Hey, I know the acronyms: DER, VPP, REC, FEOC, SMART, FRCEC, PPA, ESHEP…

I recently went through the process of reviewing options for a 12.32 kW Solar Electric System with a long established and highly reputable solar installation service. The plan was to use the double bay garage’s roof, with its excellent orientation and great sun exposure. There was also an alternative proposal was for 12.72kW ground mount. Both proposals had a two-battery backup component. The systems were oversized, but reasonably so, since an EV charger was likely to be added and there is some thought about replacing the oil-fired hot air heating system with a big heat pump system, or possibly simply add on the heat pump to the existing furnace for a “dual-fuel” heating/cooling system. In Massachusetts, the net metering deal is strong, basically providing credit at or near the full kW supply price, so any excess solar generation could be uploaded to the grid, and when most needed by the grid at that, thanks to the double battery storage capacity. A secret desire was that this system would be attractive as a distributed energy resource aggregator, should a virtual power plant management system appear.

Unfortunately, even after all the fussing and brainstorming efforts, the bottom line was that the bottom line was too damn high. Electricity rates will no doubt continue to rise and forever so, apparently, and the economic argument from this is compelling, even as the climate mitigation benefits are significant. With me, you’d be hard-pressed to find another person with greater motivation to go solar. But the home solar industry is fragmented and scattered, so inefficiencies in the purchase and installation process make my acquisition too darn expensive.

Where’s all the Tax Credits?

I know how to read a proposal and to spot upfront costs and comprehend the Renewable Energy Credits estimated payback. I understand the $1,000 Massachusetts tax credit, although this is only a credit on Massachusetts income tax that covers 15% of the costs, up to $1,000, but I’m retired, and my state income tax will likely be low enough and I’d likely not enjoy much of an offset.

Federal Residential Clean Energy Credit doesn’t apply to my situation, since there’s no way the solar projects will be installed and inspected before December 31, 2025, and besides, there’s not much in the way of taxable income, other than to draw down some chunk of my modest retirement IRAs, which carry some significant capital gains that under the late IRA (the Inflation Reduction Act, that is—confused yet?) would have provided a 30% federal tax credit. And then there’s the issue of the Foreign Entity of Concern running out the clock when it comes to equipment that has been “safe-harbored” or paid for before the end of 2025 and therefore exempt from FEOC restrictions, which begin on January 1, 2026. That is likely not a big issue given the equipment listed in the solar proposals I’d been pouring through. And I have no interest in leases and PPAs, even though the federal tax credit under the 48E provision will continue for residential leases and power purchase agreements through 2027.

So, boo-hoo when it comes to federal largesse and the Massachusetts help ain’t great either.

Still, Massachusetts has some other attractive conditions. A few days back, Massachusetts’s new SMART 3.0 Program for renewable energy credits (RECs) went into effect. There’s a fixed incentive payment component for systems 25 kW AC or smaller, where a new flat rate incentive is paid directly by the utility company for 20 years and designed to compensate the system owner for the RECs, which are retained by the utility. There is for at least next year a cap on 900 MW of statewide capacity, but there’s no cap for behind-the-meter projects smaller than 250 kW AC, which fits me, so this keeps me in the deal. The cap itself comes into effect only if Massachusetts puts up more than 900MW of any and all types of solar, and this seems unlikely, given that only 472 megawatts (MW) of solar was installed in 2024, partly due to permitting and interconnection issues, and those issues haven’t been resolved for 2025… or 2026 and onward, all too likely. Smart 3.0 does have a battery storage bonus in the form of higher compensation rate for systems that include energy storage, so that could be a modest cost help. There are a few more benefits from Massachusetts for home solar projects, including a property tax exemption preventing the property tax from including the increased value of their home from a solar system for 20 years. There’s a sales tax exemption, too, where solar energy equipment is completely exempt from the 6.25% state sales tax.

One of the best aspects of home solar in Massachusetts is that many residential customers can receive full retail rate credits for excess solar electricity sent to the grid. And if you have a battery, you can participate in a utility-managed demand response program to get paid for allowing your utility access to your stored power during peak hours, although there are hoops to jump through and specific system equipment requirements. There is even an attractive energy-saver home loan program that provides a 2% loan rate for income-qualifying residents. I can’t help but think of California’s full-on retreat from competitive net metering in the last year or two, so Massachusetts’s great electricity market credit rate could disappear in any future legislative year.

Unfortunately, none of these incentives are enough. The rent’s too damn high, except, of course, I mean the solar system is too expensive, and that’s with the 6.25% sale tax avoidance on the vendor’s purchase of the equipment for the proposed projects, too. The project is too expensive even with the “family and friends” discount that’s available to me, and this is a sizable savings, but also none of your business about who knows who.

It isn’t that the company’s proposals are not competitive. It is a very good company and the equipment is top tier.

Why, Why, is Solar so High?

So why is solar power for homes—whether ground mount or rooftop—so expensive here? And when I say “here,” I mean not just Massachusetts, but more broadly, the U.S.

One part of that answer is that there are too many regulations and too few people—or none—empowered to use their judgement, so every project has to be figured out and labored over solar being unnecessarily  bespoke.

I’m sorry to hear about National Fire Protection Association regulations that not only get my libertarian hackles up but some of the regulations are also annoying for my particular situation, which is a one story roof that is easily accessible by modest step ladder. The NFPA spacing requirements surrounding the panel footprint means I have fewer panels there and that I have to find additional mounting solutions, say, on part of the house’s roof. Or, of course, I could extend the panels beyond the garage’s roof’s ridge using a modified ground mount system, but that would require involving an engineer, never mind that the raised mounting structure is already well-understood and vetted by engineers, but the roof attachment points is a different use and so would need its own sign-off.

All of which feeds my conclusion that it is just too expensive for home solar, even while the market is crying out for less costly solutions. There are many factors that lead to high costs, including customer acquisition costs, costs I helped raise further recently by seeking a solar and battery system for the house, but which ended up coming in at too high a price, so no sale.

As usual, I have Gemini research and synthesize complex problems, and I did so with the question of home solar costs. The resulting report is titled, “The American Solar Cost Paradox: Analyzing the Soft Cost Drivers and Policy Barriers to Affordable Residential PV in the U.S.”

Here’s the Executive Summary:

The analysis of residential photovoltaic (PV) system costs in the United States reveals a profound structural inefficiency, resulting in installed prices that are conservatively three to five times higher than those observed in mature global solar markets such as Australia. The core finding is that the primary driver of this high cost is no longer hardware, but a suite of non-hardware, or “soft,” costs that account for approximately 55% of the total system Capital Expenditure (CAPEX).

This price premium is attributable to a trifecta of systemic inefficiencies endemic to the decentralized U.S. regulatory and commercial environment: exorbitant Customer Acquisition Costs (CAC), fragmented and time-intensive Permitting, Inspection, and Interconnection (PII) procedures, and opaque financing structures embedding high dealer fees. While U.S. PV systems are benchmarked to cost between $2.70/W and $4.40/W, the majority of this cost is administrative overhead and profit padding necessary to sustain high sales volume and navigate regulatory friction.

Key quantitative findings underscore the problem: CAC can consume up to 25% of the total installation cost, while PII friction alone adds approximately $1.00/W. Furthermore, solar-specific loan products frequently inflate the consumer’s principal by 30% or more through hidden dealer fees.

To achieve competitive pricing and unlock mass market adoption, the report concludes that policy must pivot toward mandating the standardization of PII processes (e.g., universal adoption of SolarAPP+) and establishing rigorous regulatory oversight of point-of-sale financing transparency. Absent these structural reforms, the U.S. residential solar market will continue to operate with a substantial, unjustified cost premium, hindering the nation’s energy transition goals.

“Absent these structural reforms, the U.S. residential solar market will continue to operate with a substantial, unjustified cost premium, hindering the nation’s energy transition goals,” is not a sentence that speaks well for a home-based effort to contribute clean energy to the cause of climate change. Since the systems I was specing out included battery storage, I ran another analysis and ended up with a report titled “The Residential Energy Storage Cost Equation: Applying PV Cost Benchmarks to Deconstruct U.S. Home Solar + Storage Economics.”  You’ll find some differences with battery’s cost factors relative to solar, but there’s a lot of overlap, too. For example, “Regulatory Friction Multiplier,” comes up, albeit in this form of AI-speak.

Assault on Batteries?

The battery cost analysis for home solar is interesting reading. My main takeaway is the common requirements in permitting, inspection, safety, and interconnect need to be normalized across markets, just like with solar. Having different requirement demands with batteries across thousands of municipalities and state agencies makes any home solar with battery installation that much more expensive because the installation job is always a custom job.

I also came away with questions on safety, and mainly in terms of Australia’s home solar safety record versus the U.S. record, mainly because Australia’s solar and home solar/battery project costs are so much cheaper than ours. I threw in a couple of U.E. countries for the fun of it, in a report titled, “Comparative Analysis of Residential Solar and BESS Safety Regimes: United States, Australia, Denmark, and Germany.”

Here’s that takeaway: Australia has a worse record and America has a more thorough set of safety standards and regulations and permitting requirements. The E.U. has a solid safety record and a somewhat less complicated regulatory environment, but basically, no one has really gotten home solar/battery projects down smooth. The good news is that the Australia’s worst record for safety is still pretty darn good, with their main failing in the area of power disconnection requirements. Other issues include different product quality control/testing approaches.

Among these countries, battery placement is all over the place: in basements, outside, or interior (with vents). By the way, I planned on putting the batteries on the outside of the garage, after building a fire-resistant weatherproof enclosure, which would be another expense, of course.

Will We Ever Be Normalization?

There are proposals for normalizing solar installation permitting that focus on streamlining and standardizing processes at the federal, state, and local levels. If we want to speed up the deployment of clean energy by way of home solar/battery, we need automated permitting, standardized regulations, and consolidated review processes.

When it comes to automated online permitting, the National Renewable Energy Laboratory (NREL) has developed SolarAPP+, an online portal that instantly approves permits for qualifying residential rooftop solar and storage systems. This standardizes requirements, reduces administrative burden, and cuts the permitting timeline from days or weeks to a single day. Unfortunately, SolarAPP+ is not widely adopted as yet.

There’s work at the state-level, too. Some state bills propose mandating the adoption of automated digital platforms for solar permitting across all municipalities. My state, Massachusetts, has proposed requiring municipalities to adopt a digital platform for residential solar permits. Another example, and one making me a bit envious, is New Jersey, where proposal achieved law when lawmakers unanimously passed legislation for automated solar permitting.

When it comes to standardized codes and guidelines, there’s the pre-approved design approach that could have jurisdictions adopt approved solar designs and inspection checklists. Such changes can significantly reduce permitting times, and SolarAPP+ is a likely solid starting point here too. Consistent code enforcement should be a no-brainer and this means aligning local code enforcement with federal and national standards, such as the National Electric Code (NEC) and guidelines from the International Code Council (ICC). Another consideration is model ordinances, like the program SolSmart, that support and recognize local governments that reduce “soft costs” by providing standardized model ordinances for solar, including definitions, setback requirements, and height allowances.

Permit me to be a bit crazy about permits and reviews. Over the years, I’ve renovated a couple of houses (like, down to studs, man) and the permits and reviews needed take more than enough time for me to finish up drywalling a room or two. I’ve known builders in the biz who constantly complain about the learning curves throwing them as they start a new project in new-to-them towns. Back to Massachusetts again, there’s a proposal to combine all local permits for smaller clean energy projects into a single municipal permit, with a deadline for a decision to be issued, but it can feel “always a proposal, never the bride” here in the Commonwealth.

Centralized state oversight is another approach through state agencies that provide consistent guidelines and review complex projects, sometimes with the ability to override local ordinances that are overly restrictive, if, in fact, not simply replace local ordinances with a state- scale process. This could extend to siting reform, but this is getting over our skies for home solar/batteries. No doubt consolidation of the various permits and processes, reviews, inspections, and other such details is also bound to trigger community engagement concerns, but again, this is more typically an issue for large solar projects. But read Abundance before you advocate for your particular siting or engagement hobby horse.

And then there is the issue of zoning, and in Massachusetts zoning for home solar/batteries is open, although not for large community or commercial solar or solar/battery projects. An essential element for normalizing the permitting process is to explicitly recognize rooftop solar as a standard accessory use, which prevents zoning boards from denying permits based on subjective aesthetic or community preference issues. This is another no-brainer, whether for rooftop or ground mount.

The Need for Speed… and Lower Costs

Clearer and widely applied regulations can make permitting easier and quicker. Dedicated agencies that can be expert on home solar/batteries—certainly more expert than a town building inspector—will not only be more knowledgeable, but safer and faster for projects, including inspections. Working with utilities for home solar/battery connection to the grid makes more sense for a focused agency at the state-level than at the homeowner or the installer level.

We worry about too many different rules and requirements for something as well-known as solar, but this applies to batteries, too. The U.S. is not in the pioneer stage of the solar market, and is even beyond early adopter stage, but it sure can feel like we’re still stuck, what with the catch-as-catch-can smorgasbord presented to the solar industry across the nation (hell, even one town to another). We need to do what we can to lower costs, and that in part means making it quicker and easier for homeowners to get solar. In turn, making it less expensive and easier and quicker for homeowners to get solar will drive customer acquisition costs down in a virtuous circle. In my own experience with the terrific and long-established company mentioned earlier, it felt like I “couldn’t get there from here,” and much of the problem was design restrictions from the mashup of regulations. The lack of normalization for solar installation means every job, in pretty much every way, is a custom job and that slows everything up and doesn’t bring prices down.

Greenhouse gases are still rising. There’s even been a recent bump-up that’s got a lot of people worried, and we are right to worry. There’s also the threat from the fossil fuel industry that is off to the races with dreams of a natural gas electricity generator in every pot to meet the needs of our new AI overlords, and that’s sure isn’t going to bring emissions down. Fortunately, there won’t be enough new gas generators to meet projected needs for some time, and that’s a good thing. (I recently wrote on the limiting factors the gas generator buildout is facing, in “New Gas Generator Plants and the Plan to Flood the (Electricity Demand Growth) Zone.”) But power demand is growing, although how fast and how much are different questions. Fortunately, whatever the answers, we can meet the load growth more quickly and less expensively through renewables.

But the real silver lining is that there’s significant capacity at most every hour of the day in every home and small business. I have 200-amp service, and while you do not want to see what my house service panel looks like, there’s electricity I’m not using. If I had solar/battery and if my connection to the grid was smart, that unused capacity could be returned to the grid. More good news: most solar/battery systems provide smart connection, and that is useful, even if this still falls short of Brainiac-level smart. In a neighborhood or town with a lot of solar/battery households, collectively there is a lot of unused power to meet peak grid loads; multiply one town by hundreds or thousands, and you have something on the order of 100GW of available capacity. Don’t quote me on that, since I still have some work to understand all the needed pieces and check on theoretical capacity and practical capacity, but that’s what I have Gemini Deep Research for.

What I don’t have to check is our need to get GHG emissions under control and dropping. We’re running late on this already, so chop chop.

A great way to speed things up is by chopping the tangle of regulations and requirements and costs for home solar and solar/battery.