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Exploring the impact of permitting and local regulatory processes on residential solar prices in the United States

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  • Burkhardt, Jesse
  • Wiser, Ryan
  • Darghouth, Naïm
  • Dong, C.G.
  • Huneycutt, Joshua

Abstract

This article statistically isolates the impacts of city-level permitting and other local regulatory processes on residential PV prices in the United States. We combine data from two “scoring” mechanisms that independently capture local regulatory process efficiency with the largest dataset of installed PV prices in the United States. We find that variations in local permitting procedures can lead to differences in average residential PV prices of approximately $0.18/W between the jurisdictions with the least-favorable and most-favorable permitting procedures. Between jurisdictions with scores across the middle 90% of the range (i.e., 5th percentile to 95th percentile), the difference is $0.14/W, equivalent to a $700 (2.2%) difference in system costs for a typical 5-kW residential PV installation. When considering variations not only in permitting practices, but also in other local regulatory procedures, price differences grow to $0.64–$0.93/W between the least-favorable and most-favorable jurisdictions. Between jurisdictions with scores across the middle 90% of the range, the difference is equivalent to a price impact of at least $2500 (8%) for a typical 5-kW residential PV installation. These results highlight the magnitude of cost reduction that might be expected from streamlining local regulatory regimes.

Suggested Citation

  • Burkhardt, Jesse & Wiser, Ryan & Darghouth, Naïm & Dong, C.G. & Huneycutt, Joshua, 2015. "Exploring the impact of permitting and local regulatory processes on residential solar prices in the United States," Energy Policy, Elsevier, vol. 78(C), pages 102-112.
    • Handle: RePEc:eee:enepol:v:78:y:2015:i:c:p:102-112
    DOI: 10.1016/j.enpol.2014.12.020
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    Cited by:

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    3. White, Lee V., 2019. "Increasing residential solar installations in California: Have local permitting processes historically driven differences between cities?," Energy Policy, Elsevier, vol. 124(C), pages 46-53.
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    5. John Byrne & Job Taminiau & Kyung Nam Kim & Joohee Lee & Jeongseok Seo, 2017. "Multivariate analysis of solar city economics: impact of energy prices, policy, finance, and cost on urban photovoltaic power plant implementation," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 6(4), July.
    6. Hsu, Jenneille Hwai-Yuan, 2018. "Predictors for adoption of local solar approval processes and impact on residential solar installations in California cities," Energy Policy, Elsevier, vol. 117(C), pages 463-472.
    7. Neij, Lena & Heiskanen, Eva & Strupeit, Lars, 2017. "The deployment of new energy technologies and the need for local learning," Energy Policy, Elsevier, vol. 101(C), pages 274-283.
    8. Kenneth Gillingham, Hao Deng, Ryan Wiser, Naim Darghouth, Gregory Nemet, Galen Barbose, Varun Rai, and Changgui Dong, 2016. "Deconstructing Solar Photovoltaic Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    9. O'Shaughnessy, Eric & Nemet, Gregory F. & Pless, Jacquelyn & Margolis, Robert, 2019. "Addressing the soft cost challenge in U.S. small-scale solar PV system pricing," Energy Policy, Elsevier, vol. 134(C).
    10. Liu, Zhengguang & Guo, Zhiling & Chen, Qi & Song, Chenchen & Shang, Wenlong & Yuan, Meng & Zhang, Haoran, 2023. "A review of data-driven smart building-integrated photovoltaic systems: Challenges and objectives," Energy, Elsevier, vol. 263(PE).
    11. Strupeit, Lars, 2017. "An innovation system perspective on the drivers of soft cost reduction for photovoltaic deployment: The case of Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 273-286.
    12. O'Shaughnessy, Eric & Dong, Shiyuan & Cook, Jeffrey J. & Cruce, Jesse & Ardani, Kristen & Fekete, Emily & Margolis, Robert, 2022. "Effects of local permitting and interconnection requirements on solar PV installation durations," Energy Policy, Elsevier, vol. 161(C).
    13. O'Shaughnessy, Eric & Barbose, Galen & Wiser, Ryan, 2020. "Patience is a virtue: A data-driven analysis of rooftop solar PV permitting timelines in the United States," Energy Policy, Elsevier, vol. 144(C).
    14. Cook, Jeffrey J. & Cruce, Jesse & O'Shaughnessy, Eric & Ardani, Kristen & Margolis, Robert, 2021. "Exploring the link between project delays and cancelation rates in the U.S. rooftop solar industry," Energy Policy, Elsevier, vol. 156(C).
    15. Neij, Lena & Nemet, Gregory, 2022. "Accelerating the low-carbon transition will require policy to enhance local learning," Energy Policy, Elsevier, vol. 167(C).
    16. Bossink, Bart, 2020. "Learning strategies in sustainable energy demonstration projects: What organizations learn from sustainable energy demonstrations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    17. Strupeit, Lars & Neij, Lena, 2017. "Cost dynamics in the deployment of photovoltaics: Insights from the German market for building-sited systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 948-960.
    18. Wiggins, Seth, 2016. "It’s All Local? How Sub-State Policies Affect Western US Residential Solar Adoption," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235667, Agricultural and Applied Economics Association.
    19. Barbrook-Johnson, Peter & Tankwa, Brendon, 2023. "Increasing inequality between countries in key renewable energy costs," INET Oxford Working Papers 2023-20, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.

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