Solar Permit Fees: Solar Disincentive?

Photo credit: AMagill

Commercial and residential solar panels have grown in popularity over recent years, and some cities and states have been scrambling to adjust to the new wave in home improvement. A lot of government regulation went into incentivizing solar’s spread across the nation’s rooftops and governing how these systems were installed. Meanwhile, somewhat below radar, individual cities struggled to come up with an effective rate for solar permit fees.

With no clear guidance, the numbers varied widely from city to city and county to county. A recent Sierra Club study of Bay Area cities found an extremely varied distribution of fees. For instance, in East Palo Alto a commercial solar installation might incur fees over $10,000 for an average sized system while in nearby Belmont there was no charge at all.

Environmental groups and citizens complain that high fees can be a major disincentive to solar panel installations, especially for businesses which often maintain a heavy focus on the bottom line. While residential permit fees are typically much lower than the commercial systems due to much lower electricity demands, the range is often equally varied. And the problem is by no means limited to the Bay Area.

In Colorado, in response to pressure from environmental groups and concerned citizens, the governor actually signed into law last year a bill that standardized solar permit fees because of variations similar to those found by the Sierra Club in California. Denver was charging just $59 while neighbor Aurora charged over $1,300. Colorado’s bill limits residential fees to $300 and non-residential to $1,000 maximum.

In defense of our municipalities, much is being done to correct the problem. After the Sierra Club study, several cities drastically reduced their fees, most notably Berkeley, which lowered costs for commercial systems from $4,750 to $120. Most of the problem is caused by cities being unprepared for an increase in solar panel permit applications and basing the permit cost on some percentage of the project cost as opposed to basing it on cost of inspection for the city.

While this problem will likely persist for a while in different areas around the country as solar power continues to grow, most homeowners should expect relatively reasonable permit fees to come. Several cities are even waiving the fees altogether as part of the incentive process. Not only that, but solar system costs are falling and should continue to do so, a factor that should naturally lower permit fees for cities who have a project-cost-based fee calculator. Furthermore, environmental groups, business owners, and others continue to push for standardized fees such as Colorado adopted.

Posted on June 1st in Going Solar by Dan.