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HomeMy WebLinkAboutItem 5.1 Solar Energy Building Permit Fees CITY CL~RK . File # D[!j1[!E[O]-l:LJ[Q] AGENDA STATEMENT CITY COUNCIL MEETING DATE: August 15, 2006 SUBJECT: ATTACHMENTS: RECOMMENDATION: ~ 2) 3) ~ FINANCIAL STATEMENT: DESCRIPTION: Solar Energy Building Permit Fees: Request by the Sierra Club to review the permit fees for rooftop photovoltaic solar panels. Report Prepared by Gregory Shreeve, Building Official );:y--- 1) Letter from Tom Roberts, Sierra Club San Francisco Bay Chapter. Letter from Lois Wolk, Assembly Member, Eighth District. A Comparative Study of Solar Electric Permit Fees in the North / East S.F. Bay Area. Prepared by Carl Mills and provide by the Sierra Club. 2) 3) 4) Receive the Staff Report; Receive public comment; Direct Staff to return with a flat fee approach for both PV systems and solar pool heating systems based on the Tri Valley average; or Provide Staff with other direction. Building permit fees for solar permits are based on full cost recovery that is permitted by law. Full cost is defined as including both the indirect or administrative cost and the direct cost of the service. It is estimated that the average amount for a photovoltaic permit is $644. On July 18,2006, the City of Dublin received a request from Mr. Tom Roberts, Energy Sub-Committee Member, Sierra Club, San Francisco Bay Chapter, for a formal review of the permit fee and the process for rooftop photovoltaic (PV) solar panels. The letter states that the City of Dublin is one of the more expensive cities for permits (Attachment 1). ANALYSIS: There are two different types of Solar Energy Systems: 1) photovoltaic or PV for production of electrical energy; and 2) solar heating panels used for the heating of water; this type of system is commonly used for swimming pools. Although the request by the Applicant was to review the costs and fees with PV COPY TO: Sierra Club S.F. Bay Chapter ------------------------------------------------------------------------------------------------------------- G:\Agendas\2006\Solar Fees\Solar Fee Review CCSR-8-1 S-06.doc Page 1 of 4 5.1 ITEM NO. systems, Staff has also reviewed costs and fees for solar water heating panels used in conjunction with swimming pools. Photovoltaic (PV) Systems: The frequency of permits requested for PV systems is increasing. For example, from FY 1999-2000 - FY 2004-2005 the City issued a combined total of seven permits. However, in FY 2005 - 2006 seven permits were issued in that year alone. In FY 2005-2006, PV systems ranged in valuation from $5,000 to $54,000. The following table outlines the statistics on the seven permits issued during FY 2005-2006: Kilo- Valuation *Estimated Estimated Plan (Over) / Percentage of Watts City Hours City Costs Check Under Permit Fees on Project (Current and Collected to Project hourly Rate Permit Valuation of $123.52) Fees Collected 2.9 $17,000 5 $617.60 $540 $77.60 3.2% 3.5 $19,536 5.5 $679.36 $600 $79.36 3.1% 3.5 $16,000 4.5 $555.84 $520 $35.84 3.2% 4.5 $27,000 5 $617.60 $740 ($122.40) 2.7% 10.26 $54,000 6 $741.12 $1248 ($506.88) 2.3% 3.5 $20,000 5 $617.60 $600 $17.60 3.0% 4.5 $5,000 5.5 $679.36 $250 $429.36 5.0% Average 5.2 $644.07 $642.57 Table One City of Dublin PV Permits 2005- 2006 *Estimated hours include permit technician review to determine a complete application and the minimal information required for review by the electrical plan checker, plan check time, permit issuance time, and inspection time (inspection time includes travel time, review of permit and plans on site, and inspection of system). The Sierra Club recommends "$300 as a reasonable maximum for solar permit fees." The Sierra Club states "This amount would cover most or all of the services a city must perform to ensure that a PV installation meets engineering and safety standards, as it normally takes between 2 to 5 hours to permit and inspect a residential PV system" (Section 3.2 of Attachment 3). As noted above, the average City time spent on each PV solar panel system is 5.2 hours at a cost of $644.07 per permit. Therefore, ifthe City were to establish a flat fee, $644 should provide for full cost recovery. However, as contractors become more proficient in the permit process and the installation of PV syst~ms, a reduction in City Staff time may be realized. To follow up on the Sierra Club's research, Staff contacted seven of the cities listed in the survey and asked the same question listed in the Sierra Club survey. Table Two, below, summarizes the results ofthe City's survey. The survey found that the average building permit fee on PV systems for the Tri-Valley (Pleasanton, Livermore, San Ramon and Danville) is $374.62. Page 2 of 4 Ci Pleasanton Table Two Com arison of Surve Sierra Club Surve $200 Livermore $280 Results Ci of Dublin Surve $138.50 ($23.50 permit fee, $30.50 for the disconnect, $30.50 for the inverter and $3.00 per panel- Staff assumed 18 anels for a 3kW s stem $276 (ifless then 1 hour of inspection time, additional charges for time and material for any inspection time over the first hour $283.97 $800 $532.31 $430.35 $2.70 (City Council has waived all City fees to promote solar anels, the $2.70 fee is a state mandate fee ossible reduction ofthe fee to $400 San Ramon Danville Concord San Leandro Mill Valley $285 $850 $600 $1,100 $3 Water Heating Systems: During FY 2005-2006, the City of Dublin issued two building permits for solar pool heating systems that were not part of a new swimming pool installation; both systems were valued at $3,000 with a permit fee of $170. Staff estimates that 1 ~ hours of City time was spent on the processing and inspection of each system, at a cost of$185.28 per permit. Between fiscal years 1999-2000 and 2004-2005, sixteen permits for solar pool heating systems were issued by the City. The valuations of these systems ranged from $2,479 to $5,565 and permit fees ranged from $170 to $250. Staff did not review solar heating panels that were permitted at the same time as the swimming pool. When solar heating systems are installed at the same time as the swimming pool, the extra inspection time and permit fees are minimal. Table Three, below summarizes the results ofthe City's survey: Table Three Surve Results for Solar Pool Heatin Panels Ci of Dublin Surve $41.00 ($23.00 for the plumbing permit and $3 per panel - Staff assumed 6 anels) $207 (based on s uare foota e of s stem $230 (valuation based $110 (one inspection, flat fee - all inspections after first are $60 per ins ection) Concord $200 valuation based San Leandro $300 valuation based Mill Valle $55.70 $2.70 state fee and $53 lumbin ermit * Staff used the following data for the survey: $3,000 valuation, 6 panels that are roof mounted and the permit is not issued at the same time as the swimming pool. Ci Pleasanton Livermore San Ramon Danville The above survey found that the average building permit fee on swimming pool solar water heating panels for the Tri -Valley (Pleasanton, Livermore, San Ramon and Danville) is $147.00. Page 3 of 4 Based on the information above, it is recommended that the City Council direct Staffto develop flat fee permits for both PV systems and solar pool heating panels based on the Tri-Valley average. As noted above, the average permit for PV systems in the Tri-Valley average is $375 for PV systems and $147 for pool heating systems. If the flat fee permit approach is the City Council's direction, Staffwould return with a draft ordinance at a future City Council meeting. RECOMMENDATION: Staff recommends that the City Council: 1) Receive the Staff Report, 2) Receive public comment, and 3) Direct Staffto return with a flat fee approach for both PV systems and solar pool heating systems based on the Tri Valley average; or 4) Provide Staff with other direction. Page 4 of 4 SIERRA CLUB / tJ p.201 RE(~E~\lED CITY FOUNDED 1892 -1,'1 ~:~ San Francisco Bay Chapter Serving the counties of Alameda, Contra Costa, Marin and San Francisco CITY MANAGER'S OFFICE July 17,2006 Richard Ambrose City Manager 100 Civic Plaza Dublin, CA 94568 Re: Request that you formally revi~'V the permit fee/proces~ for rooftop photovoltaic (PV) solar panels Dear Mr. Ambrose: Weare writing to inform you that Dublin might be overlooking an opportunity to increase its supply of renewable energy. Our study on solar permit fees in 48 jurisdictions (in Alameda, Contra Costa, Marin, and San Francisco counties ) indicates that Dublin is one of the most expensive for homeowners who wish to install rooftop solar panels (see enclosed comparative chart). For a 3kW solar system valued at $27,000 before the California Energy Commission rebate, your staff informed us that Dublin charges $740 for the permit as of Summer 2006, compared to $3 in Mill Valley. (This assumes a professionally installed system that is mounted flush to the roof, is 320 square feet, and has a weight load of 3 pounds per square foot.) The importance of renewable, locally produced energy is self-evident in light of recent events. Consider PG&E's 71% increase in natural gas rates as of October 1,2005, over 12% increase in residential electric rates on January 1, 2006, and California's rolling blackouts in 2001, etc. California generally, and our region specifically, faces rising energy demand, diminishing in- state/regional generation, and increasing dependence on fossil fuel imports from unstable sources. Citizens are increasingly aware that rooftop solar panels are an obvious means to alleviate these problems. A Field Research Institute poll of 954 Californians done in June 2005 found that 77% support increasing the state's investment in solar energy. Several municipalities in our region are contributing their part to promote the installation of . solar systems. For example, Mill Valley and Dublin issue solar permits over-the-counter, and are among the twenty-four jurisdictions in our survey with fees under $300. We ask that you consider the recommendations in our study to reduce permitting fees and delays. You can download a full copy of the study from: http://lomaprietasierrac1ub.org/global_warming/artic1es/pv-permit_study_NE _ Bay.pdf (Continued on reverse) 5,/ <g/t6/0b 2530 San Pablo Ave., Suite I, Berkeley, CA 94702 Tel. (510) 848-0800 E-mail: sanfrancisco-hay.chaf, Attachment 1 :l of 2~ Our recommendations in brief are as follows: . Reduce solar permit fees to $300 or less for standard residential PV installations to make such installations more feasible for middle-income homeowners. . Use the flat-fee method instead of the valuation-based method to assess solar permit fees. The time and resources required to review and inspect standard residential PV installations are similar regardless of the installation's cost, size or output. . Streamline the process for reviewing solar applications and inspecting solar installations. A process that is quicker for solar customers is also cheaper for your city. . Revise permit fees downward to account for the new California Solar Rights Act, which makes prohibitions based on aesthetic concerns illegal. (see attached letter from Assembly member Lois Wolk on this issue). AB 2473 became law in California on January 1, 2005. It expressly declares the state legislatures intent that solar energy system permitting costs shall be minimized. California Government Code section 66005 (a) specifies, "[development permit] fees or exactions shall not exceed the estimate reasonable cost of providing the service. . ." On December 22, 2005 the California State Supreme Court upheld this statute. To permit and inspect a typical residential PV system normally takes between 2 to 5 hours (regardless of size, since the amount of work is essentially the same). Thus we recommend that an appropriate fixed fee for a PV permit that is based on the actual time and effort needed to permit and inspect a PV system be no more than $300. We base this recommendation on extensive reviews of solar permitting costs for many local jurisdictions that have much experience with PV installations. We appreciate your consideration of our request and welcome the opportunity to meet with you to discuss implementation of our recommendations. If you have any questions about the report, please feel free to contact me, Tom Roberts (415-203-2781), or Stan Van Velsor (650-390-8441). I look forward to hearing from you soon. We will be following up with your head building official on this issue in the near future. Sincerely, ~~ Tom Roberts Energy Sub-committee Member Sierra Club, San Francisco Bay Chapter 2530 San Pablo Avenue, Suite 1 Berkeley, CA 94702 AVERAGE ' PV Permit Fees in the North/East S.F. Bay Area as of 07/13/2006 $475 I I I I ! ----, I I ! I ! i j I Mill Valley $3 I Tiburon:1' $35 I Pleasant Hill $55 i , Walnut Creek $65 I Belvedere $73 I San Anselmo $80 I San Francisco $85 I San Pablo. $93 ' Ross "C,l". .'. , $125 Albany $183 Marin County ',i3h,j,' . 1$190 Contra Costa County .t,.,. 1$195 Oakland $199 Pleasanton ,,~, $200 Clayton (Ii};.'. , $230 Pittsburg .;., . $250 Orinda $250 Moraga $250 Lafayette $250 Brentwood $250 Berkeley 'e"ii. jfW/iF' $261 Newark " $267 Livermore "p:~" ,,' . ,,,,,'., $280 San Ramon $285 t Martinez I I $303: i San Rafael ; ! $386 Ala~eda County '1 I $458 Pinole J I $550 Sausalito [ I $552 CO""'''' j ! $600 Oakley , i $650 Corte Made", ; , '$660 Emeryville , j $674 i Ri:~:~: j ,,',., :'," ",. '~~6:~~5 ,~" Dublin Novato Fairfax Larkspur Danville Fremont Hercules Hayward Piedmont Union City EI Cerrito San Leandro City of Alameda ,. $7fO i ! , I I $763 i ! i I ! ~776 ; .. I .' $813 i I I I I , $850 , I I $850 I , , . ! f .,. $894 I I i I $1,000 ! I I I : i I $1,003 I I , , $1,074 I i $1,08€l , , ! I I $1,100 I I $1,458 ! $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1.600 3ol)~ iii $0-300 D$301-fro 0$501-700 [JjJ $701-900 1$901+ .for:l~ Chair Water, Parks and Wildlife Committees Budget Natural Resources Local Government Subcommittees Budget Subcommittee on Transportation and Information Technology Select Committees Biotechnology Domestic Violence Children's School Readiness and Health Growth and Infrastructure Ports Rural Economic Development Water, Infrastructure and the Economy Wine Boards Put;llic Ubrary Construction and Renovation Wildlife Conservation State Capitol P.O. Btix942849 Sacramento, CA 94?49'0008 (916) 319.2008 Fax (916) 319.2106 District Office 555 Mason Street, Suite 275 Vacaville, CA 95688 (707) 455-8025 Fax (707) 455.0490 E-mail assemblymember.wolk@assembly.ca.gov Websile www.assembly.ca.govtwolk ~zs~nthll! QIalifnrnht tu~gislafur~ LOIS WaLK ASSEMBLYMEMBER, EIGHTH DISTRICT June 7, 2006 TO: All California City Attorneys and City Planners All County Counsels and County Planners FR: Assembly Member Lois Wolk RE: Solar Energy System Permit Fees - Legislative Intent Dear Friends, As you may know, I have had the honor ofrefining and expanding the California Solar Rights Act as the author of Assembly Bill 1407 (Chapter 290, Statutes of2003) and AB 2473 (Chapter 789, Statutes of2004). During the last year I have received many calls from solar contractors and local government staff regarding the intent of this legislation. I thought it might be helpful to spell things out in more practical terms for everyone's benefit. Thus, this memorandum. My intent in authoring this legislation was to establish a consistent set of standards for the review and approval of solar energy systems and to eliminate unreasonable barriers to the installation of solar energy systems, including, but not limited to, design review for aesthetic purposes. In addition, AB 2473 expressly declares the Legislature's intent that costs of permitting solar energy systems be minimized. It has come to my attention that a number of quite different approaches have been taken in the design-review of solar energy systems and in the process of establishing the costs of issuing a permit for the installation of a solar energy system. Some of these approaches appear to be inconsistent with the intent of my legislation amending the California Solar Rights Act. The purpose of this letter is to clarify the Legislature's intent with respect to design review for aesthetic purposes and the assessment of fees for the permitting of solar energy systems. Design-Review For Aesthetic Purposes May Not Restrict Installation of Solar Systems Under the provisions of AB 2473, permitting of all types of solar systems Hshall not be willfully avoided or delayed." AB 2473 requires a city or county to permit the installation of a solar energy system by right if the system meets specified requirements. Among other things, l11Y intent in enacting AB 2473 was to establish the principle that any application of a design review process for aesthetic purposes that effectively prohibits or restricts the installation or use of a solar energy system is void ana unenforceable. AB 2473 expressly provides that a local agency may not deny an application for a use permit to install a solar energy system unless the local agency finds a specific, adverse impact on public health and safety. .......::".-:::...:.. -~. Printed on Recycled Paper Attachment 2 ........... ~&f;;(8 AB 2473 amended California Civil Code Section 714(d)(1) so as to specifically limit restrictions imposed on photovoltaic systems to those that cost less than $2,000, and prohibit any restrictions that are based on aesthetics alone. In. addition, AB 2473 recast Section 65850.5 ofthe Government Code and Section 17959.1 of the Health and Safety Code to limit a building official's review of installations to those items that relate to specific health and safety requirements oflocal, state and federal law. These Sections of California law apply to current and future permitting, design/review, and approval processes, and also to review of existing permit applications. Permit Fees Must Be Reasonable As I am sure you are aware, California Government Code section 66005 (a), provides that "[development permit]fees or exactions shall not exceed the estimated reasonable cost of providing the service..." On December 22,2005 the California State Supreme Court upheld this statute by ruling that building permit fees must be based on the "estimated reasonable costs of providing the services for which thefees are charged" (Barratt v. C. of Rancho Cucamonga, Ct.App. 4/2 E032578). I have been advised by industry experts that the average time spent by local jurisdictions to permit and inspect a solar system is between 2 and 5 hours. A fixed fee method to compute solar permit fees has been shown to be an appropriate method of establishing solar permit fees, since it takes about the sam~ amount of time to permit a 2 kilowatt photovoltaic system, a 6 kilowatt system, or a residential or commercial solar water heating system. A permit fee computation methodology that is based on the monetary valuation of the system or its sales price, rather than the estimated reasonable costs of providing the permit service is inconsistent with the intent of AB 2473 as well as the Supreme Court case cited above and may unnecessarily discourage the installation of solar energy systems. On December 12,2005 the California Public Utilities Commission approved the California Solar Initiative, reflecting the will of the Governor and the Legislature to establish the largest publicly supported solar energy program in the world. One purpose of this letter is to ask local governments to consider their role in achieving this major state goal by looking carefully at how you assess fees for the permitting of solar energy installations and, in so doing, encourage the utilization of solar technologies by minimizing the obstacles to their use. I respectfully request that all local permitting agencies enact reasonable permitting policies that encourage affordable solar energy system installations (including over-the-counter permits, permit fees based on the permitting agency's actual costs, and cessation of design reviews for aesthetic concerns). Sincerely, ~ . olk blywoman, 8th District Attached: AB 1407 (Chapter 290, Statutes of2003), AB 2473 (Chapter 789, Statutes of 2004) ~t/ff)~ Sierra Club-San Francisco Bay Chapter Published 7/17/2006 SIERRA CLUB FOONIJEO 1391 SOLAR ELECTRIC PERMIT FEES IN THE NORTH/EAST S.F. BAY AREA A COMPARATIVE STUDY By Carl Mills @copyright 7/17/2006 1 Executive Summary Federal and state incentives, such as the California Solar Initiative, and net metering laws in California take much credit for making photovoltaic (PV) energy systems (solar panels) more affordable to middle-income homeowners. But few realize permit fees at the local level also make a difference. All cities charge PV installers a permit fee. The fee covers services that cities perform to ensure installations meet engineering and safety standards. Solar contractors bill homeowners for this fee as part of the installation cost. Cities whose inspectors are most knowledgeable about PV systems usualll cover their permitting expenses with a fee of $300 or less for standard, average- sized systems. Unfortunately, most cities are not so familiar with PV, and charge far more. This study compares the progress of 48 cities in Alameda, Contra Costa, Marin, and San Francisco counties in making PV permit fees affordable. The goal is to persuade local governments with high fees to follow the example that our region's most solar-friendly cities have set. 2 Study Parameters . Counties surveyed: Alameda, Contra Costa, Marin, San Francisco Customers: Residential single family homeowners (business installations are NOT included) Survey period: Spring-Summer 2006 (Note that the data in this document are continuously updated to reflect changes and corrections to the fees that the jurisdictions originally reported. ) PV system design: Some cities charge higher fees for installations that require more time and resources from the permitting authority. This study assumes the following specifications to equalize the comparisons across jurisdictions: . . . . A "standard, average-sized system" here denotes the PV system described in the Study Parameters section. Solar Electric Permit Fees in the North/East S.F. Bay Area Page 1 of 16 Attachment 3 7(}f2rt Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter · A licensed solar contractor installs the system. · The contractor mounts the system flush to the roof using industry-standard mounting techniques. · The contractor installs the system on a composite-shingle roof with one layer of roofing and a PV system roof load of 3 pounds per square foot. · The system has a valuation, before the California Energy Commission (CEC) rebate*, of $27,000. · The system is 3kW (peak AC rating) in output size and covers 320 square feet. · Survey question: "What is the total cost for a permit to install a 3kW solar electric system on a composite shingle roof of a single story residence in your jurisdiction (assuming the system cost is $27,000 before the California Energy Commission rebate and $18,600 after the rebate)?" Note: the system will be professionally installed, 320 square feet in size, and mounted flush to the roofwith a weight load of3 pounds per square foot. 3 Findings Summary 3.1 Permit Fee Variation As of July 9, 2006, the permit fees varied from $3 to $1,458, or 0.02% to 7.8% of the total post-rebate cost ($18,600) in the 48 surveyed jurisdictions. The average permit fee was $475, or 2.6% of the average total post-rebate cost. Twenty-four jurisdictions had fees under $300 and six had fees $1000 or more. 3.2 Permit Fee Ceiling After surveying various city permit processes and costs, we recommend $300 as a reasonable maximum for solar permit fees. This amount would cover most or all of the services a city must perform to ensure a PV installation meets engineering and safety standards, as normally is takes between 2 to 5 hours to permit and inspect a residential PV system. The following sections describe the context of our recommendation. . The California Energy Commission (CEC) offers cash rebates on grid-connected renewable energy electric-generating systems through its Emerging Renewables Program. Page 2 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area 1{)/~<t Sierra Club-San Francisco Bay Chapter Published 7/17/2006 4 Background California gets more sunshine hours than any state besides Arizona.1 As such, PV systems here have tremendous potential for harnessing this inexhaustible energy source. Conversely, we have much to lose by ignoring solar power, due to our state's soaring demand for energy, rising fossil fuel prices, and dependence on offshore energy imports. The following subsections explain the factors that contribute to these trends. 4.1 Economic Growth The products in which Silicon Valley specializes are energy intense. Internet traffic, computers, and computer-related products have huge electric appetites. As Silicon Valley's economy grows, so will its output of such products and their demand for electricity. The following chart shows the correlation between California's economic growth and electricity consumption over a 40-year period.2 Obviously, our economy cannot continue evolving unless we increase electricity production commensurably. California Electricity Consumption from 1960-2000 300000 50000 ReC9SlliOOs sOOv.'ll as sl1aded 250000 .20000{1 150000 100000 o 19601962 1964 1006 19$8 1970 1972 1974 19761978 1900 1982 1984 1986 1968 l!l9O 19921994 1900 1998 2000 4.2 Population Growth As our population grows, so does energy demand. California's population is expected to grow 51% between 2000 and 2040. The population for our surveyed counties is forecasted to grow 42% between 2000 and 2040.3 Solar Electric Permit Fees in the North/East S.F. Bay Area Page 3 of 16 t:Jot:ri Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter 4.3 Reliance on Imports The following chart shows how much California depends on energy imports.4 California Energy Sources (2005) IlI'llmportslllIln-StlItel Petroleum Electricity These imports are only as reliable as the states and countries that provide them. Those providers are subject to political, economic, and even climatic conditions that can interrupt our supply unpredictably. This also applies regionally. A CEC study indicates Silicon Valley produces only about 15 percent of its power, making it California's most energy-deficient area. A Silicon Valley Manufacturing Group study says the area might need more energy than it can import by 2010.5 The Group estimates that its nearly 200 members lost over $100 million dollars injust one day of rolling blackouts in June 2000.6 Our transmission system's inability to import enough electric power to the San Francisco Bay Area caused the first rolling blackouts that year. 7 Page 4 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area Sierra Club-San Francisco Bay Chapter I () of :2 r Published 7/17/2006 Locally, electric demand increased 6% from 2001 to 2005. The following chart shows this trend from 2001 (the year of California's last energy crisis) through 2005.8 Alameda, Contra Costa, Marin and San Francisco Counties: Annual Electricit Production, Consum tion and *Im orts -PowerPlantNetOutpLlt ... -Ci)nsumedbYCi)nsumel'$ -....lmpOr1~c1il1t(}Regh?n 300 I 25.8 25.0 I 27.4 (6% Increase) 20.0 5.0 .~. 16.4 (28% Decrease) :2 ! l!! ::l i! 15.0 =:: .. ~ E III I- 10.0 11.0 (358% Increase) 0.0 2001 2002 2003 Year 2004 2005 . The Imported Into Region data reflect imports from both in-state and out-of-state sources. Solar Electric Permit Fees in the North/East S.F. Bay Area Page 5 of 16 IltJf:<..~ Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter 4.4 Dirty Energy Of the electric energy that California generates for itself, only 11 % is from renewable sources (solar, geothermal, small hydroelectric, biomass and wind) as of 2005. As the following chart shows, 58% is from fossil fuels (coal and natural gas).9 California In-State Electricity Sources in 2005 Renewables 11% Natural Gas 38% As natural gas supplies dwindle, fossil fuels that create even more greenhouse gas pollution (e.g. coal) could fill the gap. Fossil fuels and nuclear energy have health consequences and risks beyond all economic considerations, both for individuals and our environment. Moreover, energy from all non-renewable sources becomes more expensive over time due to growing demand and finite supply. In contrast, costs for renewable energy technologies are dropping as supply and economies of scale are increasing. 4.5 The Solar Solution Solar electricity is a clean, reliable, and renewable solution that can alleviate much of our state's energy problems. Local sunlight and available roof space are plentiful, so only the number of installations can limit PV energy's potential. Moreover, PV virtually eliminates long-distance electric transmission losses (which are around 7%) because the individual home is both the source and destination of the energy. Best of all, once a PV system is installed, it generates energy for free, requires minimal maintenance, and can last 35 years or more. This makes PV a fantastic long-term financial investment for homeowners. Awareness of solar energy's advantages is growing. A Roper surveylO of 1,004 adults conducted in May 2006 showed: Page 6 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area 1;< ()f;lY Sierra Club-San Francisco Bay Chapter Published 7/17/2006 · 79 percent of Americans want homebuilders to offer solar power as an option for all new homes. · 84 percent of Americans ages 25-49 supported solar on new homes; 69 percent of those over 65 years agree. · After being told that solar homes have a proven higher resale value, 64 percent would be willing to pay more for home with a solar system! · 73 percent believe that solar energy technology is more important today than ever. · 42 percent say that saving money on monthly utility bills is the most compelling argument for installing solar power. Other respondents indicated it was to decrease the nation's dependence on oil (31 percent) or reduce environmental pollution (18 percent). In response to this popular momentum, some cities are installing PV systems on municipal buildings and reducing or eliminating PV permit fees. Other cities still charge fees that make the PV industry less competitive with polluting energy sources, especially imports. 5 A Typical Case History Marilyn Thomas of Mill Valley experienced her PV purchase as so many do: as an opportunity and a frustration. "My fIrst motivation was to save the planet and number two was... my [utility] bill would be less expensive," Thomas said of her reasons for going solar. Seven months after Cooperative Community Energy (CCE) installed her 3.3 kW system, she was more.than satisfied with its performance. "I've been paying about $5 dollars a month [for electricity]." However, she cited a long wait and high price as the primary hurdles. "Make it easier for people to get solar and. .. even subsidize it," Thomas advised governments. Fortunately, her city has heard and answered such pleas. Starting in 2006, Mill Valley reduced its permit fee for standard PV systems to a flat $3.29--one of the cheapest PV fees anywhere. And it now issues permits over-the-counter for systems that meet its design guidelines. "City CounciL.. has an interest in green building and encouraging alternative forms of energy," said Elise Semonian, Associate Planner for the City of Mill Valley. Over-the-counter permitting there means about 15 minutes for the permit application review. The post-installation inspection also takes about 15 minutes. "We hope that it [low fees and quick permitting] is encouraging people to install." Echoing Marilyn Thomas, Semonian attributed a rising interest in PV systems to rising energy costs. So did Chester Nakahara, an inspector at the City of Piedmont Building Department. "Over the last couple of years, there has been a defInite increase in interest." Like Mill Valley, Nakahara estimated that post-installation inspections take 15 minutes. Unlike Mill Valley, Piedmont takes about two weeks to process most solar applications. Unfortunately, time is money: solar customers pay $816 for a permit in Piedmont. The difference in fees might also reflect the cities' valuation methods. In contrast to Mill Valley's flat fee, Piedmont bases its PV permit fee on the value of the installation. However, Piedmont's fee is still far better than the $1,458 that the City of Alameda charges for the same system. Permit fees are one of many cumulative costs for a PV system that make potential customers think twice. Jason Jackson, President of Solaris Solar (a PV installation Solar Electric Permit Fees in the North/East S.F. Bay Area Page 7 of 16 / ?b f:z<i Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter company), expressed his customers' viewpoint: "I'm already spending all this money on solar, I'm trying to reduce my impact on the planet, I'm trying to help out the city arid myself and the environment, and I'm being penalized for it... Most people don't complain if it's under $500. When it's... over $1,000, there are customers who are appalled." Gary Gerber, President of Sunlight and Power (another PV installation company), described the opportunity and frustration that solar customers face. "People are [installing PV systems] for the pure, straight economics of it I still get comments like... I want to get away from PG&E. As long as energy [prices] keep going up, it's hitting people in the pocket-book." On the other hand, many customers wait weeks, or even months, before their city processes the solar permit "When people make the purchase decision, the mental clock starts," said .Gerber. "They don't want to keep waiting... They want their system tomorrow." Jackson of Solaris Solar said these frustrations are having an impact on the PV industry. "When you are depending on things going quickly and smoothly to make the finances work in a small [ solar] company, I think. it does hurt a lot of people." Jackson singled out San Ramon as having one of the worst permitting processes-an opinion other solar contractors share. It's worth noting that while a city might have a low up-front fee, permitting complications and delays can otherwise make solar installations more expensive or even impossible. "It's a full day for one person to deal with the permit office at very least," said Jackson. "It just translates into that much more money for the client to spend." By contrast, both Jackson and Gerber credit Berkeley and the County of Contra Costa for having excellent permitting processes. *- 6 Why Cities Require Solar Permits Cities require solar permits to ensure PV installations meet safety and engineering standards. All utilities require a signed-off building permit before officially authorizing a PV system's operation. The California Energy Commission requires the permit before a PV system owner can qualify for the rebate. Installing systems that generate electricity and connecting them to the transmission grid is potentially dangerous. The installations must be safe for homeowners, contractors, grid technicians, and firemen. They must also be safe for the transmission grid itself. Therefore, cities pay staff or outside consultants to inspect PV plans and installations to verify they meet code and safety standards. Poor installations can cause electrocution or fires, and are vulnerable to power surges during blackouts. A safe backflow of power into the grid is important both for the PV owner and for the community that relies on the grid. Local permitting authorities must verify the homeowner's roof has sufficient load-bearing capacity to support a PV system and that the PV system's rack and roof attachments meet site- specific wind load requirements. The system must also meet building and electrical code requirements. Page 8 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area Sierra Club-San Francisco Bay Chapter /4 f) f :lr Published 7/17/2006 7 Permit Fees: Comparison by City The following chart shows the permit fee that each surveyed city charges for a PV system with the specifications described in Section 2 . The fees are ranked from lowest to highest, with the average listed first. AVERAGE Mill Valley Tiburon Pleasant Hill Walnut Creek Belvedere San Anselmo San Francisco San Pablo Ross Albany Marin County Contra Costa County Oakland Pleasanton Clayton Pitts burg Orinda Moraga Lafayette Brentwood Berkeley Newark Livermore San Ramon Martinez San Rafael Alameda County Pinole Sausalito Concord Oakley Corte Madera Emeryville Antioch Richmond Dublin Novato Fairfax Larkspur Danville Fremont Hercules Hayward Piedmont Union City EI Cerrito San Leandro City of Alameda PV Permit Fees in the North/East S.F. Bay Area as of 07/13/2006 $475 $3 $35 $55 $65 $73 $80 $85 $93 $15 183 $190 $195 $199 $200 $230 $250 $:150 $250 $250 $250 $261 $261 $280 $285 $30 386 $458 $1,200 I I I I $1;458 I $1,400 $1,600 11$0-300 D$301-SOO 0$501-700 [1$701-000 1$901+ $75 o $ 63 776 $813 $850 $850 $894 $1.000 $1,003 $1,07 ,08 $1;10 $0 $200 $400 $600 $800 $1,000 Solar Electric Permit Fees in the North/East S.F. Bay Area Page 9 of 16 /5 ()( 2<1 Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter The following traits are typical of cities with permit fees under $300: · Progressive attitude in city council with regards to promoting renewable energy. For example, Mill Valley reduced its permit fee for the express purpose of encouraging alternative forms of energy. · Streamlined permitting process for PV installations. Municipalities like Novato issue solar permits over-the-counter without delays. · Staff trained to inspect PV systems. Inspectors in municipalities like Berkeley can check solar installations quickly and thoroughly because they have substantial experience with and knowledge of PV technology. Inspectors can acquire such expertise in solar workshops, which typically take from half a day to one full day (see Section 11.3 for more information). 8 Permit Fee Assessment Differences A city's fee assessment method, its required safety/engineering reviews, and the training of its inspectors have a critical impact on solar permit fees and processing times. 8.1 Fee Assessment Method Cities use either flat fees or valuation-based fees for solar permits. The flat-fee method applies the same fee regardless of system cost. The valuation method usually bases fees on the pre-rebate cost of a PV system: the more solar panels one purchases, the higher the fee. A consequence of the valuation method is that the more a homeowner contributes to a city's renewable energy supply, the more that homeowner must sacrifice fmancially. Compared to other home improvement projects, material costs for PV systems are high relative to installation costs. However, those material costs have little bearing on the resources a city must devote to review PV systems of different sizes. Though Piedmont bases its fees on the valuation method, Chester Nakahara, an inspector for the city, acknowledged that large residential systems typically do not take longer to review or inspect than small ones. Dan Martin, a Building Department official at Mill Valley, said a system with 24 panels would take no longer to inspect than a system with 6 panels. California law compels cities to exempt PV systems when assessing a home's value for property taxes. This makes PV more affordable as a home improvement project. Perhaps cities can apply the same rationale in computing solar permit fees. Traditionally, many building departments base permit fees for any project on its valuation. However, for the aforementioned reasons, this approach isn't fair when applied to PV systems. The state government has already passed legislation with the intent to limit the permit fees for solar. California Government Code section 66005(a), states: "[development permit] fees or exactions shall not exceed the estimated reasonable cost of providing the service. .." On December 22, 2005 the California State Supreme Court upheld this statute by ruling that building permit fees must be based on the "estimated reasonable costs of providing the services for which the fees are charged" (Barratt v. C. of Rancho Cucamonga, Ct.App. 4/2 E032578). For legal citations on recently enacted Solar Rights Act state legislation in California see information at the end of this report. Therefore, we recommend that all cities adopt the flat-fee method for assessing solar permit fees. This would reduce the average permit fee for all PV systems but would still cover the Page 10 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area /fo () f A'i Sierra Club-San Francisco Bay Chapter Published 7/17/2006 cities' review and inspection costs. It would also encourage homeowners to install larger systems that contribute IIlore t6 their communities' cleari,sustaimi.ble energy supplY. 8.2 Safety and Engineering Reviews Each city has its own set of engineering and safety reviews for solar permits. The expensive services tend to be pre-installation reviews of the PV system plan and installation site. Arguably, some such services are unnecessary. For example, the flush-mounted PV systems that most homeowners install have a low-enough weight/area ratio that they cannot overload standard roofs. "They're designed so that most roofs will hold them," said Dan Martin, a Building Department official at Mill Valley. Thus, extensive reviews of such PV systems for load-bearing criteria might be unnecessary. Cities with the most experience in processing solar permits tend to put less emphasis on such reviews and more emphasis on the post- installation inspection. Perhaps the biggest improvement municipalities can make to the review process is to standardize it. Gary Gerber, President of the solar contracting firm Sunlight and Power, said, "A good process would involve some sort of guidelines... preferably something that is done on a state-wide basis." It would also help if all municipalities used the same National Electric Code (NEe), instead of using versions published in different years. The guidelines that Brooks Engineering developed might be a good starting point for standardizing PV permit requirements: pttp://www.irecusa.org/articlesl static/ Ilbinaries/lnspectorGui de linesDraft9.pdf. Some commonly used review criteria are now illegal. The California Solar Rights Act was updated in 2005 to prohibit permitting authorities from restricting PV systems based on aesthetic considerations (i.e. the "look" of the system). California Government Code, Section 65850.5(a) states: "It is the intent of the Legislature that local agencies not adopt ordinances that create unreasonable barriers to the installation of solar energy systems, including, but not limited to, design review for aesthetic purposes... " For details on this issue, see the end of this study for the letter of intent about solar permit fees authored by Assembly Member Lois W olk that was emailed to all California Cities on June 7, 2006. It follows that cities now have less need for exhaustive plan checks as this applies to visual impacts. A less exhaustive plan check should be less expensive. Therefore, we recommend that cities requiring plan checks revise their permit fees downward to account for the new law. In sum, a streamlined permit process is also a cheaper process for cities and for solar customers. We recommend that all cities consider how to streamline their solar permit processes to reduce costs. For cities with less experience in processing solar permits, this might entail sending relevant staff to a half- or one-day solar workshop. These workshops would clarify what is and isn't necessary to evaluate PV systems. 8.3 Inspector Training Inspectors who review PV systems on-site after installation usually charge cities by the hour for their services. Cities pass on those charges to the solar installer, and ultimately to the customer. Therefore, a cheap inspector is a fast inspector. To be fast and thorough, an Solar Electric Permit Fees in the North/East S.F. Bay Area Page 11 of 16 /7otJ-f Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter inspector must be knowledgeable about PV systems. An inspector's PV -specific expertise might be the most critical factor controlliIigboth the permit cost and. safety of a solar installation. Solaris Solar president Jason Jackson said, "Most of the permit offices are seeing enough [PV applications] that their education level as to what they're asking for has increased." Nevertheless, he added, "Every day we run into inspectors who have no idea what they're looking at." By contrast, Jackson praised Berkeley's inspectors as particularly sharp. "They know exactly what they're looking at." V arious organizations sponsor workshops for solar inspectors, including solar contractors/manufacturers, building departments, and the International Association of Electrical Inspectors (IAEI) (see Section 11.3 for more information). 8.4 Permit Process Delays Customers expect prompt installation when they purchase PV systems. Many people buy them in spring and summer in hopes of activating the systems in time for the year's peak sunshine hours. PV systems activated during these seasons generate proportionately more electricity during peak electric demand times. When the electric meter spins backwards on summer afternoons, money is credited to the PV owner's bill at twice the rate of night-time usage in PG&E service territory.. Thus, customers have a financial incentive to capture peak summer sunlight. Removing. bureaucratic hurdles would encourage timely PV installations that coincide with peak summer electric demand periods, and thereby increase customers' satisfaction with the installation process. Many cities understand this financial impact of permit process delays. Mill Valley, Novato and the counties of Alameda and Contra Costa all issue solar permits over-the-counter without delays. Unfortunately, some cities require such lengthy review times that a customer who buys PV in the summer can miss that season entirely before the system is permitted, installed, and activated. Worse, a really complicated permitting process can make some solar projects impossible. Solaris Solar president Jason Jackson said of one installation that San Ramon "didn't want to see this happen at all and just put so many ridiculous restrictions in the way in hopes that we would just give up." Often high permit fees and slow permitting processes go hand-in-hand. Sunlight and Power president Gary Gerber said, "We've had a few disgruntled customers for whom the permit process was a problem. Mostly it's the people who end up paying a very high permit fee." 8.5 Permit Fee Ceiling After studying and comparing solar permit processes in different cities, we have determined that ordinary rooftop PV installations need the following reviews to ensure they meet safety and engineering standards: . PG&E's Net Energy Metering Program lets owners ofPV systems connect to PG&E's grid and earn credit for extra power generated during the day. Page 12 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area /g tJf ~t Sierra Club-San Francisco Bay Chapter Published 7/17/2006 · Solar application processing-Permit department staff who have received basic instruction in solar technology can usually review a standard, residential PV system application in minutes to ensure the plan complies with standard requirements. Cities like Novato have over-the-counter permit options for such PV systems. · Post-installation system inspection-A trained inspector in Mill Valley can usually inspect a standard, residential PV system in 30 minutes or less. After reviewing what the cities with the most experience in processing solar permits spend on these services, we recommend $300 as a reasonable ceiling for permit fees. 9 Recommendations We recommend that all cities reduce their solar permit fees to $300 or less for residential PV systems that are flush-mounted to rooftops, since permitting and inspecting a residential PV system should take permitting authorities between 2 to 5 hours. This amount is typical of the cities with the most PV experience and streamlined processes in our region. We recommend the following measures for cities that currently charge over $300: · Use the flat-fee method instead of the valuation-based method to assess permit fees. It takes about the same amount of time to permit a small or large residential PV system. Thus, the flat-fee method enables the city to recover its costs and be fair to the solar customer too. · Streamline permit processes to reduce costs and delays. Half- to one-day solar workshops for relevant staff can make a critical difference in process expenses. Various organizations sponsor these workshops, including solar contractors/manufacturers, building departments, and the International Association of Electrical Inspectors (lABI) (see Section 11.3 for more information). · Revise permit fees downward to account. for the new California Solar Rights Act, which requires minimal permit fees for solar energy systems and makes prohibitions based on aesthetic concerns illegaL This applies to cities that currently require plan checks with aesthetic criteria. See the end of this study for the letter of intent from Assembly Member Lois Wolk that was sent to all California cities and counties on June 7, 2006. We recommend the following measures for all cities regardless of their current permit fees and processes. · Standardize permit requirements among California's municipalities. This would erase numerous bureaucratic hassles for permitting departments and the PV industry, as it would make it easier for the latter to comply with the former's expectations. · Show permit fees and requirements on the city website to facilitate the application process for solar contractors and for customers who install their own systems. · Consider fast-tracking applications for solar contractors who have reliable track records for PV installations. Delays can discourage customers, as well as undermine the ability of solar contractors to compete with non-renewable energy providers. Solar Electric Permit Fees in the North/East S.F. Bay Area Page 13 of 16 /':; pf ~ r Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter 10 Conclusion Currently, Silicon Valley has a massive and growing need for clean, renewable, locally produced energy. Solar electricity is an obvious and fast-growing solution. Federal and state governments recognize this and have passed legislation to encourage the trend. Cities can contribute too, and several have. After we published a similar study on PV permit fees for the permitting authorities in San Benito, San Mateo, and Santa Clara counties, 14 of the 42 surveyed towns found ways to reduce their fees. Over an 8-month period, the average fee in those counties fell 40 percent from $652 to $390! PV permit fees and processing delays can make a critical difference to some buyers. Much of the costs and delays involved in processing permits reflect misunderstandings about PV systems rather than the realities of installing and inspecting them. Cities can reduce costs and delays for themselves, solar contractors and PV customers by streamlining processes, using a flat-fee permit valuation method, training permit department staff, and standardizing permit requirements. A permit fee of$300 is a reasonable amount to cover the reviews and inspections a city performs to ensure a standard, flush-mounted, residential PV system meets safety and engineering standards. Reducing fees to this level or lower would persuade more buyers to invest in solar electric technologies. We ask that all cities consider the recommendations in this study to encourage an energy trend that contributes so much to the health and energy security of our communities. 11 References 11.1 Contacts Feel free to contact the creators of this study for more information: · Richard Hughes, Email: rlhughes(cV.kmahyoyo.com. Phone: 510-396-1207 · Carl Mills, Email: 9_~I).mil1s@e3Jthlink....Jlet. Phone: 408-586-8761 · Kurt Newick, Email: KurtNewickCa!.yahoo-.com. Phone: 408-370-9636 · Tom Roberts, Email: tc.rob...~.rtif"8Lrnindspril~01T!, Phone: 415-203-2781 11.2 Study Download You can download this study as a PDF from: http://lomaprieta.sierraclub.org/global warnling/articles/pv permit study NE Bay.pdf 11.3 More Information About... . Workshops for reviewing and inspecting PV systems o International Association of Electrical Inspectors (lABI), Northern California Chapter http://www.iaei.org! Dave Roybal 2637 Collier Canyon Road Livermore, CA 94551 Phone 925-454-3754 Page 14 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area tlOo(:l<! Sierra Club-San Francisco Bay Chapter Published 7/17/2006 Fax (925) 454-3755 ErnailDavidD Royba.l@eaton.cQ.ill. o Southwest Technology Development Institute (STDI), New Mexico State University ]:lttp://www.NMSU.Edu/-tdi John C. Wiles, Program Manager 3705 Research Drive Box 30001lMSC 3 SOLAR Las Cruces, NM 88003-8001 Phone 505-646-6105 Fax 505-646-3841 · Guidelines for reviewing and inspecting PV systems: h~112;.L!.~WF-. irycuB.~"9.Lgf~.u;ti~1~~t.~t.w/ 1/bim!J:i~B/lllm~ctor:Q1!idelirL~'i12@ft9.J?Q.f · How the National Electric Code (NEC) applies to reviewing and inspecting PV systems o "PV Power Systems and the National Electrical Code: Suggested Practices" http://www .nmsu.edu/~tdi/roswell-80pt. pdf o "Permitting or Inspecting a PV System?" http://www .nmsu.edu/~tdi/pdf-resources/IAEI-5t06-05. pdf o "Photovoltaic Power Systems: What Inspectors Should Know" 1ill.P-:/lwww.nmsu.edu/-tdiJppf-resources/IAEI-3t04-04.J2.M · A checklist for PV installations, based on the general requirements found in the 2005 National Electric Code (NEe), Article 690: http://www.nmsu.edu/~tdi/pdf-resources/INSPECTOR CHECKLIST 5-05 %201.pdf · PV system design and installation http://www.energy.ca. gov /reports/200 1-09-04 500-01-020 .PDF (California Energy Commission: A Guide to PV System Design and Installation) · Solar technology, organizations, resource links, news, etc. l:1!!:P-://www.norcalsolar.org (web site of the Northern California Solar Energy Association) · California solar access laws as of 2005 http://www.gosolarnow.comiimages/pdfUIo20files/CASolar AccessLaws.pdf · California's Emerging Renewables Program http://www . consumerenergycenter.org/ erprebate/ · Electric power data for California http://www.energy.ca.gov (California Energy Commission; contact: Andrea Gough (email: agougMuenergy.state.ca.us; phone: 916-654-4928) 11.4 Revision History · Initial publication: 07/17/2006 11.5 Endnotes 1 USA Today Cb!1n:!!\y"'\!'W.usatQ4t\y-.com!~il.th~r!news/2004-06-21-tl?~llnshine x.htm) referring to National Weather Solar Electric Permit Fees in the North/East S.F. Bay Area Page 15 of 16 ,( / 0 f' ,zgJ Published 7/17/2006 Sierra Club-San Francisco Bay Area Chapter Service data 2 CEC 2002 - 2012 Electricity Outlook Report (httn;! !ener~')' .ca.gov!reports!2002-06-1O 700-01 -004F exe.htm I) 3 California Department of Finance (httn:! !www.dof-ca.gov!HTMLlDEMOGRAP;DRU Publ ications!Proiections!P- 1 Tables.xIs) 4 California Energy Commission (CEC), 2005 data (http://www.energy.ca.gov!html/energysources.html) 5 Silicon Valley Manufacturing Group (http://www.biziournals.com!saniose/stories/2004/06/l4!storv6.html?page"" 1) 6 White House National Energy Policy website (http://www.whitehouse.gov/energy!Chapter2.pdf) 7 Sil~con Valley Power (http://www.crnua.org/5 05news svp.pdt) 8 California Energy Commission (CEC) CEC-1304 and CEC-1306 database (h.1JnJjwww.energy.ca.govi) 9 Califomia Energy Commission (CEC), 2005 data (http://energy.ca.goy!electricity/gross system power.html) 10 Realty Times (http://realtvtimes.com/rtcpages/20060622solaremergency.htm) Page 16 of 16 Solar Electric Permit Fees in the North/East S.F. Bay Area d;} tJ r .2i Chair Water, Parks and Wildlife Committees Budget Natural Resources Local Government Subcommittees Budget Subcommittee on Transportation and Information Technology Select Committees Biotechnology Domestic Violence Children's School Readiness and Health Growth and Infrastructure Ports Rural Economic Development Water, Infrastructure and the Economy Wine Boards Public Library Construction and Renovation Wildlife Conservation Stste Capitol P.O. Box 942849 Sacramento, CA 94249-0008 (916) 319.2008 Fax (916) 319.2108 District Office 555 Mason Street, Suite 275 Vacaville, CA 95688 (707) 455.8025 Fax (707) 455.0490 E-mail assemblymember.wolk@assembly.ca.gov Websile www.assembly.ca.govlwolk ~semhll! QIalifnrnhl ~~gislafure LOIS WOLK ASSEMBLYMEMBER, EIGHTH DISTRICT June 7, 2006 TO: All California City Attorneys and City Planners All County Counsels and County Planners FR: Assembly Member Lois Wolk RE: Solar Energy System Permit Fees - Legislative Intent Dear Friends, As you may know, I have had the honor of refining and expanding the California Solar Rights Act as the author of Assembly Bil11407 (Chapter 290, Statutes of2003) and AB 2473 (Chapter 789, Statutes of2004). During the last year I have received many calls from solar contractors and local government staff regarding the intent of this legislation. I thought it might be helpful to spell things out in more practical terms for everyone's benefit. Thus, this memorandum. My intent in authoring this legislation was to establish a consistent set of standards for the review and approval of solar energy systems and to eliminate unreasonable barriers to the installation of solar energy systems, including, but not limited to, design review for aesthetic purposes. In addition, AB 2473 expressly declares the Legislature's intent that costs of permitting solar energy systems be minimized. It has come to my attention that a number of quite different approaches have been taken in the design-review of solar energy systems and in the process of establishing the costs of issuing a permit for the installation of a solar energy system. Some of these approaches appear to be inconsistent with the intent of my legislation amending the California Solar Rights Act. The purpose of this letter is to clarify the Legislature's intent with respect to design review for aesthetic purposes and the assessment of fees for the permitting of solar energy systems. Design-Review For Aesthetic Purposes May Not Restrict Installation of Solar Systems Under the provisions of AB 2473, permitting of all types of solar systems "shall not be willfully avoided or delayed." AB 2473 requires a city or county to permit the installation of a solar energy system by right if the system meets specified requirements. Among other things, my intent in enacting AB 2473 was to establish the principle that any application of a design review process for aesthetic purposes that effectively prohibits or restricts the installation or use of a solar energy system is void and unenforceable. AB 2473 expressly provides that a local agency may not deny an application for a use permit to install a solar energy system unless the local agency finds a specific, adverse impact on public health and safety. .;.............. ..,.~O-:-- Printed on Recycled Paper ;z 30 f.;zg AB 2473 amended California Civil Code Section 714(d)(1) so as to specifically limit restrictions imposed on photovoltaic systems to those that cost less than $2,000, and prohibit any restrictions that are based on aesthetics alone. In addition, AB 2473 recast Section 65850.5 of the Government Code and Section 17959.1 of the Health and Safety Code to limit a building official's review of installations to those items that relate to specific health and safety requirements oflocal, state and federal law. These Sections of California law apply to current and future permitting, design/review, and approval processes, and also to review of existing permit applications. Permit Fees Must Be Reasonable As I am sure you are aware, California Government Code section 66005 (a), provides that "[development permit] fees or exactions shall not exceed the estimated reasonable cost of providing the service..." On December 22,2005 the California State Supreme Court upheld this statute by ruling that building permit fees must be based on the "estimated reasonable costs of providing the services for which thefees are charged" (Barratt v. C. of Rancho Cucamonga, Ct.App. 4/2 E032578). I have been advised by industry experts that the average time spent by local jurisdictions to permit and inspect a solar system is between 2 and 5 hours. A fixed fee method to compute solar permit fees has been shown to be an appropriate method of establishing solar permit fees, since it takes about the same amount of time to permit a 2 kilowatt photovoltaic system, a 6 kilowatt system, or a residential or commercial solar water heating system. A permit fee computation methodology that is based on the monetary valuation of the system or its sales price, rather than the estimated reasonable costs of providing the permit service is inconsistent with the intent of AB 2473 as well as the Supreme Court case cited above and may unnecessarily discourage the installation of solar energy systems. On December 12,2005 the California Public Utilities Commission approved the California Solar Initiative, reflecting the will of the Governor and the Legislature to establish the largest publicly supported solar energy program in the world. One purpose of this letter is to ask local governments to consider their role in achieving this major state goal by looking carefully at how you assess fees for the permitting of solar energy installations and, in so doing, encourage the utilization of solar technologies by minimizing the obstacles to their use. I respectfully request that all local permitting agencies enact reasonable permitting policies that encourage affordable solar energy system installations (including over-the-counter permits, permit fees based on the permitting agency's actual costs, and cessation of design reviews for aesthetic concerns). Sincerely, ~ olk blywoman, 8th District Attached: AB 1407 (Chapter 290, Statutes of2003), AB 2473 (Chapter 789, Statutes of2004) AsseIIlbly DOl No. 1401 CHAPTER 290 performance. or that allow for an alternative system eX comparable cost. efficiency. and energy conservation benefits. (c) (1) A solar energy system shall meet applicable standards and requirements imposed by stale and local pennitting authorities. (2) A solar energy system for heating Wa!er shall be certified by the Solar Rating Cemfication Corporation (SRCC) or other nationally ~z.ed certification agencies. SRCC is a nonprofit third party supported by the United States Depanment eX Energy. The certification shall be for the entire solar energy system and installation. (3) A solar energy system for producing declricity shall also meet all applicable safety and perfonnance standards established by the National Electrical Code. the Institute of Electrical and Bcctronics Engineers. and accmdlted testing laboratories such as Underwriters Laboratories and. where applicable. rules of the Public Utilities Commission re.anting safety and reliability. (d) For the purposes of Ibis section: (1) "Significandy" means an amount exceeding 20 perc:cnt of the cost d the system or decreasin. the efficiency eX the solar eoergy system by an amount exceeding 20 percent. as originally specified and proposed. (2) "Solar energy system" bas the same meaning as defined in Section 80 1.5. (e) Whenever approval is requin:d for the installation or use d a solar energy system. the application for approval shall be processed and approved by the appropriar.e approving entity in the same manner as an application far approval d an arcbltectural modification to the property. and shall not be willfully avoided or delayed. (I) Any entity, other than a public entity. that willfully violates this section sball be liable to the applicant or other party (or actual darnqes oa:asioned thereby, and shall pay a civil penalty to the applicant or other party in an amount not to exceed one thousand dollars ($1.000). (g) In any action to enforce complianc:e with this section. the prevailin, party shall be awarded reasonable attomey"s fees. (h) (1) A public entity that fails to comply with this section may not receive funds from a SWC-sponsored grant or loan program for solar energy. A public entity shall m1ify its oompliance with the requiranents of this section when applying for fwads from such a grant or loan program. (2) A local public entity may not exempt residents in its jwisdiction from the requirements of Ibis section. An act CO amend Section 714 of the Civil Code. relatios to solar energy. (Approved by Governor SeplcmbeT 3. 2003. Hied with Scc:mary c( SIaIc SepeembeT 4. 2003.] L.EGISJAI1VE COUNSEL'S DIGEST AB 1407. Walk. Solar energy systems. Existing law provides that any covenant. restriction, or condition contained in any deed. conlract. security instrument. or other instrwnenl affecting real property. as specified. that prohibits or restricts the installation or use d a solar CDeIJY system is void and unenforceable. Existing law requires that solar collectors meet the Sbu1dards and requirements imposed by slate and local pennitting authorities. as specified. This bill would specify that a public entity may not receive fimds from a statc~sponsored grant or loan program for solar energy if it fails to comply with these requirements and would require a pobIic entity to certify that it is meetin, these requimnentS when applying for these grants or loans. This bill would prohibit a local public entity from excepting residents in its jurisdiction from these requirements. The bill would also establish the penicular standards lbat solar enersY systems for beating water and producin8 electricity must meet. and would make a clarifying change. TM people of the SlaIe of California do enacl as joIlows: SECTION I. Section 714 of the Civil Code is amended to n:ad: 714. (a) Any covenant, resaiction. or condition contained in any deed. contract. security instrument. or other instrument affecting the b'anSfer or sale of. or any interest in. real property that effectively prohibits or restricts the installation or use of a solar energy system is void and uoenfon:eablc. (b) This section does not apply to provisions that impose reasonable resttictions on solar energy systems. However. it is the policy eX the sIBtc to promote and encourage the use eX solar energy systems and to remove obstacles thereto. Acx:ordingly. reasonable restrictions 00 a solar energy system are those restrictions that do not significantly increase the cost of the system or significantly dc:c:tase its efficiency or specified ~ -...t ~ ~ ~ 0<:;( AsIiIentbJy BIll No. Z473 CHAPTER 789 An act to amend Section 714 of the Civil Code, to repeal and add Section 6S8SO.5 of the Govanment Code, and to repeal and add Sc:ction 17959.1 of the Health and Safety Code, relating to solar energy. (Approved by Oovemor SeptaDber 24. 200l RIed with Sccmaty d State Sepember 15. 2:004.) U3GISumvE COUNSB.:S DIGEST AD 2473, WoIk. EnerJY systems: local regulations. (1) Existil1llaw provides that any covenant. restrictioo, or conditioo contained in any deed. contract. security instrument, or od1cr instrument affecting property. as specifaed. that probibits or restricts the installation or use of a solar energy system is void and unenforceable. Existing law permits reasonable restrictions on a solar energy system that do not "significantly." as defined, increase the cost of the system or decrease its efficiency or specified performance. This bill would redef'mc the term "significantly" with reprd to the restrictions imposed on solar domestic water heating systems or swimming pool Jleating systems and pboIovoltaic systems. as specified. (2) Existing law prohibits the legislative body of any city or county from enactin8 an ordinanee that prohibits or unreasonably restricts the use of solar energy systems other than for the praervation or protection of the public health and safety. This bill would revise and RUSt those provisions to require every city, county. or city and county to approve the installation of a solar energy system, as defined, through the issuance of specified permits. The bill would declare tbal the implementation of ronsistent statewide standards to achieve' the timely and cost-effective installation of solar energy systems is a matter of statewide concern. The bill would require solar energy systems to meet specified standards. The bin would also I'fquire the issuance of a use permit by a city or county to install a solar energy. system unless it makes specified written findings based upon substantial evidence in the record that the proposed installation would have a specific. adverse impact. upon the public health or safety. The bill would provide for appeal of that decisioo to the planning commission, as specified. The bill would fmther make specified findings and declarations in that regant. Because the bill would impose additional duties on local employees. the bill would create a state-mandated local program. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursemeDt. This bill would provide that DO reimbursement is required by this act for a specified reason. The people of the Stllte of CaJiftJrnia do enact as follows: SECTION l. (a) The Legislature finds and declares all u the following: (1) According to the State Energy Resources Conservation and Development Commission. California could face a shortage of reliable electricity and natural gas supplies within the next few years. (2) The State of California bas a longstaodinl policy of eocoumcing the c:onstruction of clem, reoewabIe. and cistributed energy systems, as evidmced by its investment of $135 million in renewable electrical generatim resoun:es through the Reliable Bcctric Service Investments Act (Article IS (commencing with Section 399) of Cbapter 2.3 of Part 1 of Division 1 of the Public Utilities Code). and coactment into law of Section 25619 of the Public Resourtes Code. wbieb authorized funds for a solar water heating grant program in the 1999-2000 Regular Session. The state has set a statewide goal d increasing renewable generation soun:es so that 17 peroent of total electricity generation originates from renewable eoersY (Section 383.5 of the Public Utilities Code). (3) The 2003 EneIJY Aaioo Plan jointly prepnd and adopted by the State Energy Resoun::es Conservation and Development Commission and the California Public Utilities Commission strongly promotes customer owned electricity generation and renewable resources. Solar thermal enerJ)' technolopes that reduce the consumption of natural gas or electricity will play an inaasinpy prominent role in California's energy portfolio future. (4) The Legislature. the State &lersy Resources Conservation and Development Commission. and the California Public Utilities Commission rec:opize solar energy techno1opes as abundant. renewable, and nonpoIlutinl energy resoun:es that reduce California's dependence on nonrenewable enelJY while reducing air and water pollution resulting from fossil fueI-based SOl.IJU$. Solar enagy systems enhance the reliability and power quality of the electrical grid. reduce peak power demands. increase in-state electricity senenmOD, liberate natural gas supplies for electricity generation purposes. diversify the state's eneray supply portfolio. and make the electricity supply market more competitive by promoting consumer choice. ~ ~ ~ ~ ~ ~ (S) The installation and operation of solar enersY systems do not create advene impadS on health. safety, or noise in areas where Ihose systems are installed. In some jurisdictions, howevCl', overly onerous and burdensome rules, regulations. or OIdinances make lbe approval and installation ~ lIdar energy systems unec:onomic because ~ time-c:oasumina processes Ibat frequently mndt in the denial ~ project approval due solei)' to aesthetic oonc:ems. (6) In Upt ~ existins state policies that promote the utilization of mleWable encqy IeSOlIIa:s in Older to prevent future dectricity and natural ps sbortases, which have been enacted in order to protect the environment by encouraains the increased use of nonpolluting energy resources, it is the inteDl of the Legislature that local agencies do not adopt ordinances that cmItc UI1l'eI1SOMble beniers to lite installation of solar eDerIY systems. including. but not limited to, desip ~view for aesthetic purposes, and do not unreasooably restric:t the ability of homeowners. agricultural concerns. and business c:oncems to install solar CIlClJY systems. It is the policy of the state to promoIe and e.ncourase the use d solar energy systems and to limit obsIacIes to their use.. (b) The implementation of consistent statewide slandaJds to achieve the timely and cost effective installation of solar energy systems is not a municipal affair. as that tenn is used in Section 5 of Article XI of the California ConsIitution. but is instead a matter ~ statewide c:oncem. It is the iDtent of the Legislature that local governments comply not only with the Janpaae of this act. but also the lesislative intent to eDCOIII1ISC the installation d solar energy systems by removing obsIacles to. and minimizing costs d. pennitCing for such systems. SEC. 2. Sectioo 714 ~ the Civil Code is amended to n:ad: 714. (a) Any CiOVen&llt. restriction. or c::oodition COtlt8ined in any deed, contract. security iDSb'UD1el1t. or other instrument affectlng the transfer or sale of. or any interest in, real property that etJec:tivdy prohibits or restriClS the ins1allation or use of a solar energy system is void and unenfon:eabIc. (b) This section doea not: apply to provisions that impose reasonable reslridioos on solar CDer8Y systems. However, it is the policy fA the stale to promote and encourase tbe use of solar enaJY systems and to remove obsIacles therao. Acoon:Iingly.laSOI18bIe restriClions on a solar eneIIY system are those restricdons that do not: significantly increaIc the cost of the system or significantly deaease its efftc:iency or specified pcrfOllDllK1e. or tbat allow for an alternative sy8fan c:I. ClOIDp8I3bIe mst.. efficiency, and energy eonservaUoo benefits. (c) (I) A soIareDel1Y system shall meet applicable health and safety standards and ~rements imposed by stale and local permitting authorities. (2) A solar energy system for heatiog water shan be certified by the Solar Rating Certificalion Corporation (SRCC) or other nationally recognized c:a1if"acation aJCPCics. SRCC is a nonprUit tbiro party 8UpIUted by the Unill:d States Dep8J1ment of FaerJY. The ceItifiaWoo sball be for the entire solar eneray system and installation. (3) A solar eoeqy system for producinl dectrlcity shall also meet all applicable safety and perfOl'lDlDCC s1Bndards established by the NaIional ElectriaII Code. the Institute of Bedrical and EIec:tronics Engineers. and accredited testing laboratories sucb as Underwriters Laboratories and, where applicable. ndes of the Public Utilities Commission repldins safety and reliabiUty. (d) For the purpoees of this section: (1) (A) For solar domestic water beatiDS systems or solar swimming pool heating systems that comply with state and federal law, ..signifaamdy" means an amountexa:edins 2Open:ent fA the cost of the system or deaeasiD8 the efficiency of the solar energy system by an amount exceeding 20 percent. as originally specified and proposed. (B) For photovollaic systems that oomply with state and federa1law, "sipificantly" means an amount nd to exceed two thousand dollars ($2,000) over the system cost as originally specified and pqJOSed, or a deaase in system efficiency eX an amount exceeding 20 peroenl as originally specified and proposed. (2) "Solar eneray system" bas the same meaning as defined in parapapbs (1) and (2) of subdivision <a) of Section 801.5. (e) Whenever approval is I1lqUired for the ll1-UBIlation or use of a solar energy system, the application for approval sball be processed and approved by the appropriate approving atdty in the same manner as an appIicatioo for approval d an architectural modification to the property. and shall DOt be willfully avoided or delayed. (f) Any entity. other than a public entity. that willfully violates this section shall be liable 10 the applicant or other party for actual damages occasioned lbereby, and sball pay a civil penalty to the applicant or other party in an amount DOt to exceed one thousand dollars ($1.000). (g) In any action to enforce compliance with this sectioo, the prevailing party shall be awarded reasonable attorney's fees. (h) (I) A public entity that fails to comply with tbis section may DOt receive funds from a state-sponsored grant or 10lD program for solar eDCIJY. A public entity sbaU c:ertify its compliance with lbe IlJqUirements d this section when applying for funds from a state-sponsored grant or loan program. ~ ~ ~ ~ 'x.s ~ (2) A local public entity may not exempt residents in its jurisdiction from the requiRmlCDts of this section. SEC. 3. Section 6S8SO.S d the Government Code is repealed. SEC. 4. Section 6S8SO.S is added to the Government Code, to read: 6SSSO.S. (a) The implemc:ntation d consistent smrewide standards to achieve the timely and cost-effective installation of solar energy systems is not a municipal affair, as that tenn is used in Section 5 of Article XI of the California Constitution, but is instead a matter of statewide concern. It is the intent of the Legislature that local agencies not adopt ordioanoes that create unreasonable barriers to the installation d solar energy systems, including, but not limited to, design review for aesthetic purposes. and not wueasonably restrict the ability eX homeowners and agricultund and business concerns to install solar energy systems. It is the policy eX the state to promote and enoourage the use of solar energy systems and to limit obstacles to their Ulle. It is the intent of the Legislature that local agencies comply not only with the language of this section, but also the legislative intent to enc::owage the installation of solar energy systems by removing obstacles to. and minimizing costs of. permitting for such systems. (b) A city or county shall administrativdy approve applications to install solar energy systems through the issuance of a buildiq permit or similar nondiscretionary permit. Review of the application to install a solar energy system shall be limited to the buildinB official's review of whether it meets all bealth and safety requirements rllocaI, state, and federal law. The requirements cA local law shall be limited to those standards and regulations necessary to ensure that the solar energy system will DOt have a specific, adverse impact upon the public health or safety. However, if the building off"lCial of the city or county has a good faith belief that the solar energy system could bave a specific. adverse impact upon the public health and safety, the city or 00Wlty may require the applicant to apply for a use permit. . (e) A city or county may not deny an application for a use permit to install a solar enersY system unless it makes written fJOdings based upon substantial evidence in the record that the proposed installation would have a specific, adverse impact upon the public be8Ith cr safety, and there is no feasible method to satisfactorily mitigate or avoid the specific. adverse impact. The findings shall include the basis for the rejection eX potential feasible alternatives of preventing the adverse impact. (d) The decision of the building dficial pursuant to subdivisions (b) and (c) may be appealed to the planning commission of the city or county. (e) Any cooditions impoecd on an applicatioo to insIall a solar energy system shall be desiped to mitigate the specific, adverse impact upon the public health and safety at the lowest cost possible. (t) (1) A solar enttBY system shall meet applicable health and safety standards and requiJancntJ imposed by state aud local pennittiDB authorities. (2) A solar CIlCIJY system for beating water shall be certified by the Solar RatiDe Cer1iflClltion Corporation (SRCC) or odaer aatioaally recognized certification agency. SRCC is a nooprofit third party supponed by the United Stales Department of Energy. The certification shall be for the entire solar energy system and installation. (3) A solar energy syslel'D for producing electricity sball meet all appIic;:able safety and perfOl'JlllUl(le standards estah1i~ by the National Electrical Code, the Institute fA FJectrical and BedroDics F..n8ioeers, and acaedited testing laboratories such 88 Ua.dcrwriten LaboraIories and. where applicable, roles cA the Public Utilities Commission regarding safety and n:liability. (g) The following definitions apply to rbis section: (I) "A feasible method to taltisfactorily mitigate or avoid the spcdfic, adverse imp8ct" includes. but is DOt limited to, any cost-effective method, CIODditiOll, or mitigalion impaled by a city cr CCJUJUy on 8DllIber similarly situated application in a prior aucccssful application for a penniL A city 011 county shall use its best efforts to ensure thai the selected method, condition. or mitiption meets the conditions cA subparaJrapbs (A) and (8) eX JlIDII8Pl (1) ci subdivision (d) ci Section 714 of the evil Code. (2) "Solar energy system" bas the same meaning set forth in paragraphs (1) and (2) of subdivision (a) of Section 801.5 cA the Civil Code. (3) A "specific, advase implCl" means a significant. quantifiable, direct, and uoavoidablc impact, bued on objective, identified, and wrium public health or safety SIaPdards, policies, or oonditioos as they existed OIl the date the appliadion was deemed oompIete. SEC. s. Section 11959.1 rI the Health and Safety Code is repealed. SEC.6. Section 17959.1 is added to the Health and Safety Code, to read: 11959.1. (a> A city or county shall administr8lively appro'^' applicatioos to install solar enelJY systems though the issuance of a building permit or similar nondiscretiOG8l)' penniL However. if the building afticlaJ rI tbe city QI" COUDty bas a sood faith belief that the solar eDeI1)' system could have a specific, adverse implCt upon the public health and safety, the city or county may require the applicant to apply for a use permit ~ ""-J ~ '""'" ~ ~ (b) A city or county may not deny an application for a use pennit to install a solar coergy system unless it makes MilleD findinp baaed upon subsrantial evidence in the record that the proposed iDSfallation would have a specitk. advax imp&ct upon the public health or safety, and thece is no feasible method to satisfactorily mitigate or avoid the specific, adverse impac:c. This finding shall include the basis for the rejecdoo of potential feasible alternatives of prevenCioa the advene implCt. (e) Any conditions imposed on an appIiauion 10 insIaU a solar energy system must be designed to mitiptc the specific, adverse impact upon the public health and safety at the lowest cost possible. (d) (1) A solar CDCIJY system shall meet appIialIG bcalth and safety standards and requirements imposed by state and local permitting autborities. (2) A solar eDeIJY system for heating wat<< shall be cenified by the Solar Rating Cenification Corporation (SRCC) or odIer nationally recognized certiflaltioa agency. SRCC is a tlOIIprOfit third party supported by the United States Department fA Energy. The certification shall be for the entire solar enetJY system and installation. (3) A solar eDeI1Y systeni for produciog dcctricity slaaIl meet all applicable safety and perfOllJ18QQ: Ilt8ndards estabIisbed by the National Electric:al Code. the Institute of Electric:al and Elecuoaics Ensineers. and accredited tesUnglaboratories such as Underwriters Laboratories and, where applicable. roles of tbe Public Utilities Commission reprding safety and reliability. (e) The following definitions apply to this section: (I) "A feasible method to sadsfacforily mitigate or avoid the specific. adverso impact" includes. but is not limited to., any cost effective mctbod, oonditioo. or mitiption impo8ed by a city or alUDty OIl anodaa- similarly situated application in a prior successful application for a permiL A city or county sball use its best efforts to CDS~ that the selected method, condition. or mitigation meets the conditions c:I subparagrapbs (A) and (B) of Jl8I8II1lIlh ( I) of subdivision (d) of Secdoo 714 of the Civil Code. (2) "Solar energy system" has the meanina set forth in p8I8BI1lpba (I) and (2) of subdivision (a) of Sectioo 8Ol.S c:I the Civil Code. (3) A "specific. adverse impact" means a sipificant, quantifiable. direct. and unavoidable impact. baaed on cbjective. identified. and written public health or safety standards. policies, or c:ondidoos as they existed on the date the application was deemed complete. SEC. 7. No reimbursement is required by this act pursuant to Secdon 6 cA Article XIII B d the California ConsIitutioo because a 100iI agency or school district has the authority to levy service duqes. fees. or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code. >\.:, ~ ~ ~ ~ ~