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Exploring the link between project delays and cancelation rates in the U.S. rooftop solar industry

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  • Cook, Jeffrey J.
  • Cruce, Jesse
  • O'Shaughnessy, Eric
  • Ardani, Kristen
  • Margolis, Robert

Abstract

About 1 in 10 rooftop solar photovoltaic (PV) customers who sign a contract to install a PV system cancel their contract before the system is installed. Although some cancelation risk is inherent in the solar industry, there may be ways to reduce cancelation volume, such as reducing project delays. Delays can occur at each stage of PV adoption processes, which take several weeks to months from contract signature to system operation. Using data from a recent survey of PV installers, we explore the factors that explain PV project delays and cancelations. The survey data suggest that PV adoptions take about 16 weeks, on average, from contract signature until system operation. Survey respondents consistently identified permitting, inspection, and interconnection (PII) processes as key drivers of project delays. Most respondents then suggested these PII-related delays increase contract cancelations. However, larger-scale installers report higher cancelation rates, and these installers rank changes in customer financial situations higher than PII-related delays as the main cause for cancelations. Most respondents also reported avoiding jurisdictions with particularly onerous PII requirements or charging more in these jurisdictions. On balance, the results provide a rationale for measures to streamline PII processes to reduce delays and potentially mitigate cancelation risk.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:enepol:v:156:y:2021:i:c:s0301421521002913
    DOI: 10.1016/j.enpol.2021.112421
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    1. 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).

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