National Bo S Process Cost Webinar

National “Balance of System Cost” Reduction

Roadmap

Permitting, Inspection, Interconnection

Tuesday January 11th, 2011

Making Solar Happen. Since 2006.

Introductions• Doug Payne Executive Director, SolarTech Co-founder,

Webinar Panel Moderator

• Tom McCalmont CEO McCalmont Engineering

Co-Founder, Board Chair of SolarTech

• Angiolo Laviziano CEO Mainstream Energy / REC Solar

• Ned Harvey COO Rocky Mountain Institute


• Greg Sellers President, Burnham Energy

Greg SellersAngiolo Laviziano

Ned HarveyDoug Payne Tom McCalmont

About SolarTech

Scalable, Local best practices, National impact

Collaborative Consortium

Integrated

Performance

WorkforceInstallation

EERE

CPUC

State level Fed level


Integrated Systematic methods

CPUC : California Public Utility Commission

EERE : Energy Efficiency & Renewable Energy

IREC : Interstate Renewable Energy Council

SEPA : Solar Electric Power Association

SVLG : Silicon Valley Leadership Group

UL: NABCEP:

Underwriters LaboratoriesN.A. Board of Certified Energy Practitioners

Interconnect

FinancingPermitting

Solar America Cities

CPUC

SVLG

EERE

Solar America Cities

Making Solar Happen

Non-Hardware costs now account for over

50% of PV system costs.

Current BoS Process cost curves put $1/W

by 2017 DOE goal(s) at risk

Framing today’s discussion


by 2017 DOE goal(s) at risk

Industry processes lack scalability to meet

US / DOE goals

4

Non-Hardware costs are now > 50%

(SolarABCs, DOE, Navigant)

BoS slope

must get


must get

steeper

<2 yrs

Permitting, Inspection, Interconnection:

Everyone’s problem, no-one’s problem

1

50+ x 3

National Electrical Code (NEC, article 690)

Federal

State State Building Codes (Electrical, Structural, Fire)

18,443 “AHJs” + 3,273 UtilitiesLocalCity Building Codes, Policies,

Making Solar Happen. Since 2006.Proprietary & Confidential

All Rights Reserved www.solartech.org

6

18,443 “AHJs” + 3,273 UtilitiesLocal FERC (Electrical, Structural, Fire, Fees)

Forms, Fees, Rates, are ALL different

AHJs = Authorities Having Jurisdiction

$ $

Impact extends beyond PV into solar thermal, EE, wind, biomass, etc.

DOE is aware of the issues, we need to make it real (data)



DOE baseline costs ($/Wp)

11/2010 Baseline - $5.08, NREL. Permitting work, Inspection, Interconnection is under system design, mgmt, and marketing

Accurate?

Ranges?

Categories?



Not included / unknown:Permit dropouts Permitting delays Multiple tripsInspection failures Interconnection dropouts Interconnection delays

Industry Perspectives - Discussion



9

Solving the Permitting &

Inspection Challenge

• Innovation industries in the U.S. achieved scale demand

driven and without many dependencies.

– Computers � people wanted desktop calculating power

– Cell phones � people wanted personal communications

– Internet � people wanted readily searchable information

• Energy/renewables depend on Old World industries.



• Energy/renewables depend on Old World industries.

– Utilities – 125 years old

– Building codes & permits – 3,800 years old

– Government – 195,000 years old

• These dependencies create barriers to achieving massive

scale quickly.

• We need to invest in a Manhattan Project to dramatically

improve processes so renewable energy can achieve scale.



• Our understanding of the situation in the solar industry

– Achieving scale in manufacturing and installation is the critical path

for driving costs down.

• RMI believes

– There are few if any real long-lasting technology challenges to

achieving Massive Scale in the US Solar industry that won't on their



achieving Massive Scale in the US Solar industry that won't on their

own move faster than the process and regulatory challenges.

• We should

– Develop a logical model we can use which ties all the major steps

required to get to the $1/watt installed to scale and then focus our

discussion on the critical barriers to achieving massive scale in the

solar industry as process related.


Inspection ChallengeThere are two possibilities to decrease BOS cost

• BOS Design Cost – These were dealt with in the $1/Watt workshop.

– Design cost are decreasing steadily.

– Example: Since 2007 design cost for residential mounting structures has come down ~25%

from about $0.22/Watt to around $0.16-0.17/Watt today. Additional savings due to labor

efficiency gains.

– Market forces ensure product and cost innovation



• BOS Process Cost – Focus of SolarTech delegation

– Permitting, interconnection, inspections, etc. which have an impact on material cost as well

as administrative expenses

– Almost completely neglected during the $1/Watt workshop.

– Example: Permitting costs for residential PV have remained relatively stagnant at $.08/watt

on average, with the majority falling between $.05/watt and $.10/watt. For commercial-scale

PV cost have stayed at $.05/watt with the majority falling between $.05 - $.12 /Watt.

– Reducing cost is a time-consuming function of working with numerous (and often financially-

pressed) local government agencies to enable change or re-interpretation of rules and

regulations

– System challenge, making progress very slow without a federal policy champion



• Some examples of BOS process cost that mock $1/ w roadmap dream:

Rules can be Excessive• EG FEMA flood zone issues in the Sacramento area.

– a. Summary: new rule adopted that prohibits any home remodel or addition (including solar) if said

improvement value is greater than 50% of the home’s value (home only, not property).

– b. Sungevity systems valued by generic “non LADWP” appraisal at $7,800 per KW DC and unique in lease terms

vs. purchase.

– Consequence – Any system size above 4KW sold will likely be rejected by local planning department in light of new

rule. Depends on homes value against value of PV system per appraisal terms. Therefore the solar capital is OSA!



rule. Depends on homes value against value of PV system per appraisal terms. Therefore the solar capital is OSA!

Rules are Inconsistent• EG CA Fire Marshall guidelines.

– a. Not uniformly adopted in CA let alone Western States.

– b. Lack of standardization requires significant data base management to keep up with local changes to adopted

guidelines. As a result we’re spending 3x as much on these back office labor costs than installation labor.

Rules can be Crazy-making• EG Home Owner violations, where PV permit held hostage

– El Cerrito CA/ Tiburon CA are famous for this. Upon final PV inspection AHJ requires anything from fire alarms,

service mast securement, water heater earthquake strapping etc be brought up to code by solar contractor.



• Challenge:– Building in most solar regions has slowed to a crawl

– Cities have significantly reduced plan review and inspection staff

– Remaining staff less able to process and inspect solar projects

• Solution 1: Allow installers to use third party plan checkers and inspectors for small PV



checkers and inspectors for small PV – Allows market choice as way to expedite plan review and inspections

– Enables consistent deployment of Solar ABCS level best practices

– Encourages more consistent and verifiable permitting and inspections

– Saves cities money while enabling them to tout their “solar leadership”

– Gives DOE leadership role w/out usurping local control

• Solution 2: Develop Uniform Online Permitting– “Forces” the right solution

– Reduces city staff time

– Improves overall quality of solar design/installation

US Dept of Energy / EERE

Solar Energy Technology Program

Industry Led “Balance of System Process Cost” Roundtable


Proposed Solution Paths

The Solar Industry is unable to manage this

amount of information on its own.

DOE programs can seed industry solutions

18,443 “AHJs” + 3,273 UtilitiesLocal

City Building Codes, Policies, FERC (Electrical, Structural, Fire, Fees)

$ $

Permitting /Inspection Interconnection

Forms, Fees, Rates, are

ALL different



NEC code?NEC code?Fees?Bldg code?Structural?Fire?Planning?Other?

Bldg OfficialsPaperFilesPartial websitesArchivesUndocumentedVaried forms

FeesInterconnectGrid capacitySingle linesSwitch gearUL ratings

Permitting /Inspection Interconnection

Start

here

DOE Can Help:• RFIs / FOAs• Support / inform

broader policies

Permitting/Inspection/Interconnection Roadmap

Element Phase 1

Education

/Awareness

Phase 2

Streamline

(Paper based)

Phase 3A

Streamline

(Online)

Phase 3B

Integrated

(P, Insp, Int)

Phase3C

Solar 3.0

National SolarABCs SolarABCs DOE DOE DOE

VoteSolar VoteSolar SolarTech SolarTech SolarTech

State SACCO SACCO SolarTech SolarTech SolarTech

SolarABCs SolarABCs

Regional Industry/NGO

Partnerships

Industry/NGO

Partnerships

Multiple Multiple Multiple



Partnerships Partnerships

Local DOE / SACCO

effort

DOE / SACCO

Effort

Multiple Multiple Multiple

Industry/NGO

Partnerships

Industry/NGO

Partnerships

•Recommendations•Industry, NGOs, and DOE work together to align National, State, Regional and Local best practices.•A multi-phase roadmap (directive) from Dept of Energy to guide efforts•Measure progress - # of Cities, Counties, States per phase over time

Solution Paths (details)• Phase 1 – Policy Innovation

• Scale, standardize, and drive adoption of initial policy solutions

ie. VoteSolar Project Permit

• Scale adoption of SolarABCs templates to 50% of US market <2 yrs

• Document uniform inspection standards for authorities having jurisdiction (AHJ),

engage at local level to jointly develop stds

• A balanced approach to permitting fees

• Phase 2 – Business Innovation

– One-Stop-Shop for municipal rules, regulations, and building codes, including changes



– Improve consistency in pass/fail criteria, guidance on requirements to ensure

approval, industry held accountable

– Cost recovery “plus” model – Conformance to submittal guidelines in exchange for

higher reliability processes, consistent requirements, and better visibility

• Phase 3 and beyond - Technical Innovation

• Off the shelf solutions, on-line, paperless,

• Online Portals to inform / drive Federal, State, Local policy

• Integrate Permitting, Inspection, Interconnection requirements, pass/fail criteria

• Automation through the application of able software tools, applications, and systems

based on open architectures across Cities, Utilities, and Industry18

Costs, Benefits, Impacts, Priorities• SolarTech and RMIs work indicate BoS Soft Costs - "Current Non-Hardware BoS

Process costs account for up to $0.98 / W" ?

• Is this High, Low, within +/- 5%, other?

• For your business, approx. what % of the following can be directly attributed to delays in

the Permitting, Inspection, or Interconnection processes or variability of these processes:

• Engineering overhead, sunk time

• Inventory, idle crews, trucks, etc

• Mobilization or Wait time forcing internal cost absorption

• Milestone risks – ITC, MACRS, rebate payment, rebate carrying cost

• Legal / financial risk due to liquidated damages caused by project delays



• Legal / financial risk due to liquidated damages caused by project delays

• Opportunity Cost (Consumer impact, lower sales, etc)

• Can you prioritize the following possilbe solutions from Lowest to Highest (Urgent)?

• A central entity or clearing house of municipal rules, regulations, and building codes –

a one stop-shop including up to date changes on legislation

• Document uniform inspection standards for authorities having jurisdiction (AHJ) –

Engage with local government to jointly develop standards

• Off the shelf solutions, on-line, paperless, with a strong incentive for increased

consistency in requirements, forms, coordination on a regional level

• Scale adoption of SolarABCs templates to 50% of the US market <2 yrs

• Consistency in pass/fail criteria and reqts to ensure safe, predictable approvals19

Industry Value Proposition

•Scalable, open access to Permitting, Inspection, Interconnection information drives out 50-60% of process related costs

•Enables Private/Public workflow driven cost reductions for PV

1-3 years

• 50% less paper

• 40% faster

3-5 years

• 75% less paper

• 75% faster

5-7 years

• Paperless

• Support $1/Wp

5-7 years is Too Late



• 40% faster projects

• Distributed PV

• 75% faster projects

• Add Solar Hot Water, EE, Wind

• Support $1/Wpadoption curves

• Add other RE, Vehicle to Grid

BoS Non-Hdwr costs

(Distributed PV)

(Permitting, Inspection,

Interconnection,SG&A)

$0.98 / W $0.56 / W $0.43/ W

Time for a Paradigm Shift

$/W

2005 – 2010 “Cost”

2011 – 2015“Speed”



$/W

Watts.P.H.

1GW

Next Steps• Get Engaged

• Review solution(s) presented

• Complete survey no later than 1/21

http://www.surveymonkey.com/s/MV7QJGP

– Accuracy of BoS Soft Costs estimates

– Prioritize the various "Solution Paths“ presented today

• Get Involved



• Get Involved

• Sign-On to “DOE Letter” (email to follow) 1/28

• “National BoS Process Cost Webinar” - Results 2/22

• Collaborate on solutions March 29, 30

2011 Solar Leadership Summit 2011 Solar Leadership Summit

www.solartech.orgwww.solartech.org

SolarTech gratefully acknowledges• Our panel, and “DC Need for Speed Delegation” in supporting this National BoS Process cost reduction effort



• Outreach partners for this National BoS Process cost reduction effort

23

Thank You!Doug Payne

Executive Director, SolarTech

www.solartech.org

[email protected]

Please join and support SolarTech

www.solartech.org



Resources

• Permitting

• SolarTech http://solartech.org/initiatives/permitting

• SolarABCs http://solarabcs.org/

• Vote Solar http://votesolar.org/city-initiatives/project-permit/

• Bay Area C.C. http://svlg.net/campaigns/bacc/

• BoS Process Research, Rocky Mtn. Institute www.rmi.org

• Cost learning curve www.navigant.org

National Bo S Process Cost Webinar

Documents

Transcript of National Bo S Process Cost Webinar