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The Metric

Dec 7, 2015

Policy, not sun, influences solar

Solar power is best where it’s sunny, right? Our team examines how state and local incentives can spur solar adoption, even where the sun doesn’t shine.
Residential rooftop PV panels on a home in Maryland. Photo by Mauel Balce Ceneta: http://www.corbisimages.com.

Solar power in the U.S. has taken off in the past few years, with the total power-generating ability of all installed photovoltaic (PV) panels, or installed capacity, increasing nearly six-fold since 2010. Most people assume that solar panels are more prevalent in sunnier regions, yet the amount and capacity of installed PV panels varies considerably from state to state, even among those with similar geographies. Connecticut and Massachusetts, for instance, share essentially the same climate and geography, yet their installed solar capacities are 164 MW and 876 MW, respectively; enough to power 28,000 and 143,000 homes. Adjusting for population, Connecticut’s per capita capacity is 46 Watts compared to Massachusetts’ 130 Watts. With the same amount of sun, why do we see such a stark differences between state solar sectors?  


Installed capacities differ across  U.S. states (see chart above) owing to a number of factors.  Local incentive programs is one factor accounting for differences between states.  

New York residents who install PV systems on their homes receive a 25% state tax credit (in addition to the federal 30% tax credit) on the value of the installed system, up to $5,000.  In Arkansas, however, where there is plenty of sun, the state offers no credits or incentives. Maryland, Massachusetts, and New Jersey have renewable energy targets and pay residents to generate solar through Solar Renewable Energy Certificates (SRECs), incentives that are absent in most other states. Even without direct stimulus, states may mandate net metering, which allows utility companies to credit homeowners for excess electricity generation.  Solar Power Rocks, an informational website dedicated to communicating state-by-state return on investment (ROI) of solar installations, provides an informative analysis on state level policies and incentive packages.

State-level incentives matter and when assessing solar policy, but it is important to also focus on how local, namely municipal, policies affect costs and overall adoption. In most U.S. cities, the residential PV permitting process begins when an installer submits an application on behalf of a homeowner to the “enforcing agency,” usually a municipal building inspection department. Once approved, the system is installed and inspected to ensure compliance with building codes and local ordinances. Compliance approval is determined by the municipality, often the building official and other departments that require sign-off. Meanwhile, the installer contacts the local utility to request permission to connect to the distribution grid. Once inspections and interconnection to the grid have been completed, the system is turned on. 

This process is more or less the same throughout the U.S., but the documentation, number of reviews and inspections, and permit turn around times and cost differs from state-to-state and even across municipalities, resulting in complicated and inconsistent requirements. It stands to reason that states with more complex permitting and inspection processes see fewer installations as homeowners struggle to reason through the paperwork. Installation companies may struggle too as even different municipalities across a state may set different requirements. 

Some states passed legislation that standardize municipal permitting processes. In California, for instance, Assembly Bill 2188 standardizes municipal residential PV requirements. The bill requires local governments to adopt a “solar ordinance” that conforms to best practices for streamlined permitting of systems 10 kW or less.  The law also obligates municipalities to:

  • adopt a checklist to expedite review;
  • issue permits within 1-3 days;
  • conduct inspections in a timely manner (1-5 days after requested);
  • conduct one inspection for eligible installations;
  • limit the ability of Homeowners Associations (HOAs) to restrict or ban solar systems.

Instead of implementing a streamlined permitting system, Vermont eliminated permitting for systems 5 kW and smaller. Rather than enter a lengthy permitting process, owners must register PV systems with the state and the state will grant a certificate of compliance. After finding initial success in promoting installations, the process was extended to systems up to 15 kW, fostering a 4-fold increase in solar registrations between 2011 and 2014.

In Connecticut, legislature tried to implement a streamlined PV permitting process, yet the bill garnered less support than those enacted in California or Vermont. Connecticut House Bill 6435, “An Act Streamlining The Permitting Process For Residential Solar Photovoltaic Systems,” passed in January 2015 but with language that reduced the law’s stringency. This bill requires municipalities to approve or reject residential PV permit applications within 30 days-- a looser mandate than the original bill’s proposed 10 day requirement. At first glance this may seem like progress but other CT statutes already require a maximum 30 day notification. The substitute bill mandates that system installations be inspected within 30 days, which is significantly more lax than the original proposal of 4 days.  The final bill has Connecticut residents waiting much longer to have their solar installations approved than Californians, and the law does nothing to eliminate steps of the process as the Vermont bill does.

Looking across the pond, Germany’s total installed solar PV capacity, as of 2014, is more than 38 GW (compared to the U.S. total of 18 GW).  Permitting in the U.S. stands in stark contrast to the simple process in Germany, where most permitting for standard residential solar has been eliminated.  Similar to Vermont, Germany requires system owners to submit a single online feed-in tariff registration form.  A building permit may be required depending on local legislation, but in most cases fewer than 10 hours of labor per unit is spent on all permitting, inspection, and interconnection (PII) activities, as compared to 25-30 hours in the U.S.  Permit requests are processed online and do not require fees. In many cases residents have their system installed within one week.

Municipal permitting and solar policies, a key determinant of state solar capacity, directly impact the number of homeowners installing residential PV. Using Connecticut as a test case, the Yale Environmental Performance Index is assessing municipalities based on best solar permitting and supporting policies. The first step to improving Connecticut’s solar landscape is to understand each municipality's strengths and weaknesses in promoting residential PV installation. Replicating successes realized in other states, like California and Vermont, can greatly improve the permitting process in Connecticut municipalities. As there is little variance in the resource (sunshine) across Connecticut, giving community leaders insight into the most successful municipal practices and policies could help guide improvements across the state. Based on the outcome of this project, other town and city councils, clean energy committees, and citizens in other states and regions may implement similar projects which could increase the region and the nation’s solar capacity. 

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Lyndsay Gavin is a first-year Master’s student at Yale School of Public Health, specializing in Environmental Health Sciences.  She can be contacted by email at lyndsay.gavin@yale.edu