Rooftop solar costs nearly three times as much in the US as it does in Australia, largely due to the “paperwork tax” imposed by thousands of fragmented local jurisdictions. I talk with Nick Josefowitz of Permit Power and solar veteran Andrew Birch about how to slash these soft costs through automated permitting and standardized interconnection. We discuss how these bureaucratic fixes could unlock dirt-cheap energy for American families without the need for subsidies.
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Text transcript:
David Roberts
Hello. Greetings, everyone. This is Volts for January 28, 2026: “How to make rooftop solar power as cheap in the US as it is in Australia.” I am your host, David Roberts.
The residential solar and battery industry faces a pretty grim landscape in the US. Trump and the Republicans have killed the federal tax credits that covered up to 30 percent of system costs. Jurisdiction after jurisdiction, most notably California, is rolling back solar net metering. Tariffs are making everything more expensive.
Unless something is done, rooftop solar, especially with the added expense of the needed battery, is going to lose out to grid power in most places in the US. That is obviously going to limit growth and deployment.
What can the industry do to prevent prices from ballooning? The answer lies in so-called soft costs — the kind of red tape, often at the local or even neighborhood level, that is uniquely burdensome in the US. As I discussed on my podcast with Saul Griffith, US rooftop solar and battery systems are effectively three times the price in the US that they are in Australia, almost entirely thanks to the so-called “paperwork tax.”
How can we bring those costs down more in line with our peer countries? To discuss this surprisingly complex question, I have with me two individuals who have, it is fair to say, devoted their lives to this very subject. Nick Josefowitz runs Permit Power, a nonprofit working with policymakers to make rooftop solar more affordable in the US. Andrew Birch, known to one and all as Birchy, needs little introduction in the solar world, where he is a 25-year veteran. He left the industry a while back to co-found SolarApp+, a permitting software platform that we will be discussing later, and OpenSolar, which helps simplify processes for solar installers and which we will probably also be talking about momentarily.
Nick, Birchy, and I are going to talk all about how to tame soft costs. With no further ado — Nick Josefowitz and Andrew Birch, welcome to Volts. Thank you so much for coming.
Andrew Birch
Thank you.
Nick Josefowitz
Thank you so much for having us.
David Roberts
Both you guys have really interesting personal stories. You’re both in the industry, you came to this from the industry, were convinced of the need for this through your experience in the industry, and now you’ve ended up doing this.
But I will, with your forgiveness and permission, just skip all the bio stuff because I want to get straight to the meat of the matter and I want to spend as much time as possible on it because I feel at this point I have read a million articles and heard a million podcasts talking about US rooftop solar. Rooftop solar is more expensive because of soft costs, and that’s usually the beginning and the end of it, and there’s usually just a lot of hand-waving around it.
I want to know what we mean by that and how we solve it. We’re just going to get straight into the guts of the matter, if you guys don’t mind. Nick, I’ll set you up. I’ve already been talking too long. I want to hear from you. You and Birchy both have come out with models showing that with a set of reforms you can get rooftop solar in the US down to — I think in Birchy’s model it’s $2 a watt and yours is $1 a watt. Either of those would be amazing. $3 a watt would be amazing. But I think you both agree, and I think everybody agrees, that on the list of problems, the list of reasons why US solar is more expensive, number one on the list is local permitting.
Nick, tell us, what is an AHJ and why does it matter?
Nick Josefowitz
An AHJ is what’s affectionately known as an authority having jurisdiction. That is one of the 20,000 local governments that issue you a permit to put solar on your roof and a battery in your garage.
David Roberts
20,000. Let’s just pause on that because that right there — that’s mind-boggling. 20,000 government bodies with authority over permitting in the US in 50 states. 20,000. I just want to mark that.
Nick Josefowitz
When we pause on that, we should note that no one knows the right number. Some people think it’s higher, some people think it’s lower. There’s obviously no list of them. Even the fact that we just don’t know how many local governments issue permits is itself reflective of the insanity that we’re dealing with here.
Andrew Birch
Welcome to America.
David Roberts
Yes.
Nick Josefowitz
Each one of those local governments, broadly speaking, has the authority to interpret the building codes in a different way. Many of them have the ability to adopt different building codes, they have different processes, and it is just a complete mess.
David Roberts
Tesla’s Solar team has a fantastic report out on this, and I just wanted to read a quote to emphasize what you just said. It said, “AHJs have archaic requirements such as handwritten homeowner letters, wet-stamped plans, notarized documents, zoning applications, and property surveys.” Depending on which AHJ you luck out to be in, you could be facing a totally different set of requirements.
Nick Josefowitz
And the list could go on. You missed the AHJs that require you to submit carbon copies of your permit application using something that you may remember as a typewriter. It’s crazy. We could probably spend the whole podcast giving anecdotes of individual local governments that go above and beyond — mostly in a well-meaning way — to make it incredibly difficult for families to put solar on their roof.
If you’ll permit me, one crazy anecdote: I was talking to an installer who worked in Daly City, which is a medium-sized town just south of San Francisco in the Bay Area. The building code says that you need to put the battery more than three feet away from the lot line. He had downloaded the parcel map from the municipal website and put the battery three feet away from the parcel line. When the inspector showed up, the inspector said, “I don’t think your battery is three feet away from the lot line.” He took out a measuring tape and they did it together. “I think you’ve got the lot line wrong.” “I downloaded it from your website.” The guy said, “You can’t rely on the maps on our website. You need to do your own site survey. It’s going to cost you $5,000.” Weeks of delay over what ended up being a few inches this way or a few inches that way.
David Roberts
I’ve heard so many of these stories — just commas in the wrong place, anything. You send it to them and they’d send it back asking for any modification or anything. That alone exchange is weeks. Two or three of those and you’re into months. It happens easily. It happens everywhere.
Nick Josefowitz
We’re not talking about — these are American families trying to navigate this. They can’t just say, “Talk to my permitting department, please.” They’re saying, “I just want to save money on my electric bills this month, not next year.”
David Roberts
Property survey. We’ll get the CTO on that.
Nick Josefowitz
Yeah.
David Roberts
Into this utter chaos of local requirements rides to the rescue: SolarApp+. First, Birchy, am I saying that right? Is it SolarApp+? How are you supposed to say that?
Andrew Birch
SolarApp+ is the name we’ve got, but it’s Solar Automated Permitting Process. SolarApp is their—
David Roberts
Oh, APP stands for Automated Permitting Process. Tell us what SolarApp+ is. You developed it in response to this cacophony, tell us what it is and what it does.
Andrew Birch
It’s about the whole — everything we just talked about. These are all interpretations and a lack of a cohesive single set of logical rules that cover the key elements of what’s needed for a permit. Over more than eight years now, the team at SolarApp, which had a lot of support from across the industry — lots of great people giving up their own time to build it — have created a national, approved, sanctioned by all the various bodies, standardized way of getting a permit that we’ve put on a website that is now a digital process.
You can sell a system, enter the information, and if that information states that the system is to code by a set of codes and standards that are agreed by everyone up front nationally, then you can go and install. You can install the next day. If it’s done right, you sell the system and you’re at the property as soon as the customer is ready with the kit and you put it on the roof and it’s done. It’s the complete opposite of what we just had as one of the many examples.
David Roberts
That’s effectively instant permitting. If you’ve got the documents, you have the information, and you submit it, you get the permit more or less instantly.
Andrew Birch
Correct.
David Roberts
There’s no in-person anything, there’s no inspection. I know there’s an inspection involved. Is that considered part of permitting? Is the inspection part of the permitting process? Have you taken physical inspection out of the picture? How do you do that?
Andrew Birch
Out of the upfront picture. You don’t need it. You need to know that it’s going to be safe, it’s got the right equipment, and it’s going to be designed and installed the right way. You don’t physically need to inspect and approve before installation every single permit. That is an absolute global best practice standard that we don’t have in the US today. Once you get rid of that, one of the things we should talk about on this podcast is it’s not just the direct cost that you’ve saved from the work that needs to be done — it’s the fact that it changes the entire customer experience so that you can sell it and install it.
David Roberts
We’ll get to that. SolarApp — and just to emphasize, you mentioned this in passing, but this is not just something that developers are pushing to speed things up. It’s also people on the other end — the inspectors, all that — everybody has seen this and agreed on it, more or less.
Andrew Birch
Yeah, I think in many ways the key customer of this is the AHJ. Nick alluded to this and I think we all agree in the industry that these are great people doing great work. They just have bad tools and bad processes, and the intent is safety for the customer, which is absolutely right. But if you have interpretation of code and lots of different state-level electrical code examples, the problem is you can’t standardize around a business process and the customer gets this terrible experience. It’s about helping the AHJs as a customer of the app use this in a way that makes them more efficient and effective.
David Roberts
That brings up a semi-political question. Nick, I know you, in addition to this work, you’re also an urbanist, a YIMBY. I was reading about AHJs and it’s hard not to see the analogy to all the many local bodies futzing with urbanism and buildings and building permits. One of the problems in that area is that a lot of these little AHJs — the thing about human beings is if you give them a little bit of authority, they like it, they like to exercise it, they are jealous of it, and they like to keep it. This manifests as NIMBYism in the urbanist area.
Is there — because you can’t tell an AHJ that they have to use SolarApp, right? They have to do something affirmative to adopt it. They have to make a decision. Are they jealous of their prerogatives? Are you running into any of that? They don’t want to give up their little system where they get to see the plans 12 times before they go into place and all this stuff. Are you running into any NIMBYism in this area?
Nick Josefowitz
Sometimes. A good example of that would be Boulder County, Colorado, where they have a rule that every building built before 1975 is potentially historic. Before a homeowner has the privilege of saving money by putting solar on their roof, they need to submit to a city hall committee to assess the historic value of their home.
David Roberts
To verify that it is not historical, you have to positively verify that your building is not historical.
Nick Josefowitz
Exactly. An automated process would get in the grill of that very subjective historic assessment. But I would say that’s probably more the exception than the rule. Most building departments are just really busy and have many different priorities. The mayor’s down their throats on the mall redevelopment or trying to revitalize downtown or whatever it is, and making it really cheap and easy for homeowners to put solar on their roof is not very high on their priority list. It’s difficult to get their attention to it. They often don’t have anybody on staff who has experience deploying software. We think it’s really a question of how states can set minimum standards for the building departments in their state.
David Roberts
To begin with, out of these 20,000 AHJs, how many are using SolarApp now? What is the level of penetration so far?
Nick Josefowitz
Automated permitting is really going gangbusters. There are several hundred local governments now using this — everything from really tiny communities of several hundred people up to some of the largest cities in America, like Houston and Tucson, Arizona. It’s impressive to see how it’s grown. But it’s not 20,000. There’s no way in the world that you can even think about a model of deploying this kind of automation at scale where you’re just going around and asking each local government nicely, “Hey, have you thought about adopting this process?”
David Roberts
This is the thrust of my question because over and over again, as we’re going through this list, we’re running into things that the business can’t do — the solar installers can’t do this. They need policymakers to do this. You have to persuade all these AHJs one at a time to switch to this thing. Surely there must be some way to chunk this, to do it in semi-bulk. You’re targeting states. What would a state law look like? Would it say, “Our AHJs have to use SolarApp,” or is it something more? What’s the legislative language?
Nick Josefowitz
There are a few different models. California has passed a law that requires all local governments to automate permitting for home solar and storage. They have the leeway to figure out how to do that themselves. A lot of them are using SolarApp, others are using other software solutions, others have gotten rid of the permit step entirely because they said that is not something that they are particularly concerned about.
The state of New Jersey — just on Christmas Eve, outgoing Governor Murphy signed legislation that would require their state Department of Consumer Affairs to roll out an automated permitting system for home solar and batteries.
Local governments are required to either use the state system or they can roll their own. Republican states like Texas and Florida took a completely different approach. They said, “We’re going to allow licensed third-party engineers or building inspectors to do the plan review on behalf of the local government — third-party permitting — and they can use automated software to do that plan review.” It’s a bit like school choice for building departments.
David Roberts
Privatizing permitting a little bit.
Nick Josefowitz
There are lots of different ways to do this depending on the particular context of your state. Ultimately, it is about the state saying, “It’s important to us that we don’t have this government red tape blocking American families from installing rooftop solar cheaply and easily and saving money on their electricity bills.”
David Roberts
I’ve got to say, intuitively, if you’re engaging in a process that is taking you two to three months and you can easily replace it with a process that is instant, that’s pretty damning about the previous process, is it not? If you can get rid of permitting entirely, what are all of these people doing for weeks and months on end? It’s shocking to me that all of this permitting work that’s going on, all of this time that is being taken, and all of these thousands and thousands of AHJs across the land is all pointless. You really can just replace it all. You can get rid of permitting entirely with no ill effects. It seems like a very damning comment about the current permitting setup.
Nick Josefowitz
It’s very funny. Brown University’s Climate Solutions Lab issued a number of reports last year looking at individual states — Arizona, Colorado, Illinois. They estimated across seven states that automated permitting for home solar and batteries would save local governments 3,000 years of staff time. 3,000 years of staff time.
It’s not going to come as a surprise to any of your listeners that there are places where we could deploy technology in government strategically, which would massively improve the functioning of government. I hope that one of the things that we can do here is not just be solving for home solar and batteries, as important as they are, but we can also be a model for how government can adopt these types of technology solutions to significantly improve the experience that everybody is getting.
David Roberts
Birchy, one more question about permitting before we move on. This gets to a bit of a futuristic look, but do you think machine learning is going to play a big part in automating this further? Are the remaining bits of human touch going to be automated out of this eventually? Is it possible for machine learning to assess a system based on a set of specs and pictures and permit it without a human being involved at all?
Andrew Birch
The beauty of this is that it’s so simple, it doesn’t require machine learning. In every other country around the world, no one’s working on AI for the solution because there are three or four rules that they apply to make sure the system’s to code and then it’s done. This isn’t one of those instances where AI comes in and solves.
It’s really a systematic failure, not a failure of any one city. It’s a failure for all cities and states with policy to look at this holistically and say, “We need a digital standard.” It’s a very simple set of rules. We just need to agree what they are and implement them. That is what Permit Power and SolarApp+ are doing now with state policy across the states. The sooner we have it, the better.
David Roberts
Permitting is the big one. Permitting is public enemy number one here, the big villain. We have in our hands a solution to that problem, which is getting these local AHJs to adopt this instant permitting, which they can now do off the shelf thanks to SolarApp. That is a solved problem. It’s just browbeating the states and the AHJs into doing this thing. For most of these AHJs, this should be a boon, a help. It’s giving them time back, it’s allowing them to hurry up. For all the hoo-ha about that problem, it does seem like it’s in hand, at least a solution is in hand.
The second thing I want to talk about, which is related but slightly different, is interconnection. There’s permitting mishigas and then there’s interconnection mishigas, which is slightly different. Permitting is up to these local AHJs. The interconnection agreement you have to get to hook up a local system goes through the utilities. There are hundreds of them, too.
What is the approach there, Nick? Maybe you start. How do you prioritize that relative to the permitting thing? How do you rank these relative to one another?
Nick Josefowitz
It all comes under the general framework that we should make this as simple, as standardized as possible, and that we should get rid of unnecessary costs and processes so that ultimately American families, when they buy solar, can have it installed in a few days. That’s what we’re going for. Some utilities do a lot better job of interconnection, and some utilities do an absolutely miserable job of interconnection. As an example, in New Jersey, Atlantic City Electric can sometimes charge homeowners almost $20,000 for grid upgrades for the electric grid before they can install a home solar system.
David Roberts
This is after you have waited for two months or whatever for your permit, then you pivot to deal with the utility, and they want $20,000 more.
Nick Josefowitz
You have the pleasure of upgrading the distribution grid for your entire block. They can take an extremely long time to process these very simple applications.
David Roberts
PG&E is pretty bad, too. I hear enough people complaining in California — is PG&E, where do they rank on this specific metric?
Nick Josefowitz
PG&E has been getting better for simple home solar systems. They are struggling on interconnecting slightly larger solar and battery systems, EV chargers. There was recently a lawsuit filed that the PUC in California was not holding their feet to the fire for missing statutory deadlines. This is not an issue confined to one utility, although some utilities are doing it better than others.
Ultimately, what’s happening is that for things that are a real priority for the utilities to interconnect, data centers, they’re getting incredibly creative by offering fast and flexible interconnection options. Fundamentally, what we’re saying is, “If you’re going to offer that to the utilities, let’s offer it to American families, too.”
David Roberts
Let me clarify what you mean by that. People have an image in their head. If you’re a data center, you come, you say, “I want a megawatt of steady power on all the time, forever and ever, amen.” The utility says, “Sorry, we can’t do that.” But if you come to them and say, “We need a megawatt of power most of the time, but sometimes we can ramp down our demand based on grid congestion,” — if the data center can be flexible, then the utility can hook them up. Or the utility can say to the data center, “Fine, you can hook up, but just know that if we run into a period of congestion or something like that, we can ramp you down, we can cut you off.” If you’re willing to accept that condition, you can hook up. What do they call it in ERCOT?
Nick Josefowitz
I think the general term is just flexible interconnection.
David Roberts
It’s something, something in connect. There’s some gimmicky term they have.
Nick Josefowitz
Connect and manage.
David Roberts
Yes, there it is. Is that what you’re talking about? Birchy, jump in here. Isn’t that what they’ve ended up doing in Australia now? You can hook up all the rooftop solar you want, but the utility has the right to curtail you in certain circumstances?
Andrew Birch
That’s the historic setup now. It’s being augmented more recently because you’ve got penetration hitting something like 40% now across the country. In South Australia, it’s 50%. What you’re bleeding into is the need for an open, transparent market for grid services — ancillary services that support the performance of the grid. As soon as you do that and retail customers can access those prices, the solutions they can deploy with VPP and battery control mean that they can monetize the value they bring to the grid.
In all of these policies, it’s interesting for someone who’s been in this market for 25 years, that 25 years ago we needed subsidies. What we need now is the opposite. We need an open market, zero subsidies, transparency, access to the grid. As Nick said, equivalent access to the grid to any other scale or energy technology that exists. If we’re allowed to compete, we can compete, but you just have to get rid of all the red tape and we can operate economically to lower the cost of energy.
David Roberts
Is it fair to say that in Australia this particular bottleneck has been removed — the interconnection bottleneck more or less solved in Australia? Is that fair?
Andrew Birch
Yeah, if you speak to your average installer, they’ll say, “Oh, mate, I had to fill out a form for this guy once.” They’ll have a little grumble, but the numbers speak for themselves. When you get to 40% coverage and you’ve got a dollar a watt for solar and under $2 with a large battery, it’s done. It’s all down to standardization. The vast majority of systems are going to be under 10 kilowatts of solar and under 15 kilowatt-hours of battery. You just say, if they’re to code, these are the rules and you’re allowed to install. If you have a map of the grid where you’ve got certain pinch points that that’s not the case, you disclose that to the local community and installers can work around it.
David Roberts
Nick, two questions. One, what utility in the US is doing this best — doing this really state of the art? Two, political economy-wise, how do you apply pressure to utilities to do better? Are you trying to work through PUCs, through public utility commissions? Is that who needs to step up here?
Nick Josefowitz
It definitely is PUCs and also the legislature because there are a lot of publicly owned utilities, municipal utilities, rural electric co-ops that fall under the jurisdiction of their PUC in a particular state. The places that have made the most progress are California and Colorado. So far at the state level, California put in place this program called Limited Generation Profiles because in California they have to name it something different.
When you go to install your battery and solar system, the utility will say, “In August between 3 and 5 pm there is going to be grid congestion. I’d like you to dial down your exports between 3 and 5 pm in August.” You say, “OK.” That’s how you set up your smart inverter so that it does it automatically and then they connect you to the grid.
Previously, if there had been the chance of you exporting during a period in August where there was congestion, they would have said, “Now you need to pay for a massive upgrade or you need to wait for us to build a massive upgrade.” That’s new in California and I think it’s working quite well. It’s not the most sophisticated version of flexible interconnection.
David Roberts
If I’m the customer and I’m signing up for that, am I agreeing up front to a specific period in August or am I just saying to the utility, “You can dial me back when you need to”?
Nick Josefowitz
You’re agreeing to a specified period in August.
David Roberts
Ah...
Nick Josefowitz
That’s why I would say that’s probably version 1.0. A more sophisticated version would be saying, “You can dial me back when you need to.” The utilities, when they’re projecting out grid congestion, are being pretty conservative. They don’t know what the weather’s going to be in August. They don’t know how many people on your particular block have decided to go on holiday and aren’t using any power at all. They have to be quite conservative. Globally, when you allow the utility to have more fine-grained control within limits, you have much less curtailment than when the utility has to plan this thing years in advance upfront.
Andrew Birch
That’s where batteries are coming in, just to add in a big way. We’re seeing much evidence of that — they just reduce the overall cost of the system and everyone wins.
David Roberts
Yes, all batteries everywhere.
Andrew Birch
In the UK we’ve got new regulations that are creating this marketplace of grid services and battery attached. We see on OpenSolar about 50% of UK users are designing using our software, and we can see the data — it’s over 85% now battery attached.
David Roberts
New installations?
Andrew Birch
New installations, yeah.
David Roberts
Interesting. 85%. Damn.
Andrew Birch
Yeah.
David Roberts
Wouldn’t this problem be solved if every distributed system that hooked up via interconnection was part of a VPP? The ability to curtail it is baked in with a VPP.
Andrew Birch
Exactly right.
David Roberts
Isn’t this going to solve itself eventually?
Andrew Birch
It will, and I think the market does. The consumer behavior you create is, “Why would I not let my battery pay me between five and seven in the evening?” In aggregate and at local level, if you open up that market, then the VPP providers — and ultimately the customers — will solve the problem.
David Roberts
That’s permitting first and then interconnection second, which are distinct problems. Permitting, you’re trying to get AHJs to get a clue, adopt instant permitting. Interconnection, you’re equivalently trying to get utilities to do instant interconnection.
Andrew Birch
The two are related. David, sorry to interject, but I want to highlight that this core kernel of the problem we’re trying to solve is standardization. Once you have a national standard of what you’re allowed to install, that same process can be used to provide that visibility and certainty and security to the utility user who’s got it interconnected.
Let’s imagine and dream for a minute that we have someone who looks at energy holistically for their population and state. They would say, “If I automate permitting and enforce SolarApp and I have a standard set of rules off the back of that that requires certain systems that are under a certain size and installed to code, then they have to perform X. They have to operate in a market format — an open market format with VPPs.”
Then you have all the solutions for the grid operation, but also you have solved for customer affordability because you have made the cost lower. You have an additional revenue stream which improves the economics. You do not need a subsidy, do not need the tax credit. That also means businesses can invest with visibility and certainty and the whole thing suddenly takes off.
David Roberts
The standardization has knock-on effects for utilities, for other businesses involved. It makes everybody a little bit more confident.
Nick Josefowitz
I want to also add that this model of fast, standardized, flexible interconnection is not just for home solar and batteries, it’s for all scales of renewable projects. It’s for all the types of loads as well — new loads that are coming online, EV charging, new factories, data centers of all these different sizes. It’s about how you take a distribution grid, which is not very well utilized at the moment, and allow it to be utilized a lot more effectively. Go from, say, 50% utilization up to 60 and 70% utilization.
There’s a real opportunity there to think about how all these different loads connect and utilize the grid, as Birchy was saying. One example of this potentially happening this year is there’s legislation in New Jersey. I think Governor Mikie Sherrill has a huge opportunity to be a leader on this, given how central energy affordability was to her election. There’s a bill in New Jersey which is going to direct their PUC to do flexible interconnection, both for loads and for generation. Thinking about it collectively is really exciting. As part of that political economy aspect that you asked about.
David Roberts
Final question about interconnection. Is there an equivalent software tool like SolarApp that helps, or is this another thing, Birchy, that is so simple that they don’t need software tools to do it?
Andrew Birch
There’ll be a lot of software needed to deliver it, but I think that would be delivered by the private market. The set of rules that is required is really simple and straightforward.
David Roberts
We’ve been through permitting — local permitting. We’ve been through interconnection. I think those are the two biggest culprits for why US rooftop solar is more expensive. There are some other pieces, too. Birchy, we mentioned earlier, one of the big chunks of the graph I often see for why US costs are so much higher is customer acquisition.
As you mentioned up front, one of the reasons it’s hard to keep customers on board is that they have to deal with a baroque, Kafkaesque bureaucracy that can take weeks or months. You might run into a $20,000 charge, months into the process, etc. In those circumstances, customers are going to bail frequently. Do you think standardizing permitting and standardizing interconnection and making both of those fast and standard will in and of itself solve the customer acquisition problem, or is there more to it than that?
Andrew Birch
There’s more to it, and again, it’s connected. As you said, trying to sell something that costs $30,000, $40,000, $50,000 is a very detailed process that takes time for a customer to get comfortable with, to be fully educated. If that system costs $7,000, $8,000, $9,000, $10,000, $12,000, that’s more credit card, high-speed purchase. That means the salesperson is selling two or three times as much, the cost per salesperson declines. The acquisition cost falls with cancellation rate. There’s a well-documented cancellation rate that’s pretty linear from time to install because there’s this natural buyer’s remorse phenomenon that happens where you wait for 30 days, you’ll see 10–15% of people cancel; twice that, you’ll see that double.
This solves all that. You get the permitting and interconnection policy right, then you’re in a much more efficient place. What we’re seeing is the bit that the installers control, and this is what I do with my OpenSolar hat on, is give them the toolkit where AI does have a big role to play, which is to automate the design process, to make things instantaneous on the customer education side, to make technology do the work of education and closing so that you can sell as an installer so much more with so much less cost. That business process and software piece, even in a world with a horrible permitting journey, still has a very big role to play. We see OpenSolar doing that.
David Roberts
To clarify what you’re talking about, this would be me as a solar customer talking with an AI bot that can answer all my questions, which frees up human labor. Is that more or less what you’re talking about?
Andrew Birch
At the extreme end, it’s the AI bot, but more of the time it’s still a people-driven conversation because these systems in the US do cost $25,000, $30,000. What it really is, is when you have an inquiry from a customer, you’re able to respond very cost-effectively and very quickly. You get that information, also making sure if someone is living under a forest or in an apartment block, they know that they are not the right customer without spending money on that process. Being much more effective in dealing with the funnel saves you important time and money, especially when it costs so much to permit and process the customer.
Nick Josefowitz
There’s an opportunity to be much more transparent with solar pricing as well. Ultimately, we really believe that we want to be putting more and more power in the hands of American families to control their energy futures. If they could go on a kayak-style site where they put in their home address and contractors can generate quotes for them using AI or some other automated tool that are really reliable, then they could price compare. That would also make a huge difference because elsewhere in the world solar is really bought rather than sold.
In America it is so expensive, takes so much time to deliver that you have to really sell it. We need to be thinking about how to move to a model with much more transparent pricing where you will see a lot more cheap solar and batteries get bought.
Andrew Birch
Mainstreaming, as Nick said, is getting that visibility and velocity up, which also complements the price visibility. When you get the penetration starting to kick off and you get into a community and 15, 20, 25, 30% of that population is going solar, everyone knows what the price is. We see real consistency of pricing. All the installers are making 8 to 12% margins. They’re all plus or minus 2, 3% max on the pricing in other markets. It’s a high-velocity, high mass-market product that we’ve delivered. It all comes to — we need a vision for American solar for homeowners where it’s all about affordability, scale, and standardization.
David Roberts
The market alone, I think you’re right. It’s fragmented and mom-and-pop right now. There’s a lot of hairiness around the edges. Scale and standardization will be helpful. One other question about the customer acquisition piece — I’m curious if either of you have thoughts on this.
One of the things I’ve done pods on in the past is this idea that utilities, distribution utilities, are the ones that know where on the grid the congestion is and where on the grid the distributed energy is needed. There’s this idea that they could do what’s called distributed capacity procurements. They could go to a place and say, because they have the connection with the customers, “We have congestion in your area, we’ll install XYZ for XYZ cheap price.” The utility could be rounding up customers, which would cut all that cost for the installers. Have you heard about anything like that going on?
Andrew Birch
It’s disgusting. It’s un-American. If you don’t mind me sharing an opinion on this. Taking a technology that can be enjoyed by all and sold by all and restricting its sale or the value in that sale to a small subsegment of the people who could be getting into this solar economy is not the market solution. That information should be freely shared.
David Roberts
It’s not like they’d be prohibiting distributed systems outside of these areas.
Andrew Birch
As long as that information is shared. Of course, the utility should be allowed to sell solar, but the actual rights to the information of what the grid needs should be absolutely publicly available to all.
David Roberts
Nick, any thoughts on distributed capacity procurements? Is that on your radar?
Nick Josefowitz
One of the things that I think is really interesting is that right now home solar and batteries are really too expensive. We spend an enormous amount of time thinking about, “Who’s going to finance them and who’s going to own them? Is it going to be a Wall Street bank owning them with a lease, or is it going to be a utility because of their cost of capital or whatever?” We need to get to a place where solar is too cheap to finance. Then all of these discussions about who owns it and cost account and this and that go away because it’s just really cheap. A homeowner can just decide to buy it if they want.
That’s our vision for the future. In the meantime, I’m fairly agnostic about who the ultimate owner is, but I know that oftentimes when you have to go through a complex corporate ownership process, whether it’s a utility or a bank or a fund or whatever, that just adds extra costs and extra process. We just need to focus on getting it as cheap as possible. A lot of these issues will sort themselves out.
Andrew Birch
Yeah, I agree with that.
David Roberts
We did permitting, we did interconnection, we did customer acquisition. One other thing that I see floated around periodically is hardware costs. This brings up a really interesting question that I’d love to hear from you both on. The current policy position in the US is that we want to encourage domestic manufacturing. We don’t want China to dominate all these products. We’ve got giant tariffs on a bunch of products that are making things more expensive for the people who install those products.
I’m guessing both of you, as representatives of the installer community, are against these protectionist trade barriers and tariffs. Birchy, you have some pretty spicy rhetoric about these things on your website. Maybe you’d like to share your thoughts on how people should think about that issue — the balance of trying to encourage domestic manufacturing versus the merits of just installing more, faster.
Andrew Birch
I was in India and Australia a couple of months ago and you’re looking at 8 to 10 cents a watt for a solar panel. If you compare that to the $5 a watt that an American consumer is paying for solar and a battery, that gives you the perspective of the importance of this. The biggest thing is that getting the permitting and interconnection and everything we talked about standardized — then whatever federal policy is on domestic versus overseas, we don’t care as much.
I will say, and you’ll see on my website, that I am personally of the belief that we should care less about where the manufacturing is done, given that we are just talking about 10 cents a watt and there’s so much economic rent to be had in the local community where all the jobs are in sales and installation and logistics. That’s where the value creation is — phase one. The even bigger value creation is in what we do with a lot of cheap electricity. If you listen to the —
David Roberts
Thank you. I just want someone to say this. It’s not like the market in coffee makers or widgets or something.
Andrew Birch
This is fundamental.
David Roberts
These are not widgets. They create energy, which is prosperity. This is not a normal consumer product —
Andrew Birch
And it’s competitive — this is the thing that America has to be really careful about. No matter what your political colors, if you don’t have an energy-efficient economy, if you’re uncompetitive because you’ve got fossil fuels and high permit cost clean energy, you’re not going to be able to compete in manufacturing, you don’t compete in services. Importantly for the current administration, you’re not going to be able to compete in AI. You don’t just have a problem with the amount of electricity that’s needed, you’re unable to compete in any of these core industries.
Every other country around the world is seeing what’s happening with this. IEA have said it’s the lowest cost energy in the world and they should focus on that. The security aspect is often cited as, “We need American panels,” and Europeans, “We need European panels.” This isn’t a gas pipeline coming in from Russia or from China.
Once you’ve got the panels, you’ve got the panels. Nobody is switching off the sun, so you could much more effectively and efficiently just stockpile a couple of years’ worth of panels, which, in effect, is what we already do in the supply chain right now. There’s your security solution as well. If it’s about economics, jobs, and security, you really shouldn’t care where they come from.
David Roberts
That’s your strategic oil reserve, right? It’s just a warehouse full of solar panels. Huzzah to all that. Nick, I’m guessing, just from a political economy standpoint, this is probably a windmill that is too large for you to bother tilting at. Do you do much work with federal policymakers trying to talk them down off some of these tariffs?
Nick Josefowitz
I do absolutely zero work with federal policymakers on tariffs because I think every religion in the world has some version of, “God, give me the grace to accept the things that I cannot change.” We’re very much about getting the grace from God on those things that we cannot change.
Also, because panels, even with the tariffs on them, are just very cheap. It’s one of the engineering miracles of my lifetime how we’ve gone from incredibly expensive panels to panels which cost $50 or less and are cheaper than a plank of wood. It’s not that that’s really driving up the cost of home solar and batteries. It’s all the things that we talked about — permitting. The paperwork around permitting costs an order of magnitude more than the panels do. If we can focus on permitting more than panels, we can see the most benefit for American families and for our economy.
David Roberts
We did permitting — big one; interconnection — big one; customer acquisition; hardware cost. There are a couple other things to say about hardware, but we don’t have to get too far down that — we don’t have to talk about string inverters. There are only so many rabbit holes we can go down. Anything else you’d like to mention that would be necessary to bring US rooftop solar down to Australia levels, or have we covered the big pieces? Any other remainder bits you guys would like to mention?
Nick Josefowitz
I was going to mention homeowners associations before we talk about political will.
David Roberts
Do they count as an AHJ? Is that technically an AHJ or is that different? Is a homeowners association some extra-legal — how does it fit in?
Nick Josefowitz
It’s not technically an AHJ, but homeowners definitely need protection from their HOAs.
David Roberts
Yes.
Nick Josefowitz
There are hundreds of thousands of them around the country. Almost 100 million Americans live in HOAs.
David Roberts
It’s funny, and I’ve never heard one say a fond word about their own HOA. It makes you wonder why there are so many places if everybody seems to hate them so much.
Nick Josefowitz
They can just add inadvertent months of delay. It’s, “We generally allow everybody to put whatever solar on the roof that they want. But you just need to go through the architectural review committee.” The architectural review committee meets in April. April comes around, “Jimmy was in Tampa, so we didn’t have quorum. We’re now going to postpone this to the June meeting.” Before you know it, you’ve gone months and months with absolutely no reason. We really believe that HOAs should just have no role in approving home solar and battery projects, full stop.
Andrew Birch
Yeah, agree with that. David, I was going to add two other things and I think you may have mentioned one, Nick. The first is just on codes and standards themselves. We need the code to be —
David Roberts
Building codes, you mean?
Andrew Birch
Building codes. It’s building codes that are complicating the hardware choices, the amount of solar you can get on a roof, the battery placement site is unclear. The automated permitting has to standardize a code. The code itself has to be looked at in order to get to the point that a contractor can use the automated permitting in a way that doesn’t require a site visit pre-install.
It’s really important for contractors that that’s the bit that really saves them the money — not having to do that pre-install site visit. A lot of that comes down to code, even with SolarApp. That’s one thing. Nick, you mentioned the political will.
David Roberts
Pause on that for a second because on each of these I want to be clear on who’s in a position to solve it. Who controls that code? Who do you talk to if you want that to happen?
Nick Josefowitz
The building codes are generally — there are the master building codes which are developed by these code-making nonprofits. If you were in the UK you would call them quangos, quasi-governmental NGOs, which have this ambiguous role. They take an enormous amount of time to update their codes. It’s, “We’re starting the code update cycle for 2031, please put in your comments,” type of thing.
Ultimately it’s the states that in most cases are adopting the base building codes. There’s an enormous opportunity again for states to step in and say, “We need a building code that optimizes for energy affordability.” We need a building code that optimizes to allow American families to put solar and batteries in their home cheaply and quickly.
Andrew Birch
Yeah, and include electrical code on that as well, Nick.
Nick Josefowitz
Absolutely.
Andrew Birch
Some of the plumbing codes and standards — the Tesla report highlighting you get 6 cents a watt of saving just from being able to use the roof better from all the various codes you have to satisfy for vent pipes and that kind of thing. That’s really key. It all needs to roll up to a collective desire to deliver that low-cost energy to American families. That to me is the segue to the last piece, which is political will.
One of the things that’s frustrated me in the last 20 years of US solar is how we are unable to collaborate and coordinate as a meaningful group of businesses and labor force, which is dwindling.
We had a couple hundred thousand people in 2023 installing residential solar. The market probably is going to be at half that level in 2026 — a 50% reduction in an industry that everywhere else in the world is growing at 25, 30% a year and in India 70% a year. It is heartbreaking, but we have ourselves to blame because we need to galvanize the scale of our industry around these solutions.
Everyone has to believe it. Maybe this is the kick in the chest that we needed with the ITC situation at the federal level. These are solutions that are mostly local and state-level solutions that if we just get organized and really champion our cause, we should be able to solve.
Nick Josefowitz
One of the incredibly exciting things about this agenda is that it’s also zero cost. It’s about getting out of the way. It’s not about, “How do we find the money to subsidize this person by having this person pay for it?” It’s literally that we’re lighting dollar bills on fire and we just have to stop doing that.
David Roberts
You would think that the message, “I want to cut a bunch of government red tape so that this industry can compete without subsidies,” would be tailor-made for conservatives. Tailor-made, you would think, for the Republican Party. Peculiarly, they don’t seem to be going in that direction. But I bet at the local and state level there are still Republicans who care about Republican principles and could be appealed to with precisely this message. This ought to be bipartisan.
Nick Josefowitz
I think we haven’t found the pro-red tape party on either side of the aisle. You see, for instance, in Maryland — obviously a very blue state — they are going to be introducing legislation this year that is probably the most comprehensive permitting and red tape streamlining anywhere in the country.
David Roberts
I was going to ask you for a couple of success stories — who’s doing good things? Maryland?
Nick Josefowitz
Maryland. Once you end up talking to a lot of legislators, you realize it’s not random in Maryland at all. There’s a particular legislator who’s going to be chair of the relevant committee, Delegate Fraser Hidalgo, who’s total beast mode when it comes to these types of issues. It’s incredible. We briefly touched on it, but I think Abigail Spanberger, Mikie Sherrill in New Jersey, in Virginia, they ran on energy affordability. They have this incredible opportunity to build on the success that really happened in those states.
David Roberts
I know you run a nonprofit so you’re not allowed to get too political. But I am a little curious how this — because you say the Dems are all about affordability this cycle, it’s on the tip of their tongues. They refuse to even talk about ICE troops in the streets because they’re so obsessed with talking about affordability. This is a big piece of affordability. But the message, “Rooftop solar is the cheapest energy available — but not right now, not the prices you see around you, but it could be if we do these reforms,” — it’s a tricky dance.
Trying to sell affordability on a form of energy that we now acknowledge on this pod is not particularly affordable at present is tricky. I don’t know if you have any thoughts on how to navigate those waters.
Nick Josefowitz
I don’t get hired to run gubernatorial campaigns, this advice is what most people are paying for. But I think the way I think about it is the fastest way for an American family to lower their utility bills is to put solar on their roof. We need to make it cheaper and easier for them to do that. When we survey American families, there is overwhelming support for making it cheaper and easier to put solar on your roof and to streamline all of this red tape.
I don’t think anybody’s going to get elected on a rooftop solar platform or anything like that. But I do think you’re seeing that this is becoming part of an integrated energy affordability platform. For instance, Governor Spanberger, leading out with her energy affordability priorities, mentioned making it really easy to install plug-in solar in your home.
David Roberts
Yeah.
Nick Josefowitz
I know you’ve done a pod on that before, but that’s all part of the same package. It’s, “How do we make it cheaper and easier for American families to take more control over their energy futures and to save money on their utility bills?” I think you’re starting to see that being part of the conversation. You’re also going to start seeing voters looking at their neighboring states and saying, “In New Jersey, pretty soon, once this law comes into effect, you’ll be able to get your permit instantly.”
If you go across the river and you’re in New York and you have to wait nine months for some combination of architectural review and I don’t know what, I think voters will start turning to their state reps, turning to their electeds and saying, “Why does New Jersey get the nice things at the nice prices and New York is doing nothing to help me get solar on my roof?” I’m confident that we’re going to have a positive feedback loop on this type of stuff and that there is going to be enough excitement around it. We’re not asking for the biggest political lift here. You don’t need continental-level political campaigns to do this.
David Roberts
We’ve all had to lower our sights a little bit lately, Nick. We’ve all had to become more modest in our goals. But this does seem like there’s a convergence here. This is good for the local regulators, saves them time, speeds things up for them. It’s cheap for the homeowners. Utilities get a little extra controllable capacity. Homeowners get cheaper bills. The big macro drive for grid capacity — to free up grid capacity to get data centers on — that’s served by rooftop solar. It does seem like our politics are extremely dysfunctional right now, but it really does seem like this piece is in everyone’s interest.
It’s in everyone’s best interest. It’s hard to think who would be — you’re not fighting against concentrated opposition here. You’re just fighting dysfunction, just fighting American political dysfunction. But this is to everyone’s benefit.
Andrew Birch
Yeah, you’ve got to remember in Australia right now, we’re delivering — when you solve the permitting and the red tape, you’re delivering electricity at 5 cents per kilowatt-hour. There’s nothing political about that other than if a politician wants to get that price for their constituents, all they have to do is remove the red tape. It’s really a question: which politicians are going to jump on this and make the win? Who’s going to get the political points from it? That, to me, is the more potentially aligned view — all right, come on, who’s out there? Which cities, which mayors, which states are going to win and be the leader and get the points?
Nick Josefowitz
In Australia, you see the conservatives and the liberals fighting over who is going to be more pro-rooftop solar in their elections.
David Roberts
Nick, as someone who comes out of urbanism, you’ll be familiar with this dynamic: once you’ve done it, no one wants to go back. No one dislikes it once it’s done, no one. But no one learns from that, so it’s the same battle every time. No one who’s got a rooftop solar system and a battery reducing their monthly bills by $20, $30 a month wants to go back. No AHJ wants to go back to spending more time on all this stuff. All this stuff is — once you get it done, it roots itself quickly because it’s just better. But getting people to do things that are in their own best interests is difficult.
A final question for each of you. Nick, if I’m just an ordinary schmo out there in the American hinterlands, and I want to be useful on this topic, what can I do as an individual? Is the best thing for me to do just to install solar, or who should I talk to? Do I need to Google who my local AHJs are and try to get a hold of them? Is there a recipe for individual advocacy or activism here?
Nick Josefowitz
Getting in touch with your local or state-level elected officials and saying, “You just need to make it easier for all of us to put solar on our roofs and save money on electricity bills and make sure that you set minimum standards for utilities and local governments,” goes an enormously long way. If anybody has had a particularly bad experience around installing solar with their local government or their utility, we want to hear that because often we can talk about dollars per watt until we’re blue in the face. The one story that is super compelling is ultimately much more likely to move policymakers.
You know how to find me — nick@permitpower.org, on the LinkedIns, on the socials. We’d love to hear from you. We can do this.
David Roberts
Do you ever do a targeted intervention based on these stories? Does Permit Power have enough oomph to go to, say, Bloomington, Indiana, and raise a ruckus about this?
Nick Josefowitz
We don’t have the capacity to work across local governments because there are just way too many of them. Oftentimes there is very likely going to be something going on in a state legislature around these issues. That’s what we think of as the targeted intervention — connecting people with their state legislators or with advocates who are working on an issue in a particular state so that they can get connected and maybe tell a story to a local TV station. We can certainly help with that.
David Roberts
Birchy, final question. This is a ridiculous final question, but what we’ve been talking about is part of a broader thing, I guess, that you would call standardization. As we’ve said before on this pod, standardization is widely accepted — if you want prices to come down, if you want scale, you need some standardization. We’ve been talking about standardizing the permitting process, the interconnection process, but you have a proposal for a much broader standardization called the Electric Protocol. In a sane world, we would do a separate pod just on this. If you have the two-minute version that you’d like to leave us with at the end of this pod.
What is the Electric Protocol?
Andrew Birch
This is the set of rules that create that open market for everyone. Any energy technology of any size and any description gets treated the same way. We all have access to grid pricing, time-of-day energy. We all have access to grid services, time-of-day ancillary services. If you simply do that and make that available to everyone, the market can solve all of these problems without subsidy. These are zero-cost solutions that we can all deploy now as governments in any country to allow what is now the lowest-cost energy in the world to create the solutions for each individual customer and the grid as a whole.
David Roberts
This is useful as a guiding light, a set of rules that people could move toward. What is the right level of government to implement that? Would that have to be national or could a state, could ERCOT adopt the Electric Protocol?
Andrew Birch
Absolutely, yeah.
David Roberts
What is the right unit?
Andrew Birch
In the US it’s most likely a state-driven thing — you have a state governor, a state party who sees what every other country is doing around the world, sees the opportunity for domestic American low-cost clean energy, sees that it won’t cost the public purse, and sees that it can dramatically lower the cost of energy, increase energy access and availability for business and homeowners.
They just say, “We want to do this.” It’s really quite straightforward. You would standardize and automate permitting and interconnection, simplify code, and create the market pricing that every homeowner and small business can access.
That enables, in a very American way — admittedly you have two weird accents on this podcast, but both very much American advocates for clean energy for a long time — it is a very American solution that does not cost money and gets you to where you need to be, driven by the end consumer, not by government spending.
David Roberts
Hallelujah to that. All right, you guys, this was awesome. This is just what I wanted. This question has come up many, many times from my listeners and audience. We’re always talking about soft costs. They’re saying, “What do you mean and what do you do about them?” I think this is extraordinarily illuminating for everyone and I hope people will take it and run with it. Thank you both for coming on and walking us through it.
Andrew Birch
Really appreciate it. Thank you.
Nick Josefowitz
Thank you so much for having us. It’s the “make it cheap” agenda.
David Roberts
Exactly. Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I’ll see you next time.
