Exploring the impact of permitting and local regulatory processes on residential solar prices in the United States

• We show local regulatory processes meaningfully affect U.S. residential PV prices.
• We use regression analysis and two mechanisms for “scoring” regulatory efficiency.
• Local permitting procedure variations can produce PV price differences of $0.18/W.
• Broader regulatory variations can produce PV price differences of $0.64–$0.93/W.
• The results suggest the cost-reduction potential of streamlining local regulations.

This article statistically isolates the impacts of city-level permitting and other local regulatory processes on residential PV prices in the United States. We combine data from two “scoring” mechanisms that independently capture local regulatory process efficiency with the largest dataset of installed PV prices in the United States. We find that variations in local permitting procedures can lead to differences in average residential PV prices of approximately $0.18/W between the jurisdictions with the least-favorable and most-favorable permitting procedures. Between jurisdictions with scores across the middle 90% of the range (i.e., 5th percentile to 95th percentile), the difference is $0.14/W, equivalent to a $700 (2.2%) difference in system costs for a typical 5-kW residential PV installation. When considering variations not only in permitting practices, but also in other local regulatory procedures, price differences grow to $0.64–$0.93/W between the least-favorable and most-favorable jurisdictions. Between jurisdictions with scores across the middle 90% of the range, the difference is equivalent to a price impact of at least $2500 (8%) for a typical 5-kW residential PV installation. These results highlight the magnitude of cost reduction that might be expected from streamlining local regulatory regimes.