California extends cap on solar permitting fees through 2025

California Governor Jerry Brown signed AB 1414 (Friedman) into law late Sunday night, extending the statewide cap on solar permitting fees for seven more years to 2025.  The bill previously passed the California Assembly by a vote of 57-15 and Senate 29-11.

“I am pleased that Governor Brown signed this important bill to keep the costs of solar down for consumers across the state,” said Assemblymember Friedman, author of AB 1414.  “By setting a reasonable permitting fee cap we will continue to help increase access to solar to everyone. However, this bill also strikes the appropriate balance by ensuring local governments have the flexibility to adjust fee levels if necessary.”

When the law takes effect on January 1, 2018, the statewide cap on permit fees for residential installations drops from $500 to $450.  The existing fee cap for commercial projects, such as solar installations on the roofs of large businesses, remains the same at $1,000, plus a sliding scale allowing increasingly higher permit fees for larger solar projects. In addition, AB 1414 expands the cap beyond rooftop solar photovoltaic (PV) panels to include ground-mounted systems such as rural solar installations on agricultural land.  It also expands the cap to cover solar thermal installations such as rooftop solar water heating, which captures the heat energy of the sun and stores it in a solar-heated water tank in the home.

“Assemblymember Friedman is a champion for both local solar and local governments, and we greatly appreciate her leadership on AB 1414 and applaud Governor Brown for signing it into law,” said Kelly Knutsen, Senior Policy Advisor of the California Solar Energy Industries Association (CALSEIA).  “California continues its leadership in the clean energy economy by lowering the statewide cap on residential permit fees, reflecting the decreased costs of solar permitting due to local governments and installers working together to streamline the permitting process over the past few years.”

As the installed cost of solar has decreased, more Californians across the economic spectrum have installed solar.  Since 2014, 53% of residential solar installations were in zip codes with median incomes of $55,000 – $70,000 per year, according to a report by Kevala Analytics.  Despite this progress, the “soft costs” of solar installation—including permitting, interconnection, financing, customer acquisition—still remain stubbornly high, comprising over half of total solar installation costs according to the Lawrence Berkeley National Laboratory.  By lowering the solar permit fee cap to $450 for residential installations, AB 1414 will help lower those soft costs in California.

With the signing of AB 1414, Governor Brown signed into law all nine of CALSEIA’s supported bills that passed the Legislature this year.  Here is a list and short summary of those bills in numerical order:

• AB 546 (Chiu) – Requires storage permitting documents to be available and submitted online by 2019, and authorizes the Governor’s office to develop guidance on streamlined storage permitting processes.
• AB 634 (Eggman) – Removes two-thirds vote requirement to install solar on common area roofs on multifamily units in Home Owner Associations by adding new insurance requirements.
• AB 797 (Irwin) – Extends the California Solar Initiative – Thermal rebate program for two years to 2020 with the roughly $100 million in existing funds.  Dedicates 50% of funds to low-income and disadvantaged communities, 10% of funds to industrial projects, and expands eligibility to residents using propane or wood in San Joaquin Valley.
• AB 1070 (Gonzalez Fletcher) – Increases consumer protection for solar customers by requiring Contractors State License Board to develop a disclosure document that must be provided to consumers prior to sale, finance or lease of solar installation, and requires California Public Utilities Commission to develop standard inputs for calculating and presenting energy savings.
• AB 1414 (Friedman) – Extends cap on permitting fees for residential and commercial solar projects for seven more years to 2025 and expands cap to ground-mount and solar thermal systems.  Lowers statewide cap for residential solar projects from $500 to $450.
• AB 1284 (Dababneh) – Provides additional consumer protections for Property Assessed Clean Energy (PACE) financing of clean energy projects by requiring the Department of Business Oversight to regulate PACE providers, and requiring PACE lenders to ensure borrowers have the ability to repay their loan obligations.
• SB 92 (Governor’s Budget) – Provides clarity on funding requirements for AB 693 (Eggman, 2015) at up to $100 million per year for 10 years for solar incentives on low-income and disadvantaged community multi-family affordable housing buildings.
• SB 242 (Skinner) – Provides additional consumer protections for PACE financed projects, including mandating that PACE providers call homeowners to ensure they understand the terms.
• SB 801 (Stern) – Encourages storage deployment in Los Angeles Department of Water and Power territory.

News item from CALSEIA