The Sierra Club study of commercial solar PV system permit fees by Kurt Newick cited in “Fees for business solar power units vary widely” (Mike Taugher, Contra Costa Times 2/27/2011) is both misleading and misplaced, and it unfairly and inappropriately targets Richmond as having the highest permit fee in Contra Costa County.
If the Sierra Club’s objective is to promote solar by trying to beat down solar permit fees, they have picked the wrong target. For small residential systems, permit fees are important, and Richmond leads the County by offering free permits for residential solar. Richmond also leads the County and the State of California in solar watts installed per capita, including both residential and commercial, so we must be doing something right.
Reducing fees for large commercial users that might include corporations like Chevron, Target or Walmart, simply means that the money to pay City staff for processing permits would have to be made up by robbing some other program. Would Newick have us close a branch library or take a cop off the street to subsidize commercial energy users?
Newick’s flawed approach starts by significantly overestimating the cost of a 131 kW system, which also has the effect of inflating the permit fee, a function of cost. Even at the inflated $1.2 million cost, through a combination of federal tax credits and California Solar Incentive rebates, Newick’s hypothetical installation would be reduced in cost by about $370,000, courtesy of taxpayers and PG&E ratepayers.
In any event, Richmond’s permit fee is only about 1.6% of the total cost, and the permit fee would be reduced proportionately by incentives to about $14,000. There is no evidence cited by Newick that the range of solar permit fees represented in Contra Costa County has any effect on the decision of a business owner to go solar. Yet he is obsessed with this one particular metric to the exclusion of all others.
Richmond Planning Director Richard Mitchell commented: “During my past discussions with commercial and industrial developers, none of them expressed concerns about solar permit fees because their tenants are usually responsible for paying their own energy costs. Specialty tenants such as Bay Area Beverage, Sun Power or El Cerrito Natural Grocery have installed systems because they are energy intensive businesses that are looking for ways to cut their on-going energy costs. Permit fees are not a significant part of that analysis because they are negligible related to other costs associated with installing alternative energy systems.”
The Sierra Club’s campaign to expose what they apparently believe are excessive permit fees for commercial solar is a gigantic waste of time with no proven basis. There are probably a lot more important things they could be doing instead of trying to further bleed city planning and building departments, which are already severely decimated and in some cases, extinct.
The once squeaky clean Sierra Club has been acting strangely lately, most recently selling their soul to endorse the Point Molate casino project in exchange for promises of future money in a secret deal that has never seen the light of day.
Fees for business solar power units vary widely
By Mike Taugher
Contra Costa Times
Posted: 02/27/2011 12:00:00 AM PST
Updated: 02/27/2011 05:38:26 PM PST
Businesses that want to install solar panels pay vastly different permit fees in Contra Costa County depending on their location, according to a survey by the Sierra Club.
A permit for solar panels on a commercial property range from $240 to nearly $20,000 for the same project, the survey found.
High fees in some parts of the county may discourage businesses from going solar, said Kurt Newick, who did the survey. A similar survey of Alameda County found a much narrower range of charges.
State law requires municipalities to charge only their costs to process permits, Newick said
The most expensive fees were in Richmond and areas served by the county, including Clayton, Lafayette, Moraga and Orinda.
They were cheapest in El Cerrito and Antioch.
"There's a complete lack of understanding on the part of the cities of how to calculate fees," Newick said.
Alameda County's highest fees, $9,930, were found in Union City. The lowest, about $300, were in Berkeley.
Since 2005, Newick, a salesman for a South Bay solar firm, has surveyed solar fees throughout the Bay Area, Southern California and Sacramento.
In response to earlier studies, cities across the state lowered fees for homeowners.
In Contra Costa, for example, the average cost of fees for residential projects fell from $414 in 2006 to $292 in the latest survey.
But getting fees lowered for commercial projects now with local government budgets in the tank might be more difficult.
Contra Costa County officials disputed some of the study's assumptions, which they said inflated the estimated fees. However, the county is using federal grant funds to refund fees for solar permits, county officials said in a letter to Newick.
"Our department is funded entirely by revenue from fees and grants which may not be the case for other jurisdictions," building inspection division deputy director Jason Crapo wrote. "A reduction in building permit fees charged for solar installations would require offsetting fee increases charged for other types of projects, such as residential or commercial construction."
Such a shift would be unwise while the construction industry was sagging, Crapo wrote.
Richmond's department drew a distinction between residential fees, which the city waived two years ago, and those charged to businesses. But director of planning and building Richard Mitchell declined to directly address the survey results, which city officials received in mid-January.
"In order to provide you with an informed response, it would be necessary for us to review the entire survey," Mitchell said in an e-mail to Bay Area News Group. "The City Council has allocated a modest budget amount to cover review and inspection costs associated with residential solar installations. This incentive has not been extended to for-profit commercial facilities."
Newick estimated that the 131-kilowatt project he used as the basis of his survey — a solar panel installation that could fit easily on an average-size grocery store — should cost $1,300 to permit and certainly not more than $2,500.
"Those fees over $18,000, that's easily ten times higher than cost recovery," Newick said.
Residential fees in Contra Costa County, on the other hand, are now all in, or near, the range Newick expected.
After Richmond and the county, the highest fees in Contra Costa were in Pittsburg, Hercules and San Pablo.
Just slightly higher than the low fees in El Cerrito and Antioch were Pinole, Pleasant Hill, Martinez and Oakley.
In Alameda County, the highest fees after Union City were Newark, Alameda County and Emeryville. The lowest were Berkeley, Oakland, Piedmont, Livermore, San Leandro, Fremont, the city of Alameda, and Pleasanton.
The generation of power on Californians' rooftops has increased rapidly in the past decade, and particularly since former Gov. Arnold Schwarzenegger launched an initiative in 2007 that aims by 2017 to generate 3,000 megawatts from rooftops, or enough to power a city of 2.25 million people.
Today, rooftop solar panels generate about 789 megawatts.
More problematic than varying permit fees, one solar expert said, is the differences among jurisdictions in technical specifications, like fire and electrical ground specifications and constraints on roof loading.
"Should solar permit fees be lower? Sure," said Molly Sterkel, head of the California Solar Initiative. "The requirements vary a lot. That's the bigger issue."
Contact Mike Taugher at 925-943-8257.
For Contra Costa County business installing a 131-kilowatt system, 12/2011
FEE RANGE CITIES
$18,000-$20,000 Richmond, Orinda, Clayton, Contra Costa County, Lafayette, Moraga
$1,000-$8,000 Pittsburg, Hercules, San Pablo, San Ramon, Walnut Creek, Danville, Concord, Brentwood
$200-$800 Oakley, Martinez, Pleasant Hill, Pinole, Antioch, El Cerrito
Alameda County fees do not range nearly so much on 1/2011
$4,000-$9,000 Union City*, Newark, Alameda County
$1,000-$3,500 Emeryville, Hayward, Dublin, Pleasanton, Alameda
$300-$800 Berkeley, Oakland, Piedmont, Livermore, San Leandro, Fremont
Source: Sierra Club surveys