Reducing bureaucratic barriers could raise the US rooftop solar adoption by 155%, adding 198.1 GW by 2040, says Permit Power
Currently, rooftop solar in the US costs up to 7× higher than in Australia or Germany due to a higher share of soft costs
Permitting and other non-hardware expenses make up 78% of total system costs, limiting affordability, it points out
Streamlined permitting and inspections could save families $56,000 over 25 years and $1.2 trillion nationwide
Permit Power, a US-based research and advocacy non-profit, estimates that cutting red tape in the country could boost rooftop solar installations by 155%, with 18.2 million more families adopting it by 2040. Representing a combined 198.1 GW more rooftop solar capacity, it could translate into $245 billion in cumulative savings for families.
In a new report titled As Cheap as Our Peers: How cutting red tape can lower the cost of rooftop solar and offset rising utility bills, Permit Power says that installing rooftop solar in the US is up to 7 times more expensive than in Australia or Germany. Major contributors to this are the bureaucratic hurdles, outdated permitting systems, and patchwork rules that drive up costs and slow adoption.
Currently, American families pay around $28,000 for a 7 kW system, which would cost $4,000 in Australia and $10,000 in Germany – a difference of $18,000 to $24,000. “These unnecessary costs are locking millions of households out of cheap energy,” point out the analysts, and keeping 1 in 7 households in energy poverty.
As Section 25D residential tax credits expire at the end of 2025 under the One Big Beautiful Bill Act (OBBBA), residential solar will become even more expensive.
According to the Permit Power report, OpenSolar counts 78% of the total installed cost for residential rooftop solar as soft costs, which comprises non-hardware components such as design, project management, sales, permitting, inspections, and interconnection. This makes rooftop solar more expensive despite hardware costs having declined ‘precipitously’ in recent decades.
“The aggregate impact of permitting alone—counting both direct and indirect costs—was estimated at one dollar per watt for residential systems in 2019 and has not changed much since. With total installed cost estimates ranging from $3 to $5 per watt, this represents 20 to 33 percent of the cost of the system, or $6,000 to $7,000 for an average residential system,” reads the report.
Relatively simple bureaucratic reforms can help unlock $56,000 for an average family over the 25-year lifetime of the rooftop system, leading to $1.2 trillion in savings across all families installing solar. It is also more beneficial in states such as California and New York that have high electricity prices.
“Aside from shorter payback periods, on average, a family installing solar and batteries will see their annual bills decline 61% by 2040,” it adds. This translates into average annual savings of $1,600.
The report recommends instant online permitting for standard residential systems, allowing remote inspections of completed projects, reducing repeat visits and truck rolls, standardization of inspections to focus on the most important components, such as solar and battery systems that are directly related to safety, and streamlining interconnection for standard residential projects as policy options to boost installations.
“Our report presents policy solutions that should be implemented on the state level to lower the cost of home solar and batteries by slashing unnecessary red tape, and making the cost savings of rooftop solar accessible to more American families,” says Permit Power CEO and Founder, Nick Josefowitz.
The complete report can be downloaded for free from Permit Power’s website.
