The impact of city-level permitting processes on residential photovoltaic installation prices and development times: An empirical analysis of solar systems in California cities

With “soft” costs accounting for well over 50% of the installed price of residential photovoltaic (PV) systems in the United States, 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 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 3000 PV installations across 44 California cities in 2011. Results suggest that cities with the most favorable 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 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.