Why Are San Diego Solar Fees Getting More Expensive?
Thursday, January 14, 2010
Have you been thinking about installing a solar rooftop at your home? If you live in the City of San Diego, the fees for getting a solar power system approved and installed have substantially increased. We speak to San Diego Union-Tribune Staff Writer Onell Soto about the increase in local solar fees.
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. The City of San Diego may be gung-ho when it comes to promoting solar rooftop installation but not so gung-ho as to hold down permit prices. The cost of getting a solar installation plan approved and inspected by the city is now six times more expensive than last year. To find out how much this new fee structure adds to the cost of getting solar installed and why the city is raising the fees, I’d like to welcome my guest Onell Soto, staff writer for the San Diego Union-Tribune. This week he wrote the story on the city’s solar permit fee increase. Onell, welcome to These Days.
ONELL SOTO (Staff Writer, San Diego Union-Tribune): Good morning.
CAVANAUGH: How much does it cost to have a solar power system approved and inspected now in the city of San Diego?
SOTO: Well, today the cost is $565.00.
CAVANAUGH: And what was it last year?
SOTO: Last year it was $93.00. It had been that for several years.
CAVANAUGH: And that’s a very big increase. Now, is there – Did you find out the reason why the city is raising – has raised the fee?
SOTO: Sure, the city did a study last year looking at all its fees, all the things that it charges, and it’s looking at recovering from the people who get the benefit of those services what it costs. It’s what they call an enterprise fund. And they determined that the cost of issuing a building permit for a solar system, solar photovoltaic system, and inspecting the system after it’s installed was around $565.00. So they decided to charge that much.
CAVANAUGH: Now just a few months ago, San Diego was designated as the most solar roof-topped city in the state, is that correct?
SOTO: That’s correct. We have more rooftops with solar systems in the city of San Diego than in any other city in this state.
CAVANAUGH: And so some people might think that raising the solar fees is counterintuitive. If you want to build the solar industry, you make the fees cheaper. How is the City actually defending this decision?
SOTO: Well, they say that you got to charge people what it costs to provide the services. The increase not only reflects an increase in the cost of providing the services, the inspection services, it also reflects the end of a subsidy. The city had done a similar study about five years ago. At that point, it cost them, they estimated, about $250.00, between $240 and $260 to issue these permits but they made a decision to charge only $93.00. They’ve decided this time not to subsidize the solar installations and to charge what it costs, which now makes them the second most expensive city in terms of issuing these permits. The City also says that these permits are a fraction of what it costs to get a solar system installed. Solar systems are – can range between $20,000 and $30,000 before you get tax credits and subsidies from the state, and so they say this shouldn’t be a big problem. But solar installers say that this can be a big part, especially if you’re looking at a program that would allow you to basically get in on a no money down…
SOTO: …type of installation. Then this permit might be the difference between the decision to make – to get a system or not.
CAVANAUGH: Then you have to come up with almost six hundred dollars up front.
CAVANAUGH: And those solar installers that you spoke with, they did not necessarily agree with what City officials were telling you was the reason behind these fees. Some of them had some ideas of their own.
SOTO: Well, there is a – some of them thought that this was a part of dealing with the City’s budget problems. The City says that—and, by the way, I spoke with a couple of officials at the City, the mayor and the head of the department that issues these permits as well as a council member. The City says that the – this particular fund is not related to the general fund, that the big problems have been with the general fund. But the fact is, these are related to some of the same budget issues in terms of the pension costs that the City has and what it costs to employ people.
CAVANAUGH: How is it related? How do they say it’s related?
SOTO: Well, the pension has gotten more expensive and they have to factor in the pensions in how they figure it costs to provide these services.
CAVANAUGH: Well, let me ask you then and one of the reasons I think I read in your article was the idea that it’s not – the City has to stop subsidizing this fee or else it’s going to get in trouble because it doesn’t subsidize other fees that the City pays, you know, the permitting fees. But I – The City is going to be offering a whole lot of incentives for people to have solar installed on their homes, aren’t they? They’re still in place.
SOTO: There are incentives in place to get people to install it, and this is a part of what it costs to get a system in place. The City is going to be rolling out this year a program called the – I don’t remember what they call it but it’s under a law called AB-811 which allows people to basically get a low interest loan from the City that they repay through their property taxes. It puts that loan on the property so that if you move, you sell the house, you don’t have to worry about that debt that you took on to put the solar system on the house, the new owner takes it as any other amenity that’s part of the house and it’s paid off that way. The – And so that’s one of the incentives. There’s other incentives in – The federal stimulus program has tax credits for people who install solar systems. The California Solar Initiative, which is a state program that’s paid by everybody who buys electricity, so it’s essentially paid for by everybody, provides rebates for people who have solar systems installed. So the government has incentives in place to encourage people to put solar systems on their houses and on their buildings. This was – In some other cities, in some other communities, these fees are subsidized or are at a much lower level. They either decide that it doesn’t cost as much to provide these services or they have made a conscious decision to lower the cost. The County of San Diego doesn’t charge anything to issue these permits.
CAVANAUGH: Now, give us an idea how this new fee of $590 – 95 – no, ninety…
CAVANAUGH: …sixty-five dollars, $565.00? How does that compare with other cities around the county?
SOTO: Well, it’s the second highest. Most of the fees are between $100 and $200.00. The Sierra Club has done a number of surveys of these permit fees, obviously their interest is in getting people to get solar installed and in pushing cities to lower their fees. And so they’ve estimated that any fee higher than $324.00 is more than is needed to recoup the cost for the City to inspect and issue the permit. And another thing that is happening is that the way that these permits are issued, it’s becoming more of a standardized process because as more people get solar photovoltaic systems, they are becoming more of a, not a cookie cutter thing, but you see the same thing over and over so it should take less time to install it. The City says that they are working with solar installers to streamline that process and lower the cost and that they’re going to revisit these fees annually. So there is a chance that these fees are going to be going down this year.
CAVANAUGH: Oh, okay.
SOTO: And we’ll see what happens there. The Sierra Club says that after they’ve done their surveys, many cities are fighting to lower their fees because they don’t look so good. Their initial survey last year indicated that the highest fees were around $1500.00 in some cities in Los Angeles County.
CAVANAUGH: Wow. Yeah, I guess we should thank our lucky stars. Let me ask you, there was a mention in your article about some backlog in actually being able to take – to get a permit. Is that going to continue in the city of San Diego?
SOTO: The City says they’re working on eliminating that backlog but that they’ve had problems because of staffing changes they’ve had. They had one person who covers these permits retire, they had somebody else leave for another job. These are electric permits and the reason that these are required, according to the City, and it makes sense, these are – we’re talking about high voltage electricity on people’s houses and it needs to be inspected to make sure that it’s safe and it needs to – the plans need to make sense from an electrical point of view. But the installers say, you know, this is costing more than it costs to get, you know, the electrical system approved in some houses so they find this to be an excessive fee.
CAVANAUGH: We have a caller who’d like to join the conversation. Gary is calling from La Jolla. Good morning, Gary, and welcome to These Days.
JERRY (Caller, La Jolla): Good morning. It’s Jerry, by the way.
CAVANAUGH: Oh, I’m sorry. Jerry.
JERRY: That’s okay. That’s okay. Don’t apologize. The fee to me is no big deal. I mean, it’s a lot – When – You just made a comment there regarding the fee for electrical inspection on a house. It’s far more than that. And this is not a big deal to me, it’s just the contractors that install these things, you know, always complain about increases in fees because it makes their job of sales a little harder. But people who really want to put this in will not count this $500 or $565 fee as a big part of their decision. They’ll save more than that in just a couple of months of utility bills. Anyway, the program is called Clean Generation.
JERRY: The City of San Diego. And you can be added to their e-mail list for notification of when the program comes online, which I’m told by the mayor’s office will be in a couple of months. You can reach them at email@example.com.
CAVANAUGH: Thanks so much for your call, Jerry. That’s very informative. Thank you. And I was going to ask you when it’s expected to begin but apparently we don’t quite know yet.
SOTO: In a couple of months.
SOTO: That’s what they’re telling me.
CAVANAUGH: Well, I want to thank you so much for coming in and speaking with us today.
SOTO: My pleasure, and I’m glad you read the Union-Tribune.
CAVANAUGH: I’ve been speaking with San Diego Union-Tribune reporter Onell Soto. And if you’d like to post comment to anything you’ve heard here, go online, KPBS.org/thesedays. Coming up, the power of the simple checklist. We welcome doctor and author Atul Gawande as These Days continues here on KPBS.
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