COVID-19 has wrought havoc across the nation’s industries, and solar power has been no exception. While discussions about supporting renewable energy typically debate the merits of government intervention, little consideration has been given to existing onerous solar regulations. Slashing these costly regulations could springboard the solar power industry out of its COVID-19 slump and benefit consumers who are looking to make their energy supply greener.
Although the solar power industry has enjoyed steady job growth in recent years, the COVID-19 pandemic and the ensuing economic rout have dealt solar companies a significant blow. According to the Solar Energy Industries Association (SEIA), the industry’s workforce has been reduced to 2014 levels and it is losing jobs at a faster rate than the US economy as a whole.
Meanwhile, 92% of solar companies surveyed by the California Solar & Storage Association (CALSSA) have reported being adversely impacted. As the conversation about how to jumpstart the American economy continues, it is important to consider what can be done to help rooftop photovoltaic (PV) companies—particularly when consumer preferences increasingly favor renewable energy.
The problem, however, is that the solar power policy toolbox is often confined to incentives or mandates to spur PV uptake. While these policies are no-doubt led by good intentions, they induce a variety of negative side effects that time and time again harm low income families. For example, California now requires all new homes to include rooftop solar panels or access to community solar generation. In a state beleaguered by a housing affordability crisis, the mandate makes buying a first home even tougher for low income residents.
Similarly, net metering is another contentious policy that has recently come under increased scrutiny. The policy allows solar panel owners to sell the electricity they produce back to the utilities, and it can be an excellent way to produce and share more renewable energy. However, setting the price for customer-generated electricity above the avoided cost shifts the burden of paying for infrastructure onto poorer households who cannot afford solar panels.
Rather than relying on policies that impose or shift costs among consumers, policymakers should take a close look at the existing regulations that keep the price of rooftop PV systems high. The Department of Energy estimates that 64% of the price of distributed generation solar systems goes to non-hardware or ‘soft’ costs. While the cost of hardware has gradually come down through innovation and technological advances, city and state lawmakers have the power to cut regulatory soft costs with the stroke of a pen.
Slashing onerous regulations to help spur the spread of solar power is by no means a new idea. A well-publicized 2015 article in Energy Policy found that fewer local regulations were associated with lower overall solar power costs, saving consumers $3,200 to $4,700 on a typical 5-kilowatt (kW) residential PV system. Nonetheless, this insight has been overlooked in recent years. Last year, regulators in California voted to impose occupational licensing restrictions to limit who could install the energy storage systems that rooftop solar systems use. These rules, coupled with permitting, zoning, and inspection regulations, all help to keep the price of rooftop PV systems high.
While the economic fallout of COVID-19 continues, the crisis provides a moment to reconsider some of the long-held paradigms that are hindering the growth of renewable energy. Particularly at a time of financial uncertainty, supporting the solar power industry’s rebound should not be at the expense of consumers who are struggling to make ends meet. Slashing onerous regulations would re-energize the solar industry to the benefit of workers, consumers, and the environment.