The federal government will award $12 million in grants designed to cut the cost of installing solar power in homes and businesses.

The funding is part of the U.S. Department of Energy’s (DOE) SunShot Incubator Program, which was launched in 2007. Earlier rounds of funding focused on reducing the price of solar panels and related hardware. The new funds will go to start-up companies with innovative ideas for cutting non-hardware expenses — including customer acquisition, permitting, financing, installation and inspection — that can make up nearly 50 percent of solar installation costs.

Assistance from the incubator program will help companies “cross technological barriers to commercialization while encouraging private-sector investment,” said outbound Federal CTO Aneesh Chopra in a Tuesday (Feb. 7) conference call announcing the new funds.

The program is a two-tiered process. Recipients get up to a half million dollars for a year-long initial development phase. The second tier provides as much as $4 million over two nine-month periods to commercialize the idea and deploy it nationwide.

“SunShot is really the Apollo mission of our time,” according to DOE officials during the announcement. “Our goal is to decrease the costs of solar energy by 75 percent so that by 2020, solar is cost-competitive with traditional forms of electricity.”

Since its inception, the incubator program has pumped nearly $60 million into 34 companies. Last November, the DOE announced it would award $7 million in funding through the incubator program and do so through a two-tier process as well.

DOE officials say reducing installation and other soft costs is key to boosting solar adoption.

Chopra said since 1980, the average cost of buying a solar photovoltaic module has fallen dramatically. But even if solar hardware was free, consumers would still pay thousands of dollars to install a residential solar system, he said.

The DOE’s efforts to reduce soft costs ties with the SunShot’s program “Race to the Rooftop,” challenge, which awarded resources to more than 22 regions across the U.S. to promote simplifying the permitting process.

Sarah Rich, Staff Writer Sarah Rich  |  Staff Writer

In 2008, Sarah Rich graduated from California State University, Chico, where she majored in news-editorial journalism and minored in sociology. Since 2010, Sarah has written for Government Technology magazine and covers a spectrum of public-sector IT topics, including cloud computing, transparency, broadband, and other innovative projects and trends. She currently lives in Sacramento, Calif.