“If your plan involves Congress, it’s a bad plan.”
While module prices plummet, the soft (non-hardware) costs of installing solar systems remain a stubborn barrier to affordability. The difference between the U.S. $4.44 per watt average installed cost for a typical residential rooftop system and the $2.24 per watt figure for comparable German systems, GTM recently reported, is in soft costs like customer acquisition, permitting, inspection and interconnection.
Red tape is also the likely culprit responsible for putting average U.S. system installation time at 75 days versus 7.5 days in Germany.
A solar installer in one Southern California city can take a set of plans to the proper authority and get a permit to build within 48 hours, Paramount Solar VP and twelve-year solar industry veteran Todd Lindstrom recently said. But in a virtually indistinguishable city of the same size that is immediately adjacent, “If I get it done in under three weeks, it’s a miracle.”
NREL Solar Analyst Kristen Ardani and VoteSolar’s Adam Browning previewed a forthcoming U.S. soft cost update from NREL and LBNL researchers. The final data will be published by the U.S. Department of Energy (DOE) later this month. And DOE’s SunShot program opened a new $10 million competition in September for “innovative, sustainable, and verifiable business practices that reduce these soft costs to $1 per watt.”
GTM asked Ardani and Browning for their observations on the two main industry-wide efforts underway to attack the complexities of permitting, inspection and interconnection that have U.S. installers tangled up in red.
One approach, led by third-party-finance leader Clean Power Finance (CPF), would create a national permitting database. The other, the Solar Freedom Now (SFN) movement co-founded by industry pioneer Barry Cinnamon, would gather political momentum to drive Congress to standardize procedures at the federal level.
In its winning bid for a $3 million DOE grant to create an online database of local permitting standards, CPF estimated it could cut the balance-of-system (BOS) soft costs of installing a five-kilowatt (DC) residential rooftop solar system by more than $0.22 per watt.
“Getting a permit is the choke point in the process,” CPF CEO Nat Kreamer said, “[and it is] driving solar companies crazy today. It’s time-consuming, it’s costly and it makes for a bad end-consumer experience.”
“We have to solve this problem,” SFN’s Cinnamon, a 30-plus-year solar veteran who has done everything from rooftop installs to running Westinghouse Solar (PINK: WEST), said. “The way we are going to solve it is on the national level because 18,000 cities, 3,000 utilities, 50 states, you’re never going to fix it everywhere.”
There is, Cinnamon said, “a quicksand of stupid regulations and requirements and we need a policy standard to bring to lawmakers in Washington, D.C., which has two million people who want it.”
“Clean Power Finance has some great efforts under way with their permitting database that will disclose different requirements across jurisdictions,” Ardani said. “What we are hearing from installers is that something like a database, where you can go on and look at all the different requirements, could be a huge time-saving measure.”
Even knowing about increased paperwork could cut soft costs, she added. “Just deciphering and investigating what each jurisdiction is asking for is a huge time and cost expense.”
A database could also generate action from the bottom up that leads to more rationalized fee structures, Ardani suggested. “A lot of times what you see are fees that seem arbitrary. Why is this fee $300 and this fee $800?”
Browning’s VoteSolar group is planning to incorporate the CPF metrics on time, process, and cost into its own web tool that will allow installers “to click on a state and drill down to local jurisdictions.”
The website will be part of a VoteSolar effort to identify “best practices on eight different data points.” The objective, Browning said, is to get jurisdictions involved in setting “that gold standard of simplified and cost rational permitting.”
SFN’s drive for federal legislation should be pursued and could be successful, Browning said, but “given Congress’s complexity, and the fact that states and local jurisdictions fiercely guard their prerogative of local control, nobody should count on it.”
The good news, Browning said, “is there will be efforts from the top down and from the bottom up,” so the group says it “will get at it one way or the other.”
“The best thing,” Ardani said, “is to have best practices and drive toward them at the local jurisdiction level.”
“I wish we could get it done in one fell swoop at the federal level,” Browning said, “but our line around the office is, ‘If your plan involves Congress, it’s a bad plan.’”
DOE’s SunShot Initiative is subsidizing research so it can stop subsidizing solar energy generation.
The Department of Energy (DOE) SunShot Program has a specific goal: to move the cost of solar-energy-generated electricity to be competitive, without subsidies, with the cost of fossil-fuel-generated electricity by 2020. In service to that, it supports research in every dimension of both photovoltaic (PV) solar and concentrating solar power (CSP) along the entire gamut from basic to applied science. DOE calls SunShot “the Apollo Mission of our time.”
Because things in Washington, D.C. go down more easily when there are numbers attached, DOE Solar Technology Development Manager Joseph Stekli noted that the SunShot program designated an unsubsidized cost of six cents per kilowatt-hour as its target for solar power plants. That translates, according to the DOE, to $3.60 per watt for CSP systems with up to 14 hours of thermal energy storage (TES).
The specific goals for TES are a cost below $15 per kilowatt-hour, a round trip efficiency of 93 percent, and a heat-retaining efficiency of greater than 95 percent.
DOE is also targeting a heat transfer fluid, Stekli added, with a thermal stability of as high as 1,300 degrees C, a freezing below-zero degrees C, a heat capacity twice that of current solar cells and other characteristics similar to currently used molten salts.
Stekli and DOE SunShot PV Team Lead Lidija Sekaric talked about the SunShot program during the Smithers APEX solar summit in San Diego.
Sekaric reported the 2020 target is five cents per kilowatt-hour for PV, which represents approximately $1 per watt (for utility-scale PV, $1.25 for commercial rooftop PV and $1.50 for residential rooftop PV). That would be a 75 percent cost reduction from the cost at the program’s 2011 launch. And, driven by stiff competition from China, Sekaric reported, the Q4 2011 crystalline silicon module price was $1.03 per watt.
SunShot, Sekaric added, is also funding research aimed at bringing down balance-of-system (BOS) costs and rooftop solar “soft costs,” which include finding, financing and contracting with customers, streamlining the red tape associated with permitting, inspection and interconnection, and getting installation and performance monitoring done.
CSP is not coming along as fast, but SunShot-funded research is accruing momentum, Stekli reported. Many more proposals for research came in this year than the program has previously had. “I wish I could tell you more about them, but we haven’t announced them yet,” Stekli said. “Some significant projects will happen that will push CSP toward the six cents per kilowatt-hour goal.”
He did note that for FY 2012, 33 percent of funds went to research labs, 45 percent to industry, and 20 percent to universities. Research into solar power tower technology captured 40 percent of the funds, trough technology got 20 percent, and storage technologies got 30 percent.
There was, Stekli said, a shift of R&D funding between FY 2011 and FY 2012 from trough technology to tower technology, which “represents the state of the technologies.” Trough technology is now seen as essentially proven.
DOE also, Stekli added, funds cutting-edge programs through ARPA-E and loan guarantees. “There are five CSP plants under construction in the U.S. and all have received DOE loan guarantees,” he noted. “Almost $6 billion has been made available for these plants, which will total about 1.3 gigawatts of generating capacity. We’re very excited about these plants and cannot wait to see them come on-line.”
Recovery Act money went largely to ongoing facility improvements at DOE’s National Renewable Energy Laboratory (NREL) and Sandia National Laboratory. The balance went to research.
Asked what the solar industry can expect from DOE in 2013 and beyond, Stekli was politic. “Anyone’s guess is as good as mine,” he said. “The U.S. Senate hasn’t passed a budget in three years and I don’t have any anticipation they will pass a budget next year. We operate under what are called continuing resolutions. Generally, what they do is hold funding flat. It’s an election year. Maybe things change after the election. But we’re moving forward under the assumption our funding will be flat. Beyond next year is unknowable.”