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Commercial Solar PV Permit Campaign:
Alameda, San Mateo, and Santa Clara Counties
Oct. 12, 2010 Press Release Announcing Report Release
Oct. 13, 2010 Article in San Jose Mercury News newspaper
Commercial Solar Permit Fee Report:
Alameda, San Mateo, and Santa Clara Counties
Executive Summary
A mid-2010 survey by the Sierra Club revealed wide variation in permit fees charged for commercial rooftop photovoltaic (PV) energy systems by municipalities in three counties in the San Francisco Bay Area. The survey found that fees for commercial PV projects of 131 kW in size varied from $0 to over $13,000. High fees can discourage businesses from making good, long-term, high-yield investments in solar power. 37% of the surveyed municipalities are charging fees that exceed the maximum cost-recovery levels identified in this report.
The time needed for city staff to review and inspect a commercial PV project does not vary linearly by system size. For instance, interviews conducted in the preparation of this report revealed that the difference in time needed to process a 100 kW PV project is about two to three times longer than a 10 kW project (not ten times longer). Basing fees on the value of the solar equipment inflates permit costs to unreasonably high levels, especially for larger, more expensive solar power projects. To recover costs, therefore, permit fees should be based on specific review times and billable hourly rates and not on PV project valuations.
This report recommends best practices that municipalities can adopt to assure greater consistency, and help businesses develop an energy source that leads to a healthier, safer, and more stable community. These include setting permit fees at cost-recovery levels, and instituting streamlined permit processing procedures.
Figures summarizing survey results
Full Report
Introduction
From 2008 to 2010, Sierra Club volunteers conducted surveys of municipalities in Alameda, San
Mateo and Santa Clara counties to determine their permit fees for installing roof-mounted
photovoltaic (PV) solar electric systems on commercial structures. The volunteers are using those
surveys as part of a campaign to encourage the growth of renewable solar energy as a local solution to
the global problem of climate change. The goal is to encourage such growth by quantifying some of
the financial hurdles that solar customers and contractors face and using that information to negotiate
more reasonable fees with local governments. This website provides an overview of the campaign in
terms of the timeline of events and an explanation of the main issues.
The surveys described here only cover PV installations on commercial structures. Such structures can
include:
- Commercial buildings
- Industrial facilities
- Churches
- Schools
- Non-profit buildings
The surveys specify three system sizes: 8 kW, 49 kW and 131 kW. The volunteers asked each
jurisdiction the same question to ensure comparable answers.
Read the questions used in this survey.
The intent of the surveys is to determine the total estimated fee that an applicant would pay to the
local permitting authority. This includes all fees that a permitting authority would charge, including
but not limited to:
- Plan check fee
- Permit issuance fee
- Electrical fee
- Structural review fee
- Fire department review fee
- Document processing fee
- California state fees (e.g. Seismic Motion Instrumentation Program fee, California Building
Standards Commission fee)
- Any other fees that are charged or rebated in accordance with commercial PV permit reviews,
issuance and inspections
Some cities had little or no experience permitting large PV systems and were unsure how to respond
to our surveys. Others were confident in their responses, as their governments may have formally
adopted PV permit fee schedules. [NOTE: these solar permit fee policies may be partly the result of
municipality responses to the Sierra Club's residential solar permit fee campaign between 2005 and
2007, in California's Silicon Valley].
2008
In 2008, Sierra Club volunteers surveyed municipalities in Alameda, San Mateo and Santa Clara
counties to determine their estimated total permit fees for installing roof-mounted PV solar electric
systems on commercial structures.
2009
On April 1, 2009, the Loma Prieta and San Francisco Bay chapters of the Sierra Club contacted 16
municipalities with fees exceeding $5,000 for a 131 kW system. The chapters did this to notify these
cities that their solar permit fees were unreasonably high and request that the cities review their solar
permit fee calculation methods, as they might be charging fees higher than cost recovery levels
(which violates the intent of the California Solar Rights Act). California Government Code, Section
65850.5(a) states: "It is...the legislative intent to encourage the installation of solar energy systems
by removing obstacles to, and minimizing costs of, permitting for such systems." Also, California
Government Code Section 66014 provides that fees associated with building inspections and building
permits "shall not exceed the estimated reasonable cost of providing the service for which the fee is
charged."
From April 1 to 21, 2009, most of the contacted municipalities responded by:
- Starting the process of reviewing their solar permit fees or
- Promptly making policy changes to compute fees in a supportive way or
- Correcting their initial survey responses, claiming the results were inaccurate.
2010
Kurt Newick, Chair of the Global Warming and Energy Committee at the Loma Prieta Chapter of the
Sierra Club, re-surveyed all of the municipalities in the summer of 2010 between June 20, 2010 and
Aug. 17, 2010 for the same counties (Alameda, San Mateo and Santa Clara). Newick conducted this
2010 survey primarily using Zoomerang (an Internet-based survey tool), follow up calls were made to
the cities that did not respond to the email/internet survey to complete the survey. A separate survey
was performed for each county to show PV permit fee survey results collected from the local
jurisdictions in the 2008/2009 commercial PV permit fee survey for the same three PV system sizes
(8 kW, 49 kW & 131 kW). Each chief building official (CBO) for these entities was invited to respond
to the survey online or by phone, fax or email.
Here are the 2010 commercial PV permit fee surveys:
Alameda County
San Mateo County
Santa Clara County
You can visit the following Google Docs
spreadsheet to see the results comparing the fees in all the
surveyed cities in the 2008, 2009 and 2010. The 2010 survey fees are itemized in the Comments
column for municipalities that provided that level of detail.
Responses for the 2010 survey were confirmed with each CBO between July 10, 2010 and August 13,
2010.
On October 3, 2010 all 12 municipalities in the survey area with PV permit fees over $5,000 for a 131 kW system were sent official Sierra Club, Loma Prieta Chapter email letters requesting that their commercial PV permit fees be reviewed. The cities were asked to lower their fees and set them to no higher than cost recovery levels.
Specific recommendations and ranking charts were included as attachments to this email letter to the jurisdictions.
On October 4, 2010 a PV permit fee report for commercial systems was published to put the survey data
into perspective by showing ranking data graphically by fee and also alphabetically by municipality.
The report included comments showing the changes in PV permit fees from 2008 to 2010. With the
goal of enabling municipalities to recover costs, this report has specific recommendations to resolve
common problems relating to permit processing and fee calculation for commercial PV systems.
Link
to PDF file of this Commercial PV Permit Fee Report
On 10/12/2010 a news release announcing the
2010 PV permit fee study for commercial systems will be sent to the news media (primarily local newspapers).
Solar Permit Fee Calculation Methods
Permit Cost Factors
Municipalities with high fees typically calculate them based on the claimed full valuation of the
project, including the cost of the solar panels and inverters. This method is inappropriate, as it tends
to increase fees above cost recovery levels. The cost of the solar panels has no legitimate correlation
to the cost of processing a permit and inspecting the installation! The resources needed to process a
PV permit depend largely on the process itself. This process primarily depends on the following
factors:
- Permit submittal requirements
- Completeness of the permit submittal package, in terms of the quality and quantity of its
information
- Permitting staff availability and promptness
- Knowledge level of the permit plan reviewer and inspector
- Quantity of equipment being inspected
- Number of inspections (including the number of rejections)
- Quality of the PV installation
Proposed Permit Fee Calculator
For a municipality to recover costs, it must base its permits fees on a billable hourly rate for the plan
review and inspection. To help illuminate the permit process in terms of time and money, Scott
Troyer & Kurt Newick created a free spreadsheet,
public fee calculator to help municipalities
determine cost recovery levels.
This spreadsheet shows a detailed calculation method for cost recovery that cities can use to estimate
PV permit fees for commercial systems. This spreadsheet accounts for the average number of hours a
jurisdiction will likely spend on each phase of the PV permit process. This spreadsheet is
downloadable and customizable: interested individuals can enter each jurisdiction's average review
times and required review steps and billable hourly rate along with the PV system size to determine
what an estimated permit fee should be for cost recovery of the jurisdiction.
This spreadsheet comes with a default range of permitting staff times needed to permit a 10 kW and a
100 kW commercial PV system. By customizing this spreadsheet with the billable hourly rate and by
entering in the average review times necessary for each of the various steps for the two primary
permitting functions (plan review, inspections), as well as accounting for processing steps for 2nd
cycle plan reviews and inspection turn down rates, a fairly accurate estimate of commercial PV
permit fee amounts that enables cost recover for the permitting authorities can be easily and precisely
computed! This spreadsheet has a feature that uses a logarithmic formula that considers the
difference between the average range of times and processing steps required to permit a 10 kW and a
100 kW PV system. According to interview responses from permitting jurisdictions that have some
experience with commercial PV system permit issuance, the time needed to permit a 100 kW PV
system is about twice as much as for a 10 kW system (definitely not 10 times as much). Thus it is the
PV permit fee study authors' opinion that a base 10 logarithmic scale to compute fees using the
difference between the average permit review staff times for these 2 PV system sizes should be
roughly accurate for most small to large scale rooftop commercial PV systems (from 1 kW up to 1
MW in size).
Related Links and Information
A memorable web domain name (www.SolarPermitFees.org) links to the main
PV permit fee campaign web
page at the Loma Prieta Chapter of the Sierra Club.
PDF links to ranking charts:
PDF links to PV Permit Fee Calculator runs (estimated reasonable and maximum fees):
Link to PV Permit Fee Calculator for Commercial Rooftop Systems (excel spreadsheet)
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By the numbers:
Loma Prieta Global Warming Activists: 3041
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