City’s Study of Solar Permit Fees Sets Off Cleantech Alarms

2/6/09Follow @bvbigelow

Earlier this week, I got an e-mail from an indignant solar panel installer who had heard the City of San Diego is planning to raise its fees for solar permits and inspections. “This is outrageous at a time when city, state and federal leaders are doing everything possible to increase the deployment of solar energy.”

It’s a valid point. On the other hand, San Diego City Government also happens to have a $54 million hole in its municipal budget.

Yesterday afternoon I got an anxious call from Holly Smithson at Cleantech San Diego, the non-profit group formed last year to nurture the regional cluster of companies developing renewable energy and green technologies. She said worried Cleantech members are pelting her computer with panicky e-mails over rumors of solar permit fee increases. Would I please talk to Cleantech chairman Jim Waring for an explanation?

Waring, who in 2007 left his role as the city’s Deputy Chief for Land Use and Economic Development, says he discussed the rumors with San Diego Mayor Jerry Sanders when he first heard about them. “The Mayor has no intention of raising the permit or inspection fees for solar installations,” Waring says. “The mayor is committed to the development of cleantech industries in the region.”

Michael Shames, who heads the Utility Consumers’ Action Network, told me in an e-mail that while it’s true nothing has been formally decided, “the rumored increase is amongst the options that the City is considering.”

The solar installer who alerted me to the rumors, Michael Powers of Stellar Solar, said in a follow-up e-mail: “Although renewable energy is growing in popularity, the business is being held back right now by the freeze in the credit markets which makes it difficult for residential and commercial customers to find financing for these systems. Adding another big surcharge for the permit certainly won’t help.”

Rachel Laing, a spokesman for the mayor, told me the rumors erupted because the city is undergoing a comprehensive analysis of city fees. “We’ve known for a long time we haven’t been recovering our full costs for conducting inspections of solar installations,” Laing says. (She also says the city’s true cost of inspecting a gas water heater installation costs more than the water heater itself.) It doesn’t mean that fees will increase to cover their true cost, Laing says. “At this point, it’s just really, really premature to be talking about increases.”

Waring says San Diego’s mayor recognizes the cleantech industry’s sensitivity about higher fees as well as the challenges in cultivating a cleantech industry that could become as important to San Diego as its legions of biotech and telecom companies.

Waring and Laing also note that any proposed increase in permit and inspection fees still has to go through the City Council and Mayor for approval. And like any government proceeding, that could take a while.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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