Solar Soft Costs Reduction Strategies
An Initiative of the U.S. Climate Alliance
Solar “soft costs” are the non-hardware costs associated with solar energy projects. Soft costs include permitting, interconnection, financing, installation and acquiring new customers. While solar hardware costs continue their rapid decline, soft costs now often make up as much as two thirds of total costs of a project. Reducing softs costs is therefore essential to continued progress in solar deployment and the creation of robust, self-sustaining markets for solar in the U.S.
In January 2018, the federal government enacted import tariffs on solar hardware components including cells and panels, which are forecast to increase the total cost of U.S. solar projects by about 10 percent and reduce installations by 11 percent nationwide. As a result, the tariffs may reduce installed solar capacity by 7.6 gigawatts over the next five years.
│ State Leadership to Date
Many U.S. Climate Alliance states have implemented strategies to support the deployment of solar and reduce soft costs. In one example, New York State, through the NY Sun program, has developed a “Guidebook for Local Governments” with information, tools, and step-by-step instructions to support local governments managing solar energy development in their communities.
│ U.S. Climate Alliance Collaboration
U.S. Climate Alliance states are acting to accelerate solar adoption and soften the impact of the federal solar tariff by collaborating on characterizing and lowering solar soft costs. States are working together to develop a national solar-ready community guidebook to support solar deployment and reduce costs. The guidebook will synthesize existing solar market best practices and lessons learned, provide sample policy and program frameworks, and identify additional key state, federal, and private resources. The guidebook will further provide implementation tools to assist local governments with permitting and inspection, siting, zoning, property taxes, and solar procurement by municipalities. States are planning to deliver the guidebook in the fall of 2018.