President Obama laid down a bold challenge to America in his State of the Union speech last week: get to 80% clean energy by 2035. Clean energy is a deliberately vague goal, since it will likely include nuclear, natural gas and (not really existing) clean coal in the mix. But traditional renewable energy like wind and solar will need to be a big part of the American clean energy transition Obama is planning. In a speech at NDN today (which used to stand for New Democrat Network but now stands for…nothing, as far as I can tell), Democratic Senator Jeff Bingaman of New Mexico reiterated his support for Obama’s energy goals, and raised hopes that a bill with a clean energy standard might be resurrected in this Congress. (Bingaman last year pushed a bill focused on a national renewable energy standard, but with much of the legislative focus placed on a carbon cap bill, Bingaman’s work never earned much momentum.) But he warned that it won’t be easy. “Perhaps no topic garnered more scrutiny during the 2009 markup in our committee than the renewable electricity standard,” he said.
But there’s a lot more holding back renewable power in the U.S. than gridlock in Congress. One of the biggest obstacles to scaling up solar power in particular is regulation—not just from the federal government, but at the state, city and even community level. Rules on installing solar systems differ from town to town, and the work of researching and filling out permits adds to the cost of solar power across the country. According to a study by the solar installer SunRun, struggles over permits adds an average of $2,500 to the costs of each solar installation—while an effort to streamline regulations could provide a $1 billion stimulus to the residential and commercial solar markets over the next five years. “The costs to the solar market are really staggering,” says Ed Fenster, CEO of SunRun.
SunRun compared U.S. regulations to those in more friendly markets for solar, like Germany and Japan. They found that Germany—which has more streamlined regulations for solar installation, as well as more generous government subsidies—keeps solar installation costs 40% lower than those in the U.S. Not coincidentally, one million new homes have gone solar in Germany over the past two years, while only about 80,000 homes in total have solar in the U.S. “Regulation is a major issue that’s holding us back,” says Lyndon Rive, the CEO of SolarCity, a major California-based solar installer.
SolarCity’s experience is constructive. The company—which coves solar installation from design to financing to monitoring—has grown at a healthy clip, employing over 1,000 people and expanding from its base in California to Maryland and Washington, DC. But Rive says that the variety of regulations for solar installation are a major bottleneck on growth. It takes SolarCity a few days at most to actually install a solar system, but it often takes two to three months, if not longer, to get the permits and other preparations ready. If you’re trying to make solar a significant part of the American energy supply—currently it makes up far less than 1% of total U.S. power—red tape isn’t helping. “The wait incurred is annoying and it adds to costs overall,” says Rive.
SunRun has shared the report with the Department of Energy and the White House, and the company is urging the federal government to create incentives that would push towns and cities to adopt common codes and fees for solar installation—something countries like Germany and Japan already do. The report argues that such permit standardization could make solar cost competitive for half the homes in the nation within two years. “At some level this is all about local and state governments, but the federal government can nudge things,” says Fenster. “This could drive an economy of scale.”
Still, good intentions on the national level don’t always translate to the community, where parochial concerns sometimes win out. (Witness the fight over smart meters in California, which some libertarians on the right and some ultra-greens on the left have opposed over liberty and health fears.) And as important as smoother regulations are, a broad national energy policy is needed to really jump-start solar and other renewables—but climate still remains a divisive political subject. (Just look at Republican Senator John Barrasso’s new bill, which would block greenhouse gas regulations under the Clean Air Act, the Clean Water Act, the National Environmental Policy Act and the Endangered Species Act.) The least we can do now is pull the red tape off our solar panels.