Solar costs fall for homeowners, but frustrating red tape is on the rise

At a recent panel discussion put on by The Indus Entrepreneurs, everyone agreed that the residential solar-panel market will grow by leaps and bounds in 2009 and 2010. I blogged about the possibility that wholesale solar panel prices in residential actually might rise again as a result of demand, which a couple of larger analyst shops have verified.

Unfortunately, the red tape appears to be growing right along with the market. Prominent installers and energy integrators in this market are voicing increasingly pointed complaints that state and municipal governments and Uncle Sam are layering on onerous paperwork requirements and permit processes for something that should be much faster and simpler.
Solar for Just $2.50 Per Watt...

Take the case of Barry Cinnamon, CEO of Akeena Solar, a prominent Silicon Valley solar-systems installation and integration company. Cinnamon started Akeena after his neighbors asked him how he had managed to put solar panels on his roof eight years earlier. He built an instructive website and, eventually, a growing installation business for residential and light commericial solar needs. Akeena's Andalay package cuts the required installation time, integrating more parts and using other efficient processes that make solar panels sleeker, light, more stable and less prone to failure.

With prices for residential solar panels still falling on the retail market, Akeena is seeing high demand from homeowners and home developers who want to put alternative energy on their roof. And material costs for panel installations have fallen from $4.50 per watt in previous years to $2.50 per watt -- and lower -- in 2009, Cinnamon says.

And innovations in panel designs, like Andalay, have helped Cinnamon reduce his labor costs from $2.50 per installed watt to a mere 50 cents. "Sometimes, we can even get to zero, because our products are getting close to being self-installation jobs," he says.

...But Too Much Paperwork

In fact, the only cost item going up for Cinnamon is his overhead. Translation: paperwork. "When I put in my first system in 2001, I only had to do 50 pages of paperwork," he says. "But a recent system I put in for a San Francisco client required 148 pages of paperwork. We employ more people doing overhead tasks than ever before."

Cinnamon sees his overhead costs as the only part of his business that's actually increasing. And that's not good, particularly in comparison to places such as Germany, where paperwork for residential installations usually maxes out at five pages, Cinnamon says. "Over there, it's one architectural drawing and a one-page feed-in tariff application to sell power back to the utility."

I have to concur with his assessment. In looking into getting a solar panel installed on the roof of my home, I had to make several calls and conduct hours of research online to even start to understand the tax credits, financing options, the types of panels I could use and whether I could sell any of the power I generated back to the utility.

Part of this, I'm sure, is that this is a new process and it remains in flux. But if the various levels of government and the utilities wanted to really juice adoption of solar and other alternative-energy technologies, they would streamline regulations and processes to make it easier to fast-track these types of residential installations.

In reality, putting solar panels on a roof is not terribly different from knocking a hole in a wall for a door. Running panels to sell back into a utility grid does require more coordination, but not an enormous amount. This should really be something that anyone can buy at Home Depot and put on their roof -- and get the proper tax credits without hiring an accounting team to hold their hand through the process.

Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at
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