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HomeMy WebLinkAbout55A - RESO - SOLAR PERMIT FEE WAIVER PROGRAMREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MARCH 18, 2013 TITLE: RESOLUTION AUTHORIZING A TWO- YEAR EXTENSION OF THE SOLAR PERMIT FEE WAIVER PROGRAM r CI Y MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1s` Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Adopt a resolution authorizing a two year program to encourage solar installations by temporarily waiving permitting fees. DISCUSSION For the past five years the City Council has adopted a fee waiver program to encourage solar installations for both residential and commercial properties Citywide. The two primary uses of solar energy include using the sun to heat water and/or to generate electricity. Both rely on widely tested and proven technologies however, their application has been limited by the high installation costs compared to potential cost savings. This dynamic continues to shift, however, given the ever increasing cost of energy as well as various programs offered by both the State and local utility companies incentivizing solar installations. Additionally, advances in solar energy manufacturing technologies, as well as expanded markets for solar energy products are continuing to improve the cost/benefit equation. Prior to the adoption of the solar permit fee waiver in 2008, the city processed relatively few solar energy projects (less than five projects per year). This number has increased substantially, and in 2012, the City processed over 65 solar permit applications, a 30 percent increase from 2010. This increase is consistent with growth in solar projects statewide as California leads the nation in solar installations and in 2012 achieved a major milestone by installing over one Gigawatt of solar capacity, enough energy to power 100,000 homes. The City's review of solar energy projects involves both plan check and inspection services. The amount of time required for these reviews depends primarily on the size and complexity of the solar installation. For example, a passive solar water heater requires an average of one staff- hour to review while a large commercial or industrial solar installation may require as many as ten staff-hours. 55A-1 Solar Permit Fee Waiver Program March 18, 2013 Page 2 An analysis of the type of solar installation requests received over the past two years indicates that the majority of solar installations in Santa Ana are for single-family homes. Accordingly, the Building Division has implemented streamlining procedures to reduce the time required to review and issue permits for residential solar projects, as well as reducing the fiscal impact of the fee waiver. In December, 2012 Santa Ana was acknowledged for these efforts and was recognized as a model performer by the California Center for Sustainable Energy and the Energy Policy Initiatives Center in its report, Best Practices for Permitting Processes - Southern California Rooftop Solar Challenge. The City was also recognized in this report as one of only a handful of cities in the State that continue to offer a full fee-waiver for solar installations. In September, 2012 the State Legislature passed Senate Bill Number 1222 which directed how Cities and Counties may charge fees for solar energy systems. Specifically, fees for solar permits may not exceed the estimated reasonable cost of providing the service for which the fee is charged, which cannot exceed $500 plus $15 per kilowatt for each kilowatt above 15kW for residential rooftop solar and $1,000 plus $7 per kilowatt for each kilowatt between 51 kW and 250kW, plus $5 for every kilowatt above 250kW, for commercial rooftop solar energy systems. In a continued effort to promote greater sustainability in the community, it is recommended that the City Council authorize a two-year permit incentive program for solar energy projects. Such a program would waive permit/inspection fees as an incentive to encourage solar installations. Homeowners, business owners, contractors and others would still submit plans and obtain permits and inspections - but the fees for such projects would be waived. While the number of solar energy projects is expected to continue to grow, the environmental and community benefits of the use of solar energy outweighs the impacts to workloads and/or reductions in revenue. By renewing this program Santa Ana will remain a leader in promoting the use of solar energy for both commercial and residential applications. FISCAL IMPACT Based on the fee structure specified in Senate Bill 1222 and the current rate of solar system projects received, it is estimated that the total cost of the two-year program would be approximately $68,000. This amount represents an estimate of uncollected permitting fees for the general fund revenue accounts for Building Plan Check (no. 0111600253600), Plumbing Plan Check account (no. 011600253602), Electrical Plan Check account (no. 0111600253601), Building Permits account (no. 0111600251601), Plumbing Permits account (no. 0111600251602), and Electrical Permits account (no. 0111600251603). APPROVED AS TO FUNDS AND ACCOUNTS: J y VI. Trevino Executive Director Planning & Building Agency MF:rb mflreports\Solar Permits Fee waiver- RFCA_3-18-2013 Francisco Gutierrez Executive Director 01/ Finance & Management Services Agency 55A-2 ROH - 03/18/13 RESOLUTION NO. 2013-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING A TWO-YEAR CONTINUANCE OF A PROGRAM TO ENCOURAGE SOLAR INSTALLATIONS BY TEMPORARILY WAIVING PERMITTING FEES BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. For the past five years the City Council adopted a fee waiver program to encourage solar installations for both residential and commercial properties Citywide. The program's initial adoption resulted from discussions with the City Council Development Committee and a desire to broaden the City's environmental agenda. By all accounts the program has been successful over the past five years in incentivizing solar installations and should be renewed in order to continue supporting the City's goals with respect to the environment and sustainability. B. The two primary uses of solar energy include using the sun to heat water and to generate electricity. Both rely on widely tested and proven technologies, however their application has in the past been limited by the high construction/acquisition costs compared to potential cost savings. This dynamic continues to shift however given the ever increasing cost of energy as well as various programs offered by both the State and local utility companies incentivizing solar installations. C. Prior to the adoption of the solar permit fee waiver the city processed relatively few solar energy projects, less than five projects per year. This number has increased substantially and in 2012 the City processed over 65 solar permit applications a 30 percent increase from 2010. This increase is consistent with growth in solar projects statewide as California leads the nation in solar installations recently reaching a major milestone by installing over one Gigawatt of solar capacity, enough energy to power 100,000 homes. D. The City's review of solar energy projects involves both plan check and inspection services. The amount of time required for these reviews depends primarily on the size and complexity of the solar installation. An Exhibit 1 Resolution No. 2013-XXX Page 1 of 3 55A-3 analysis of the type of solar installation requests received over the past two years indicates that the vast majority of solar installations in Santa Ana are for single-family homes. Accordingly, the Building Division has implemented streamlining procedures to reduce the amount of staff time required to review and issue permits for residential solar projects, as well as reducing the fiscal impact of the fee waiver. E. A two year permit incentive program for solar energy projects would waive permit and inspection fees as an incentive to encourage solar installations. Homeowners, business owners, contractors and others would still submit plans and obtain permits and inspections but the fees for such projects would be waived during the program period. While the number of solar energy projects is expected to continue to grow, the environmental and community benefits of the use of solar energy outweighs the impacts to workloads and reductions in revenue. Section 2. The City Council hereby waives for a two year period commencing upon the date of adoption of this Resolution both plan check and inspection service fees for solar energy projects that generate heat or electricity and for which permits are granted. This wavier shall apply to permits granted no later than two years from the date of adoption of this Resolution. Section 3. This resolution shall take effect immediately upon its adoption by the City Council and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 12013. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Ryan O. Hodge Assistant City Attorney Resolution No. 2013-XXX Page 2 of 3 55A-4 AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2013-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on , and that said resolution was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana Resolution No. 2013-XXX Page 3 of 3 55A-5 55A-6