Exploring the link between project delays and cancelation rates in the U.S. rooftop solar industry. (September 2021)

• Record Type: Journal Article
• Authors: Cook, Jeffrey J.; Cruce, Jesse; O'Shaughnessy, Eric; Ardani, Kristen; Margolis, Robert
• Is Part Of: Energy policy. Volume 156(2021)
• Publication Date: 2021-09
• Subjects: Solar -- Permitting -- Inspection -- Interconnection -- Cancellations -- Utilities; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2021.112421
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: About 1 in 10 rooftop solar photovoltaic (PV) customers who sign a contract to install a PV system cancel their contract before the system is installed. Although some cancelation risk is inherent in the solar industry, there may be ways to reduce cancelation volume, such as reducing project delays. Delays can occur at each stage of PV adoption processes, which take several weeks to months from contract signature to system operation. Using data from a recent survey of PV installers, we explore the factors that explain PV project delays and cancelations. The survey data suggest that PV adoptions take about 16 weeks, on average, from contract signature until system operation. Survey respondents consistently identified permitting, inspection, and interconnection (PII) processes as key drivers of project delays. Most respondents then suggested these PII-related delays increase contract cancelations. However, larger-scale installers report higher cancelation rates, and these installers rank changes in customer financial situations higher than PII-related delays as the main cause for cancelations. Most respondents also reported avoiding jurisdictions with particularly onerous PII requirements or charging more in these jurisdictions. On balance, the results provide a rationale for measures to streamline PII processes to reduce delays and potentially mitigate cancelation risk. Highlights: PV adoption takes about 16 weeks from contract signature until operation. Permitting and interconnection processes were cited as drivers of project delays. Large installers report higher cancelation rates than smaller installers. Jurisdictions might adopt best practices that streamline process and reduce delays.