A new report by a leading solar energy company estimates that the industry is losing millions of dollars every year because of municipal red tape. One company executive referred to it as “a hidden tax on solar.”

According to the report, solar energy providers could save up to $1 billion over the next five years if all state and local municipalities adhered to a standard set of filing procedures, codes and fee structures.

“Every city and town has its own set of regulations and requirements for solar installations. Our research identifies inconsistencies in local permitting as one of the most critical roadblocks to a sustainable, subsidy-free solar industry,” SunRun CEO Edward Fenster said in a press release announcing the report.

SunRun, one of the nation’s largest solar leasing companies, wrote the report. It estimated that solar companies spend an average of $.50 per watt on local permits and inspections, or $2,500 per installation.

The New York Times cited a California company that has 15 employees whose only responsibility is filing permits, including two employees whose only job is to physically deliver the permit and fee. A seemingly simple task takes an inordinate amount of time because each local government has a different set of requirements.

“We have 50 different permitting authorities within 50 miles of our office,” Ken Button, president of Verengo Solar Plus, told the Times.

SunRun’s report urged the federal government to create incentives for local governments to adhere to a standard set of rules. If all municipalities had the same standards, the report argued, it would make solar power competitive with gas and electric for about half of the 128 million homes in the U.S.

According to the Times:

At a time when the Obama administration has vowed to redouble its efforts to create a green economy — and, more recently, to remove regulatory roadblocks and promote growth — companies that sell and install solar panel systems for residential and commercial customers are clamoring to be among the first in line.

“This is in essence a hidden tax on solar,” Mr. Button said.

Administration officials said that they were seriously studying the issue, and that they planned to reveal initiatives and funding opportunities to address it.

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