I had the same thing pop up in a residential generator installation. The mechanical (or was it plumbing?) inspector said it was too close to the wall, and raised the issue with the electrical inspector, who agreed with him and failed me.
My inspector said the county had no exact specs ("I can't define it, but I know compliance when I see it."?), but that we had to follow the manufacturers instructions (of course.) Naturally, the instructions said to comply with local requirements.
Somehow, I ended up proving I was compliant by showing there were no requirements I failed to meet. There were no louvers on the back side of the cabinet.
The customer wanted the genny tucked as much behind the bushes as possible to shield it from visibility from the street.