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Building Green Industries In San Diego

Audio

Aired 1/15/10

In Mayor Sanders' State of the City speech, he said he is committed to the success of the clean technology industry in San Diego. If so, then why is the city substantially increasing its solar permit fees this year?

GLORIA PENNER (Host): In his speech, the mayor said he will not rest, I mean, this is powerful. He will not rest until San Diego is synonymous with clean technology, and that he is committed to the success of this industry. And yet San Diego has raised its fees on solar installation approval and inspection to six times what it was, from $93 to $565. Tom, is there a disconnect here?

TOM YORK (Contributing Editor, San Diego Business Journal): Well, there – I think it’s a little bit of a blip on the radar screen or a little bit of a mar on the marketing program that the mayor has put forth in terms of positioning San Diego as the, you know, the clean tech capital of California if not the west or the, you know, the alternative energy capital. But I think that what surprised me about the story that came out earlier this week in the Union-Tribune was that the official that the reporter was talking to basically admitted why the fees were being increased, excuse me, was to basically cover the fact that the cost of pensions and salaries are going up. So we see what’s happening there. I think…

PENNER: Pensions and salaries?

YORK: It says – Well, I won’t quote him verbatim but he said the fact that the pensions – or the salaries are going up and also the cost of pensions have been going up. So this is another area where the unfunded liability is being covered by monies that, you know, normally would have gone to subsidize, you know, the mayor’s dream to have, you know, San Diego become the clean tech capital of the universe, I guess.

PENNER: Well, Alisa, it sounds to me as though we’re seeing fees creeping up generally, and critics are saying that in this case the fees are unreasonable and San Diego has now gone from the third cheapest place, among the county’s 18 cities to get a permit, to the second most expensive. Would an increase be more acceptable if it were phased in?

ALISA JOYCE BARBA (Western Bureau Chief, National Public Radio News): Oh, absolutely. I mean, I think to see it go up from whatever, $93 to $500-and-something, I mean, that’s going to ring everybody’s bells and that’s going to be a story whereas if it went up from $95 to, say, $150, I think people would say, you know, bummer but here we go. But if you, you know, if you look across the board at the various cities, say, just in Southern California, you see such a wide range of fees. I mean, you see, I think it was $800 or something in Coronado until they decided to subsidize it and provide incentives and now it’s down to $200. In other places, it’s $500 and $600. Other places, it’s $60 or it’s zero.

PENNER: Chula Vista’s $45.

BARBA: Right, and, you know, there – it seems like, you know, if you really are going to be promoting this as a region that you should kind of get together and figure out a uniform fee that’s going to cover costs and going to encourage green industry but at the same time, you know, keep it at a economically viable level.

PENNER: Okay. Let’s ask our listeners about that. Have you been thinking about solar as a way of energizing your house? And if you have, are you put off by the fact that in the city of San Diego, the permit fees have gone up significantly. Our number is 1-888-895-5727, 895-KPBS. And, alternatively, do you think San Diego will, indeed, become the green energy, the green industry capital of the country, if not the world? 1-888-895-5727. Let me turn to you now, David Rolland. The question here is that solar installations cost thousands and thousands of dollars, and even though dollars are saved on conventional energy, sometimes it takes many years to recoup the cost. Will a few hundred extra dollars in permit really hurt solar development efforts? I mean, if people are going to put in $30,000 to put solar in, are they going to rebel at a couple of hundred dollars more?

DAVID ROLLAND (Editor, San Diego CiytBeat): I think it’s doubtful that they would. It is a fraction of the cost, yes. If you – you know, it all depends on how you look at it. As Alisa was saying, that, you know, if you look at it in terms of the percentage of increase and, you know, what you would’ve had to, you know, pay, you know, a year ago, then, yeah, it seems, you know, that would get your, you know, get your blood boiling a little bit. But still, if you’re going to do it, is – you know, if you’re going to spend, as you say, tens of thousands of dollars on something like this, is a couple of hundred dollars extra going to change your mind? And I would doubt it.

PENNER: Well, you know, this is one of those fees, I believe, that can be raised without the voters having to weigh in, David.

ROLLAND: Yeah, it’s an easy one, isn’t it?

PENNER: It is. And, you know, there are several things that can be raised, traffic tickets. Alisa, you were telling me about that a little earlier during the break, and when you raise fees you don’t have to risk the political anger of the community by saying to them, all right, we’re going to ask you to vote on whether we should raise taxes or put in new taxes.

ROLLAND: Well, it all depends on what that fee is, you know, how much of an increase and how many people, how many voters, it affects. You know, it’s all numbers so if it affects, you know, a large number of voters, you know, I guess there could be a political liability. But you’re right, you don’t have to go to a vote of the public for a lot of these things and, you know, and they can pass with little fanfare and, you know, affect the bottom line of the general fund.

PENNER: Under the radar, so to speak, and you don’t have to worry about your political future by going to the voters. Very interesting. Alisa.

BARBA: You know, I don’t think raising the fees for installing solar panels really jeopardizes San Diego’s position as a green power or a green technology capital. I don’t think we’re talking about solar panels on every roof as an indication that we’re leading the way in green technology. I think we’re talking about innovation, manufacturing, we’re talking about a whole industry and it’s not so much that your neighbor and my neighbor and I’m going to put solar panels on my roof, it’s basically a broader economic vision of kind of what kind of industry we want to bring into San Diego and what kind of innovation we want to promote. So I think that’s kind of a red herring to make the fee hike as a indication of a contradiction.

PENNER: But, Alisa, as the solar energy industry expands, does the city need this money to hire people to process the applications, and do we know that that’s where the fees are going to end up or will they end up in a general fund?

BARBA: You know, I have no – I actually don’t know how the accounting works on this but I don’t see that – I don’t – Again, I just don’t see solar, the number of solar panels in San Diego, as an indication that we are a leader or a follower in terms of in this green technology. I think it’s a whole different level.

PENNER: Okay, let’s hear from Don in Carlsbad. Again, our number is 1-888-895-5727. Don, you’re on with the editors.

DON (Caller, Carlsbad): Good morning.

PENNER: Good morning.

DON: But on the good news front, the county, I believe it was on December 8th, implemented state legislation AB-811, which is going to enable property owners to amortize the cost of renewable energy projects and energy efficiency over a 20 year period on their property tax bill. So those that are focused primarily on economics will be able to crunch the numbers and see whether or not energy efficiency projects and renewable energy projects make sense. Now that the county has opened the door, the various remaining cities are passing through it. I believe Poway and Chula Vista have already had their city councils pass the resolution in favor. I think Encinitas is due up next week. So this is a major deal. I think the county was the 15th in the state to implement this legislation, and not to be confused with the City of San Diego’s pilot program.

PENNER: So does this mean, Tom York, to you that the County is stepping up as the local leader in this?

YORK: I think the County has been a local leader in this in the sense that, you know, you can finance one of these projects which costs up to $60,000 over a period of 20 years. Let’s see, if I do the math correctly, $60,000 over 20 years is $3,000 a year. That’s still a substantial amount of money but it puts the ability of a homeowner to – or a small property owner to put solar panels on their roof and, you know, go green, so it makes it a little easier.

PENNER: You know, there’s some confusing information, just picking up on what Alisa was saying there. There is a Silicon Valley research firm called Collaborative Economics and it says that San Francisco leads the state in solar energy but then there was an article in the San Diego Business Journal that said San Diego is the nation’s top solar city according to the advocacy organization Environment California. So is this just a matter of subjectivity, Tom? I mean, the leader in solar or green – I mean, is this something that you really cannot document?

YORK: Well, I think the piece in the Business Journal was a commentary or an op-ed and I think it’s an opinion piece so I think you have to discount that to the degree that there’s an advocacy going on. Not to generate the information there; I think a lot of it’s valid. You know, there’s many different ways to mix and match, you know, records. San Francisco, you know, it’s – has a lot of sunny days so it wouldn’t surprise me that there’s a lot of solar collector and energy activity going on there.

PENNER: I used to live in San Francisco in an area that never saw the sun. It was called Potrero and solar simply would not work there.

ROLLAND: Yeah, I don’t remember very many sunny days in San Francisco at all. I used to live in Marin County, just on the other side of the Golden Gate Bridge and it was overcast all the time, so that’s funny. But getting – Going back to what Alisa was talking about in just sort of the overall clean tech and the mayor – Do you need to go to a break?

PENNER: Very soon. But finish what you were saying.

ROLLAND: Well, I was just going to say that San Francisco, you know, is one of the leaders in the overall clean tech and San Diego is not. And so it’s important to put what Jerry Sanders says in perspective in that every city in the country wants to be a leader in clean tech and it’s not as easy as just saying we’re going to do it.

PENNER: We’re going to talk more about that when we come back. We are talking about an increase in the permit fees for installing solar panels in your house. And this is the Editors Roundtable. I’m Gloria Penner.

PENNER: This is the Editors Roundtable on KPBS. I’m Gloria Penner. I’m at the roundtable today with Tom York of San Diego Business Journal, Alisa Joyce Barba from NPR News, and David Rolland from San Diego CityBeat and you, of course. Our number is 1-888-895-5727. We’re talking about solar energy in San Diego. We started off talking about the fact that it now costs more to get a permit to convert your home to solar but we’ve sort of gone beyond that. So let’s hear from our callers on this and see what they have to say about it. Andrew in San Diego, we start right off with you, Andrew. Welcome.

ANDREW (Caller, San Diego): Thanks, Gloria. I’m a fan of the show, and thanks for taking my call. I just wanted – I’ve been in the photovoltaic industry for four years now and I just wanted to chime in. First of all, I agree that the permits issue, the increase in the permit issue is a bit of a red herring with your guest. I think she’s kind of spot on with that. But on a secondary note, you know, the cost of solar is not so much $30,000 these days. With financing options that basically power purchase agreements, they can remove that hurdle that most folks see with regards to the payback in solar and it’s an obvious hurdle for a lot of folks. But that price for that system could be as low as zero down, it could be about a thousand bucks, it could be a very expensive trip to Home Depot but it’s certainly not $30,000 anymore. So, you know, one big thing with the adoption of renewable energy in San Diego and California and the United States is just common misconceptions kind of shooting it down for a lot of folks in not having them move forward going forward.

PENNER: Well, that’s really good to hear, Andrew. So you’re saying that it’s affordable, solar is affordable.

ANDREW: Yes, it very much is and it has become so just in the last two years with the automization of the investment tax credit being 30% and of the net cost of what the customer pays but also with the power purchase agreement. And another topic, just on the property tax, I’m curious to know more about that because, you know, they’ve kind of been – the first time they promised the rollout of that program was, I think, mid-last year or 2/2 of 2009 so I’m curious what your panel has to say about that because they’re now saying it’s going to roll out in 2010 in the summer and, well, I don’t mean to be cynical but I’m not exactly holding my breath.

PENNER: Okay, thank you, Andrew. Who raised that issue? Was it you, Tom? About the property tax?

YORK: I did.

PENNER: You did.

YORK: Yeah.

PENNER: Yeah.

YORK: My understanding is the County Board of Supervisors, you know, passed basically a law that allows this program to go forward to subsidize – or not subsidize but to split the cost of installation over a period of 20 years as part of a state legislation.

ROLLAND: Now, is that for just people in unincorporated parts of the county? Or is that…

YORK: Yes.

ROLLAND: …anybody who lives in the county?

YORK: No, it’s…

ROLLAND: Because the city – I’m a little confused because…

YORK: The City also has a similar program.

ROLLAND: Yeah, and that – and I think that’s about to start rolling out, I think.

YORK: Right.

ROLLAND: The mayor talked about it in the State of the City speech where he said he was going to call on the city council to make a series of votes on a clean generation program and I’m wondering if that – I think that’s what he’s talking about.

YORK: Well, he mentioned this before, I think, in his last State of the City address a year ago. So I am not up to speed on where these programs are but I do know that they’re being put into effect and it’s another way of putting in solar installations and, as I said earlier, and sort of ameliorating the cost over a long period of time.

PENNER: Well, it seems to me Andrew, being in the business, you know…

YORK: Right.

PENNER: …can simply call either his county supervisor’s office and get information from staff there or his city council member’s office and try to get that information. Let’s take one more call on this before we move on to the U.S. Senate race. Paul in downtown is with us now. Paul, you’re on with the editors.

PAUL (Caller, Downtown San Diego): Yeah, hi. You were talking earlier about, you know, the cost of the fees and development services and, you know, they’re an enterprise fund so they don’t get any kind of help from the general fund. So just like everybody else, they’ve been feeling the impacts of the economy so I think what we’re seeing here is they’ve probably been subsidizing these fees for awhile. Now the fees are jumping up to what they probably should’ve been awhile back and, you know, the thing is taking about the mayor’s green program and even things like water conservation. What I would like to see is, if he’s really serious about these things, that he put his money where his mouth is and, you know, maybe subsidize some of these things from the general fund or other sources or whatever.

PENNER: Whoa. I mean, but that general fund is so strapped now. They’re looking at a $77 million deficit in the fiscal year 2011. I mean, how can they subsidize out of a general fund that’s kind of at the bare bones?

PAUL: Yeah, I don’t have a solution to where the money’s coming from, I’m just saying that…

PENNER: Oh, okay.

PAUL: …you know, if he wants it to be a green city then, you know, maybe there’s other sources out there but I think what we’re seeing from DSD, the Development Services, is they’re just trying to cover their cost at this point.

PENNER: Right.

PAUL: And, you know, they’re suffering through the economy like the rest of us are.

PENNER: Okay, Paul, well thank you. That’s nice creative thinking and, you know, we’ll keep our fingers crossed. At that point, we really have to leave this and move on, so thanks to all our callers and, again, it’s KPBS.org/editors and you can register your comments with us there.

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