The hidden cost of paperwork in solar projects

According to a recent report, the cost per watt of a photovoltaic array rises by about $ 1 per watt due to the extensive paperwork required to enable, complete, and finance it.

According to Steven Chan, chief strategy officer for Suntech Power Holdings, which licenses state and local regulatory agencies, completes inspection reports, and requests the myriad of 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 ins and outs.

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 truss, 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 incentives for “green” buildings to purchase-lease programs and local grant, loan, and rebate programs. The list of participating public services alone reaches almost 100 entries.

Imagine wading through those possibilities and examining all the requirements, just to determine how much a homeowner can ask for 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 concession agencies to accept electronic signatures. Kennedy adds that online estimates can cut solar installation costs by about 10 percent by eliminating up to 80 percent of the necessary pre-site inspections.

Although the average installation cost of solar energy was $ 7.60 per watt in 2007, and the recession has caused a drop in panel prices, solar installations in late 2008 and early 2009 do not show that much of a drop, without count rebates 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 such an inflated workforce that cuts are possible. .

Of course, the more you install, the lower the cost. A five kilowatt system averages $ 8.3 per watt; 750 kilowatts or more average $ 6.8 per watt. Since most residential systems are in the five kilowatt range, prices are still high.

Complicating your solar installation paperwork costs down the road are mandatory renewable energy credits, or RECs. In some states like Maryland, utilities must 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 energy.

Maryland’s mandate has already prompted the creation of at least one company, US Photovoltaics Inc., that offers to establish a homeowner loan and redeem it for the highest value to a participating utility company. For a flat fee of approximately $ 250, and 10 to 25 percent of the REC value, private companies or solar installers licensed to trade these commodity-based certificates will also complete the paperwork to establish the account at 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, Anne Arundel County, Maryland believes your home RECs could generate around $ 10,000 over a 15-year period, speeding up the payback time of your solar system from $ 20,000.

Most reputable solar installers will, of course, handle the paperwork for you while they assemble your system. If you build and install, or simply install, your own solar electric system, you will be responsible for your own paperwork. At $ 1 per watt, I personally think it would leave the headaches to the pros.