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The Impact of City-level Permitting Processes on Residential Photovoltaic Installation Prices and Development Times: An Empirical Analysis of Solar Systems in California Cities

The Impact of City-level Permitting Processes on Residential Photovoltaic Installation Prices and Development Times: An Empirical Analysis of Solar Systems in California Cities

Full Title: The Impact of City-level Permitting Processes on Residential Photovoltaic Installation Prices and Development Times:  An Empirical Analysis of Solar Systems in California Cities
Author(s): Ryan Wiser and Changgui Dong
Publisher(s): Ernest Orlando Lawrence Berkeley National Laboratory
Publication Date: April 1, 2013
Full Text: Download Resource
Description (excerpt):

Business process or “soft” costs account for well over 50% of the installed price of  residential photovoltaic (PV) systems in the United States, so understanding these costs is  crucial  for  identifying  PV  cost‐reduction opportunities.  Among  these  costs  are  those   imposed by city‐level permitting processes, which may add both expense and time to the PV development process. Building on previous research, this study evaluates the effect of   city‐level permitting processes on the installed price of residential PV systems and on the   time required to develop and install those systems. The study uses a unique dataset from   the U.S. Department of Energy’s Rooftop Solar Challenge Program, which includes city‐level   permitting  process  “scores,”  plus  data  from  the  California  Solar  Initiative  and  the  U.S.   Census. Econometric methods are used to quantify the price and development‐time effects of city‐level permitting processes on more than 3,000 PV installations across 44 California   cities in 2011. Results indicate that city‐level permitting processes have a substantial and   statistically significant effect on average installation prices and project development times.   The results suggest that cities with the most favorable (i.e., highest‐scoring) permitting   practices can reduce average residential PV prices by $0.27–$0.77/W (4%–12% of median PV prices in California) compared with cities with the most onerous (i.e., lowest‐scoring)   permitting  practices,  depending  on  the  regression  model  used.  Though  the  empirical   models for development times are less robust, results suggest that the most streamlined   permitting practices may shorten development times by around 24 days on average (25%   of  the  median  development  time).  These  findings  illustrate  the  potential  price  and   development‐time benefits of streamlining local permitting procedures for PV systems.

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