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U.S. Department of Energy

Reducing Permitting, Interconnection, and Inspection Costs for Solar Projects

Because permitting processes are all unique for solar projects and installations within distinct jurisdictions, developers must learn about and work with each of these processes separately.

Permitting processes can involve many local, state, and federal entities—each of which has its own requirements for approval. Every distributed photovoltaic (PV) system must receive a permit from the local authority-having jurisdiction (AHJ), and utility-scale systems also often require state and/or federal permits.

Even under the simplest structure, installers must spend time preparing the permit application, submit it to the AHJ for review and then secure the permit  before beginning installation; after installation, the AHJ must send a field inspector to visually inspect the project prior to issuing approval. With more than 18,000 AHJs in the U.S., installers spend an inordinate amount of time and resources learning the permitting and inspection process in a jurisdiction, and tailoring their business processes accordingly. The lack of process standardization across AHJs creates major inefficiencies for installers and for the AHJs.

For utility-scale systems, the process can be vastly more complicated, typically involving environmental reviews that can last years. In many cases, companies must maintain land and other assets on their books for 3-4 years to meet permitting requirements. The permitting processes for transmission alone can take 5-10 years (or longer) for new construction, adding substantial time and expense to new project development.

Following permitting and inspection, a PV system must be connected to the grid by the utility. Interconnection processes differ across states and utility jurisdictions. For residential systems, interconnection typically requires an on-site inspection by a representative of the local utility. Larger commercial systems often require more in-depth interconnection studies to demonstrate that the system will not adversely affect the grid, and utility-scale systems must enter an interconnection queue following procedures set by the Federal Energy Regulatory Commission (FERC) and implemented by transmission providers; this process  takes years to complete.

Costs associated with the permitting, inspection, and interconnection processes can be reduced through streamlining and standardization of requirements and application formats across AHJs and utilities, as well as training of code officials and utility employees. At the transmission level, interconnection queuing processes can potentially be adjusted to give priority to renewable energy generation facilities. For utility-scale systems, permitting costs can be reduced through better strategic siting decisions utilizing improved resource assessment databases, transmission planning tools, and environmental impact analyses that help developers select sites with minimum restrictions, so that obtaining a permit is faster and easier.

By reducing costs and eliminating market barriers, Market Transformation efforts strive to meet the SunShot Initiative goal to make large-scale solar energy systems cost-competitive by 2020.

Market Transformation is addressing permitting, interconnection, and inspection costs through these activities: