great example that just arrived in my inbox today comes from one of our installer partners . Here is the (very) abbreviated version of the story: " We had an appointment in the beginning of March to submit to review for permit. When our technician arrived, the officials had no record of there being an appointment. This is not the first time the building department has done this. We had no choice but to schedule another appointment, but the building department only takes appointments by phone and would not let our technician make one when he was there. He called when he left their office and could only leave a message. He called the next day and was able to speak with someone. They gave him their next available appointment for first thing Thursday morning, 3/31. It turned out that this day was available because it was Cesar Chavez Day and the office was closed that day. We had to reschedule again for an appointment this Thursday in the morning."
A good example of an inefficient bureaucracy that systematically wastes time and destroys value. Is there hope for these processes to improve and therefore reduce the costs for homeowners to get their energy for a better energy source? I am pretty pessimistic. Here are some hard numbers that make this game a difficult one to win. The main policy stakeholders that shape a local solar market are (1) the utility commissions, (2) the state legislatures, (3) the utilities, and (4) the building departments (officially called "Authority Having Jurisdictions" or AHJs). In the US there are 51 utility commissions, 51 legislatures and about 3,000 different utilities. And there are 18,000 AHJs. Each of these 18,000 AHJs have different approval processes, different permitting requirements and different software products they use (or none at all). Is it realistic that we can influence a majority of these AHJs to adopt certain permitting standards and use 20th century technology (e.g. allow customers to submit permits online)?
A great example that just arrived in my inbox today comes from one of our installer partners . Here is the (very) abbreviated version of the story: " We had an appointment in the beginning of March to submit to review for permit. When our technician arrived, the officials had no record of there being an appointment. This is not the first time the building department has done this. We had no choice but to schedule another appointment, but the building department only takes appointments by phone and would not let our technician make one when he was there. He called when he left their office and could only leave a message. He called the next day and was able to speak with someone. They gave him their next available appointment for first thing Thursday morning, 3/31. It turned out that this day was available because it was Cesar Chavez Day and the office was closed that day. We had to reschedule again for an appointment this Thursday in the morning."
A good example of an inefficient bureaucracy that systematically wastes time and destroys value. Is there hope for these processes to improve and therefore reduce the costs for homeowners to get their energy for a better energy source? I am pretty pessimistic. Here are some hard numbers that make this game a difficult one to win. The main policy stakeholders that shape a local solar market are (1) the utility commissions, (2) the state legislatures, (3) the utilities, and (4) the building departments (officially called "Authority Having Jurisdictions" or AHJs). In the US there are 51 utility commissions, 51 legislatures and about 3,000 different utilities. And there are 18,000 AHJs. Each of these 18,000 AHJs have different approval processes, different permitting requirements and different software products they use (or none at all). Is it realistic that we can influence a majority of these AHJs to adopt certain permitting standards and use 20th century technology (e.g. allow customers to submit permits online)?
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