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Solar Energy Costs Differ

Posted on: Monday, 28 November 2005, 18:00 CST

By Paul Rogers, San Jose Mercury News, Calif.

Nov. 28--Interested in solar power?

How much you'll pay in city fees to put solar panels on your home depends on where you live -- and some fees around Silicon Valley are so high they are placing a cloud over renewable energy, according to a new study.

Saratoga, for example, charges $95 for a permit to install solar panels on a house. Yet in Los Gatos, two miles away, city planners will sock a homeowner with a $1,287 bill for a permit to install the same system.

The findings come from a survey of 40 cities in San Mateo, Santa Clara and San Benito counties by the Loma Prieta Chapter of the Sierra Club.

"There's a huge gap in what various cities charge," said Carl Mills, a Milpitas technical writer who helped compile the survey. "Something is very wrong."

Silicon Valley may seem like the perfect region to embrace solar power, with lots of high-income, technologically savvy, environmentally friendly residents. High fees send the wrong signal, Mills and other solar supporters say -- especially when rising natural gas prices are sending electric bills soaring, global warming is on the increase and America's reliance on Middle East oil is growing.

In addition to high fees, in some towns delays, red tape and bureaucratic hassles also are making it harder to go solar, the survey found.

Sierra Club volunteers phoned 40 municipal building and planning departments over the summer and asked how much it would cost to install a typical solar-panel system on a house. They chose one that would cover 320 square feet, with the solar panels installed flush to the roof, generating 3 kilowatts, and costing $27,000.

The cheapest town was Portola Valley, where a permit for such a system would cost $50. San Jose was a reasonable $220. Most expensive of all? Millbrae, at $1,620.

"A thousand dollars in fees? That's a year's worth of electricity for some families," said Kurt Newick, sales director for Horizon Energy Systems, a Campbell solar firm.

"We need to remove these barriers," he said. "Solar power avoids transmission lines, and the need to strip mine coal, or generate nuclear waste or kill fish in dams."

The Sierra Club is recommending that all Bay Area cities keep solar permit fees at $300 or less -- an amount it says covers the time to reasonably process a permit and send out a building inspector. The average of the 40 cities in the survey: $652.

The main difference in the prices is how fees are computed. Cities with lower fees tend to have a flat price, based on their cost of processing the paperwork. Cities with higher fees, like Millbrae and Los Gatos, use a formula based on the value of the solar panels.

"We're not trying to make money here. We are trying to recover our costs," said Bud Lortz, Los Gatos director of community development.

Lortz said the Los Gatos Town Council decided several years ago that all development applications should pay their own costs.

"Certainly solar is a very good thing," he said. "But there are lots of good things. There are heating and air conditioning systems that are very energy-efficient. Should we give those people a break? The average citizen then is subsidizing that work."

Los Gatos is no stranger to controversy over solar power.

In 2003, Barry Cinnamon, president of Akeena Solar in Los Gatos, ran afoul of Los Gatos town planners when he installed solar panels on the roof of his shop. Lortz refused to give final approval of the building permit, on the grounds that three of the 18 panels were visible from the road. He said they would have to be removed or covered.

In a 5-0 vote, the Los Gatos Town Council upheld the decision. Cinnamon sued. The event drew national attention as critics slammed the town as an enclave of silly "not in my back yard" attitudes.

Last year, the case was made moot when Gov. Arnold Schwarzenegger signed a law banning cities from blocking new solar power installations for aesthetic reasons. Cinnamon got his city permit.

Lortz said he is considering recommending reduced fees for solar power to the town council in the spring.

Such reform may not be in the works for Millbrae, where city planners say they have no plans to lower the fees.

Millbrae Community Development Director Ralph Petty said his staff recomputed the permit in the study, and found they should have told the Sierra Club $1,180, not $1,620. That's how much it costs for his staff to spend several days reviewing the paperwork, he said. The Millbrae City Council has raised fees twice in the past four years on many building permits because of struggling city finances.

"These systems are not small or simple," Petty said. "There are issues with load on old roofs. And they can blow away if they are not properly mounted. The idea that you can just approve them quickly over-the-counter, that's dicey."

Not in San Jose, evidently.

San Jose is winning accolades from solar enthusiasts as one of the least bureaucratic places to get a solar permit. After a resident pays the $220 fee, the permit is issued in minutes. Inspectors are specially trained in solar-panel systems.

"We are energy-conscious," said Jennifer Garnett, a spokeswoman for the San Jose Planning, Building and Code Enforcement Department. "Anything we can do to streamline the process, we're going to do that. As a city we are trying to look for sustainable energy. It makes sense."

The $220 fee pays for staff costs to issue the permit and inspect the work, she said.

"The cost was very reasonable. The inspectors were extremely knowledgeable," said Indra Singhal, a San Jose engineer who had solar panels installed on his house near Westgate Mall in June. "It is appalling that in other locations in the Bay Area it's not like that."

Singhal and his family of four have five computers, a home theater system and a hot tub. He spent $35,000 for his solar-panel system. Where once they had a $3,000 annual electricity bill, today the bill is zero.

With more efficient solar panels, new federal tax credits and rising electric costs, solar power is growing.

In 2000, there were 296 solar-panel systems installed statewide and connected to the power grid, according to the California Energy Commission. Last year, there were 4,949 -- a 16-fold jump.

State leaders have been pushing for more.

Three years ago, former Gov. Gray Davis signed a law committing California to producing 20 percent of its electricity from renewable sources by 2017. Schwarzenegger has accelerated that target to 2010.

"Now we are seeing early adopters and enthusiasts doing it," said Pierre St. Hilaire, an engineer who is considering putting solar panels on his house in Belmont. "But like with hybrid cars, eventually everybody will want one."

Hilaire's dilemma: Belmont charges $1,100 for a permit.

"That changes the economics," he said. "It takes longer to amortize the costs. These are simple projects. You shouldn't have to pay as if you are adding an extra room on your house."

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Copyright (c) 2005, San Jose Mercury News, Calif.

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Source: San Jose Mercury News

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