Reducing Local Barriers to the Installation
of Solar Power Systems in California
Humboldt County Commercial and Residential Solar Permit Fee Study (Nov. 2011)
Placer County Commercial and Residential Solar Permit Fee Study (Oct. 2011)
Yolo County Commercial and Residential Solar Permit Fee Study (Oct. 2011)
Solano County Commercial and Residential Solar Permit Fee Study (September 2011)
Santa Cruz County Commercial and Residential Solar Permit Fee Study (Aug. 2011)
Sacramento County Commercial and Residential Solar Permit Fee Study (Aug. 2011)
Los Angeles County Commercial and Residential Solar Permit Fee Study (April 2011)
Sonoma County Commercial and Residential Solar Permit Fee Study (Jan. 2011)
San Luis Obispo County Commercial Solar Permit Fee Study (Jan. 2011)
Ventura County Commercial Solar Permit Fee Study (Dec. 2010)
Contra Costa County Commercial and Residential Solar Permit Fee Study (Dec. 2010)
Marin County Commercial and Residential Solar Permit Fee Study (Dec. 2010)
Orange County Commercial Solar Permit Fee Study (Dec. 2010)
Napa County Commercial and Residential Solar Permit Fee Study (Dec. 2010)
San Diego County Commercial Solar Permit Fee Study (Nov. 2010)
Alameda, San Mateo and Santa Clara Counties: Commercial Solar Permit Fee Study (Oct. 2010)
Background
The Loma Prieta Chapter area is blessed with abundant sunlight
which is the most plentiful precisely at the season-summer-- when
our region's electrical energy demand is greatest.
Cost remains an important barrier to the wide use of solar PV
systems. The unsubsidized price of residential solar electric
power can be greater than the direct cost of power from fossil
fuels (not accounting for the external environmental impacts)
– depending on electric rates.
Several factors including the price of materials, labor, and
permitting fees contribute to this cost. In California, financial
incentives offered by the state and federal governments have made
the economics of solar electric systems more favorable in most
of the greater Silicon Valley region. Local government actions
contribute to the cost of solar directly through permitting fees
and indirectly through varying permitting requirements and times,
which contribute to increased costs through red tape and bureaucratic
processes.
The Chapter's Residential Solar Permit Fee Studies
Starting in June 2005, the Chapter's Global Warming and Energy
Committee(GWEC)undertook a study of Solar Permit fees charged
by cities in the greater Silicon Valley region. This study compared
the cost of fees to install solar photovoltaic (PV) systems and
received a great deal of press attention. The study publicized
major disparities in the fees charged by different cities and
led to actions by 24 cities (in Silicon Valley) to significantly
reduce their fees (and a total of 52 cities in the greater Bay
Area region), removing a small but important barrier to the installation
of solar PV.
Read the Residential Solar Permit Fee Study for Northern California
Read a non-technical summary of the Residential Solar Permit Fee Study
Issued June 2009: Read the Chapter's extension of its Residential Solar Permit Fee Study to Southern California cities in partnership with the Angeles Chapter
See residential solar PV permit fee rankings for 3 kW systems for 25 surveyed counties throughout California as of Dec. 2011
See residential solar PV permit fee rankings for 3 kW systems for all San Francisco Bay Area cities and the counties of: Humboldt, Placer, Sacramento and Yolo as of 2011
See residential solar PV permit fee rankings for 3 kW systems for Southern California cities as of 2011
The Chapter's Commercial Solar Permit Fee Studies
The success and recognition of the Residential Solar Permit Fee Study has
led to Chapter involvement to extend its solar permit fee studies to commercial (non-residential) systems.
See commercial solar PV permit fee rankings for 131 kW systems for 19 surveyed counties throughout California as of Feb. 2012
See commercial solar PV permit fee rankings for 131 kW systems for San Francisco Bay Area cities as of 2011
Media Stories on Sierra Club PV Permit Fee Campaign
View over 150 newspaper articles on the Sierra Club PV permit fee campaign (organized by county)
PV Permit Fee Campaign Methodology and History
How Sierra Club volunteers conducted the PV Permit Fee Campaign
Pending California State Legislation on Solar Permits
In the 2012 California state legislative session there are 3 bills relating to solar permits:
• SB 1222 (Leno): Caps PV permit fees. Will prohibit cities and counties from charging more than a reasonable amount with specific dollar amount caps on allowable solar PV permit fees.
• AB 1801 (Campos): Requires solar permit fees to be computed based on actual jurisdictional costs and specifically prohibits fees from being computed based on PV system valuations. This will impact solar permit fees for all sizes and types of solar energy systems.
• AB 2135 (Blumenfield): creates guidelines and standards for solar permit processing.
Wrong Way to Compute Fair PV Permit Fees
Basing fees on the value of the solar equipment tends to 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!
In the spring of 2009 the Sierra Club, Angeles Chapter, did a survey of all southern California jurisdictions. One of the questions asked was designed to learn which method the jurisdictions use to compute the total permit fee: a “valuation method” which bases the fee primarily on PV project valuations, or a “fixed method” that computes the fee in other ways. Here are the summary results of this April 2009 Survey for 250 southern California jurisdictions:
When a “valuation method” is used to estimate a PV permit fee for a 3 kW residential system:
• 83% charge over a reasonable maximum cost recovery amount*, 96 of 116 jurisdictions.
• 17% charge under a reasonable maximum cost recovery amount*, 20 of 116 jurisdictions.
When a “fixed method” is used to estimate a PV permit fee for a 3 kW residential system:
• 8% charge over a reasonable maximum cost recovery amount*, 10 of 123 jurisdictions.
• 92% charge under a reasonable maximum cost recovery amount*, 113 of 123 jurisdictions.
*A reasonable maximum cost recovery amount is defined as $485 for a residential PV permit (most jurisdictions can fully recovery their costs with a much lower fee).
Below are links to the detail data that documents the original April 2009 solar PV permit fee survey responses for southern California cities and counties that shows the relationship between high fees and the “valuation method” and low fees and the “fixed method”:
PV permit fee ranking, southern California jurisdictions as of April 2009, sorted by fee
PV permit fee ranking, southern California jurisdictions as of April 2009, sorted by valuation/fixed method
Fair Permit Fees for Residential Rooftop PV Systems
A fixed fee approach that does not vary with system size encourages larger PV projects while enabling cost recovery. A tried and true fee assessment methodology that enables cost recovery will conform to these principals:
• Determine the staff time required to review and inspect an average project that will on average cover your costs 80% of the time for the required permit processing time, assuming a well trained staff and a professional permit submittal/installation.
• Allow for 1 minor failed correction to plans and 1 minor turn down for inspection, as perfect agreement between the permitting staff and installer should not be assumed and 1 round of minor corrections should be accounted for when developing a reasonable fee schedule.
• Then to estimate the permit fee multiply the billable hourly rates for each job function by the staff time required for each task and this becomes the estimated total permit fee.
• For exceptional cases that do not conform to the norm (which will likely be about 20% of the permits) simply charge by the hour for the staff time for both the plan reviews and inspections based on the billable hourly rate for the job function (to enable true cost recovery this billable hourly rate should be fully burdended so that it includes direct and indirect costs, as well as jurisdictional overhead).
Residential PV Permit Fee Calculation Method
We recommend a fixed permit fee that does not vary with system size or value (within reason) for rooftop, residential, grid-tied PV systems up to 15 kW using the above principles and based on these assumptions:
• A professional installation where the permit application meets permit submittal guidelines.
• Over the counter, same day, permit issuance. This can significantly reduce administrative processing, saving valuable staff time compared to a permit that is taken in for later review!
• Plan checkers and inspectors are trained in PV installations.
• A fully burdened realistic billable hourly rate to account for staff time spent. This billable hourly rate varies significantly among municipalities, thus each city should use its own rate to determine a fee level that is the most appropriate for cost recovery!
• 45 minutes for the plan check.
• One hour for the inspection (two 30 minute inspections assumed).
• 45 minutes for miscellaneous permit processing tasks (permit issuance, communication with the applicant, filing, etc).
Example of computing a cost recovery residential PV permit fee
• 45 minutes for plan check X $140 per hour for plan reviewer = $105
• 1 hour for inspections X $125 per hour for inspector = $125
• 45 minutes for administration tasks X $100 per hour for permit technician = $75
Residential PV permit fee that enables cost recovery: $305 (summing the above $105 + $125 + $75)
Commercial PV Permit Fee Calculation Method
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 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). Some efficient jurisdictions can do plan reviews and inspections for large commercial PV projects that take only slightly longer than a medium sized commercial PV project.
Excel Spreadsheet to determine fair PV permit fees for Commercial Rooftop PV systems
Maximum PV permit fee caps
Here are suggested maximum PV permit fee caps which should easily enable full cost recovery for PV systems installed by qualified professionals. Most jurisdictions will be able to fully recovery their costs for fees lower than these suggested maximums. These maximum fees were derived based on a large number of jurisdictional staff hours and for jurisdictions with relatively high billable hourly rates (this combination may be uncommon, as jurisdictions with high billable hourly rates may also have well trained plan reviewers and inspectors who are efficient at processing PV permits).
Note: PV system sizes are in DC watts for these calculations.
• up to 15 kW DC (residential): $400 maximum PV permit fee cap
• 15kW - 50 kW (small commercial): $400 + $25 / kW (for each kW between 15 and 50)
• 50 kW - 200 kW (medium commercial): $1,275 + $12 / kW (for each kW between 50 and 200)
• over 200 kW (large commercial): $3,075 + $5 / kW (for each kW over 200)
Examples of how these fee caps are computed for three PV system sizes over 15 kW:
• 35 kW: $400 + ((35 kW - 15 kW) X $25/kW) =
$900 max PV permit fee cap
• 150 kW: $400 + ((50 kW - 15 kW) X $25/kW) + ((150 kW - 50 kW) X $12/kW) =
$2,475 max PV permit fee cap
• 500 kW: $400 + ((50 kW - 15 kW) X $25/kW) + ((200 kW - 50 kW) X $12/kW) + ((500 kW - 200kW) X $5/kW) =
$4,575 max PV permit fee cap
Leader of Sierra Club PV Permit Fee Campaign in California
Kurt Newick Close Up: What is The Power of One Individual?
|
