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Solar Communities: SunShot Seeks to Reduce Solar Cost
Reprinted with permission from the June 2011 issue of Public Management (PM) magazine published and copyrighted by ICMA (International County/City Management Association), Washington, D.C.

What communities can do to make solar cost competitive

The Department of Energy's (DOE) SunShot Initiative aims to make the cost of solar energy competitive with other forms of energy, including fossil fuels. DOE is working to reduce the cost of solar energy by more than 75 percent by 2020.

Reaching this level of cost competitiveness should result in large-scale adoption of solar technologies in the United States. To achieve this goal, SunShot is focused not only on technological advances that make solar technologies more efficient but also on nontechnical barriers, including permitting and installation costs. These soft costs can add significantly to the price of a solar energy system and discourage municipal, residential, and commercial property owners from installing solar.1

Solar energy can have a number of benefits for communities, and local governments are well positioned to help make solar technologies more accessible. Solar energy can help create jobs, stimulate investment in the local economy, promote energy independence, and address air and water quality concerns.

Local governments can play a key role in removing barriers to solar installations, including confusing permitting processes and interconnection standards, complicated inspection processes, lack of financing mechanisms, and lack of public awareness about solar.

Streamline permitting processes. Permitting costs, including the wide variation in local permitting processes, excessive permitting fees, and manual submittal of permitting documents, can add more than $2,500 to a residential solar installation while not improving safety.2

Creating a streamlined and consistent permitting process for solar installations can help reduce costs, as can online permitting. Local governments can simplify permitting processes and fee structures, make permitting information available to prospective solar energy system owners and contractors, and fast-track permits where appropriate.

San Jose, California, has streamlined its permitting process, and permits can be waived for installations meeting simple requirements regarding weight, concentrated loads, and height. These permitting changes, along with scheduling post-installation inspection appointments within a two-hour window, have helped reduce the costs of solar installations in San Jose to well below those of other large California cities.3

Improve inspection processes. Providing training for code officials responsible for enforcement related to solar installations can help address solar costs. Training can clarify technical elements of solar energy systems and make sure that systems are installed properly. It can also promote safety during installation and expedite inspection, saving money across the board.

Improve interconnection policies and processes. Although interconnection standards are often determined at the state level, local governments with municipal utilities can often influence interconnection standards. Adopting efficient interconnection standards that specify different levels of review for systems of different sizes and complexities, establishing transparent interconnection processes, eliminating requirements for liability insurance, and combining interconnection and permitting applications can all help reduce costs of installation.

Local governments can also work with investor-owned utilities to improve the interconnection process-something New York City's Solar America City team did. Together with ConEdison, the team examined the technical aspects of interconnection, focusing on maximum technical potential of deployment of photovoltaic (PV) systems. As a result, PV systems under 200 kilowatts are not required to undergo a comprehensive engineering review before connecting to the grid.4 A report by the Network for New Energy Choices grades the 50 states on the solar-friendliness of their interconnection standards.5

Support financing options. Homes and businesses traditionally pay for electricity monthly. Even with the price of solar energy systems dropping rapidly, purchasing a system outright is a significant investment that many cannot afford.

Fortunately, many promising financing models have emerged. Local governments can work to ensure that state and local policies allow for third-party ownership of solar energy systems, which allows solar companies to offer leases or power purchase agreements that spread costs over time. Local governments can also set up property-assessed financing, community solar financing, or group purchasing programs that make solar more affordable.

Install demonstration projects. Demonstration projects increase awareness of solar energy. They can be installed on local government property or in other highly visible community spaces and can include an educational component.

Jackson, Wyoming, which has the largest solar installation in the state on its wastewater treatment plant, also has installed a 24 kilowatt demonstration project on a parking garage in the town's downtown. This demonstration shows the community the benefits of solar energy and energy efficiency.

For more about what communities can do, see the publications listed in the endnotes to this article, which also include the Internet addresses. Solar America Communities workshops will be available at the National Association of Regional Councils Annual Conference, June 13-15, San Diego, California; and ICMA's Annual Conference, September 18-21, Milwaukee, Wisconsin.

Solar America Communities is a U.S. Department of Energy (DOE) program. ICMA and ICLEI-USA Local Governments for Sustainability were competitively selected by DOE to conduct outreach to local governments across the United States.

1 "SunShot Initiative," U.S. Department of Energy, www1.eere.energy.gov/solar/sunshot/.
2 Sun Run, The Impact of Local Permitting on the Cost of Solar Power: How a Federal Effort to Simplify Processes can Make Solar Affordable for 50% of American Homes (January 2011), www.sunrunhome.com/permitting.
3 Ibid.; Department of Energy, Solar Powering Your Community: A Guide for Local Governments, 2nd ed. (Washington, D.C.: DOE and Solar America Communities, January 2011),
solaramericacommunities.energy.gov/pdfs/Solar-Powering-Your-Community-Guide-For-Local-Governments.pdf.
4 Department of Energy, Solar Powering Your Community.
5 James Rose et al., Freeing the Grid: Best Practices in State Net Metering Policies and Interconnection Procedures (New York: Network for New Energy Choices, Vote Solar Initiative, Interstate Renewable Energy Council, and North Carolina Solar Center, December 2010),
www.newenergychoices.org/index.php?page=publications&sd=no.


Solar America Communities is a U.S. Department of Energy (DOE) program designed to increase the use and integration of solar energy in communities across the United States. ICMA and ICLEI-Local Governments for Sustainability USA were competitively selected by DOE to conduct outreach to local governments across the United States, enabling them to replicate successful solar practices and quickly expand local adoption of solar energy. For more information, visit www.solaramericacommunities.energy.gov.

Anna Read
Project Manager,ICMA
Washington,D.C.
aread@icma.org
Arizona City/County Management Association
1820 W. Washington Street, Phoenix, AZ 85007   •   Phone: (602) 258-5786   •   Fax: (602) 253-3874   •   www.azmanagement.org