DOE Makes Strides in Reducing Solar-Energy Project Costs

As part of the Obama administration’s SunShot Initiative to make solar energy cost-competitive with fossil fuels within the decade, U.S. Energy Secretary Steven Chu announced the availability of more than $27 million in new funding that will reduce the nonhardware costs of solar-energy projects, a critical element in bringing down the overall costs of installed solar-energy systems.

The funding will support a $12.5 million challenge to encourage cities and counties to compete to streamline and digitize permitting processes, as well as $15 million that will be made available to advance innovations in information technology systems, local zoning and building codes and regulations, and more. These process improvements and innovations will help increase U.S. competitiveness in the global solar industry and will play an important role in achieving President Obama’s goal of doubling America’s electricity from clean-energy sources.

“These investments under the SunShot program can help to transform the solar-energy industry by addressing significant challenges to solar-energy deployment, including permitting and installation,” Chu said. “Innovations in IT and local business processes, such as online permit applications, can deliver significant savings for solar-energy systems and will help America to compete globally in this growing market.”

Both funding opportunities focus on reducing “nonhardware balance of system” costs, which generally refer to the costs of installing solar systems not associated with the solar panels, mounting hardware, electronics, etc. These “soft costs,” including the capital required to pay for siting, permitting, installation, and the cost of connecting the systems to the grid, can represent up to 40 percent of the total cost of the solar-energy system.

Under the Rooftop Solar Challenge, which will receive up to $12.5 million, local and regional government teams can compete for funds to help eliminate administrative barriers to residential and small commercial photovoltaic solar installations and improve the availability of financing for solar projects. This challenge incentivizes local governments to develop innovative solutions in four key areas: Standardizing permitting processes, updating planning and zoning codes, improving interconnection and net metering standards, and increasing access to financing.

The balance of system costs funding opportunity, which will receive up to $15 million over three years, will create tools that local governments can use to streamline and expedite the process of installing solar energy. The Department of Energy will fund one or more recipients under each of the topic areas: codes, standards and processes; software design tools and databases; and regulatory and utility solutions.

Details of the solicitation and challenge, eligibility requirements and application instructions can be found on For more information on the SunShot Initiative, visit

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