Must permit fees be obstacles for solarizing businesses?
Sierra Club volunteer survey finds wide discrepancies in fees, some clearly unreasonable
When a government service is free in some places and costs almost $40,000 in others, you begin to wonder. When this range of costs applies to the permit fees for businesses to install photovoltaic (PV) solar panels, the discrepancy is a matter for concern. Local governments should encourage solar installations, and not charge prohibitive inspection fees. The state Supreme Court has ruled that permit fees must be based on the "estimated reasonable costs of providing the services for which the fees are charged". Unfortunately, some jurisdictions seem to have missed the message.
Two years ago, volunteers from the Loma Prieta, San Francisco Bay, and Redwood Chapters surveyed the permit fees that local jurisdictions in Northern California charge for home solar installations. They found huge variation - but after they publicized their results, over 2/3 of the jurisdictions lowered their fees, some greatly. Now some of the same volunteers, Kurt Newick and Carl Mills of the Loma Prieta Chapter Global Warming and Energy Committee, have extended their research with a survey of permit fees for non-residential solar systems (for businesses, schools, hospitals, government buildings, and non-profit organizations) in Santa Clara, San Mateo, and Alameda Counties. The new survey compares permit fees for 8 kW (kilowatt), 49 kW, and 131 kW PV systems valued at $74,000, $475,000 and $1,200,000 respectively.
As before, the survey found huge variation, with some fees high enough to be a major discouragement for customers.
"High fees undermine the PV industry itself too," said Newick. "Most companies that install PV systems are tiny compared to the corporations that provide dirty energy from coal, oil, and gas. High fees hurt smaller companies more."
Permit fees are a legitimate means for local governments to cover the costs of assessing whether a PV system plan meets health and safety standards and of inspecting it after installation. Such assessments protect people and the electric grid from faulty wiring, improper mounting, and insufficient roof support.
Newick, who has worked for PV installer Horizon Energy Systems for six years, points out, however, that building departments often base fees on the value of the PV system instead of the staff-hours needed. "The staff-hours needed to process a 49 kW system aren't much less than the staff-hours needed to process a 131 kW system." Nevertheless, in some cities the permit for a 131 kW system can be over $20,000 higher than for a 49 kW system.
The authors have prepared estimates of reasonable cost-based maximum permit fees. Assuming a billable rate of $180/hour for staff-hours (this varies among municipalities), a professional permit submittal, and a knowledgeable inspector, they estimated:
- 8 kW: one hour for the plan check, one hour for the inspection, and one hour for miscellaneous = three hours x $180 = $540;
- 49 kW: two hours for the plan check, two hours for the inspection, and one hour for miscellaneous = five hours x $180 = $900;
- 131 kW: four hours for the plan check, four hours for the inspection, and two hours for miscellaneous = 10 hours x $180 = $1,800.
An 8 kW system (costing about $75,000) might be appropriate for a suite of doctors' offices. A 49 kW system (about $475,000) would power a 30,000- square-foot commercial office building. A $1,200,000 131 kW system might power a specialty grocery store. For comparison, the Colorado legislature in 2008 set a $1,000 statewide maximum permit fee for non-residential PV systems of any size.
Many of the cities surveyed reported never having processed a non-residential solar installation. We hope and expect growing interest among businesses in solar energy, and we hope that permit fees will no longer be an obstacle.