Solar “soft costs” are the non-hardware costs associated with deploying new solar energy projects: permitting, zoning compliance, grid interconnections, financing and taxes, labor and installation costs, and new project identification. While overall solar system costs are declining, soft costs have remained steady and make up an increasing proportion of system costs, particularly in the residential sector. At the start of 2018 soft costs accounted for 63% of new residential system costs, rising to 66% in the first quarter of 2019.
Addressing these soft costs is vital to reducing the overall cost of solar and increasing adoption of this technology. A 2018 report from the National Renewable Energy Laboratory made this clear, by examining pathways to reduce residential PV costs. Their four largest cost saving actions are focused on soft costs, and 65% of their modeled savings are from soft cost reductions. Furthermore, in Q3 2019 (the most recent quarter with complete data), residential PV installations hit record highs with 713 MW installed. It was the only segment of the solar market still growing, demonstrating value that reduced soft costs could bring to entire solar sector.
To address this challenge, NASEO has teamed up with the U.S. Climate Alliance to examine ways to reduce soft costs through the “Solar Deployment Guidebook.” Across the U.S. there are 18,000 unique jurisdictions, all with the potential to regulate solar installations independently. Thus, progress is needed to educate and coordinate between regulators and policymakers in order to create a consistent, predictable, and scalable market for solar developers to operate within. The pages linked below provide information on regulatory, procedural, and policy barriers that increase soft costs, highlight efforts by states and municipalities to ease the burden on solar developers, and provides links to additional resources.