As part of the U.S. Department of Energy's (DOE) SunShot Initiative, Energy Secretary Steven Chu announced up to $7 million to reduce the non-hardware costs of residential and commercial solar energy installations. Made available through the SunShot Incubator Program, this funding will support the development of tools and approaches that reduce non-hardware, or "soft" costs, such as installation, permitting, interconnection and inspection. These expenses can amount to up to half of the cost of residential systems. The Incubator will make the process of buying, installing and maintaining solar energy systems faster, easier and less expensive.

Since 2007, DOE has invested $60 million in the Incubator program for photovoltaics, accelerating the development of technologies that have attracted more than $1.3 billion in private investment. Traditionally, the Incubator primarily focused on solving hardware challenges. This new round of funding applies to the soft costs of installing solar systems and acknowledges the vast potential for cost reductions in this area.

"Even if you paid nothing for the hardware, you'd still pay thousands of dollars to install a residential solar power system," said Secretary Chu. "This SunShot Initiative will help reduce costs such as permitting and installation, and spur American innovation to deploy solar energy at homes and businesses across the country."

The balance of system soft costs addressed by this funding opportunity include any non-hardware aspects of an installed solar energy system, such as labor, permitting and inspection, customer acquisition, financing and contracting. This initiative complements the SunShot program's Rooftop Challenge, which supports innovative approaches to information technology systems, local zoning and building codes and regulations in order to simplify and expedite permitting processes. The solicitation seeks applicants that will develop data-driven software tools, streamlined processes and innovative approaches, to reduce non-hardware cost.

Funding will be awarded in two tiers:

-         Tier 1 includes awards up to $500,000 with a 20 percent cost share over 12 months to accelerate the development of innovative non-hardware concepts. DOE may issue approximately 3–5 awards in this category.

-         Tier 2 includes awards up to $5 million with a 50 percent cost share over 18 months to transition innovative systems and solutions to the demonstration stage and eventually to full-scale deployment. DOE may issue approximately 1–3 awards in this category.

 A primary objective of the SunShot Incubator Program is to launch new start-up businesses and new business units within existing commercial entities. Concept paper applications are due by January 16, 2012. For more information and application requirements, visit the Funding Opportunity Exchange website.