In the fourth installment of “Guide to Changes in State Law”, CALBO’s Legislative Team is going to take a trip back to another common legislative issue: solar energy systems.  In our first installment of the project and one of the most prevalent bills impacting local building departments, we discussed SB 379.  The California Energy Commission also hosted a public workshop on the reporting requirements for the bill which can be found here.  This article will cover another issue to further reduce the costs of solar energy systems that unfortunately will have a direct impact on building departments in Assembly Bill 1124 (AB 1124), which was passed in 2021.  AB 1124 decreases the permit fees local building departments can charge for solar energy systems.  It also changed the definition of “solar energy systems” in the law to include solar racking, solar carports, and other structural solar energy systems.  Below are the specifics of the new fee caps and definitions of the bill.

The first major implication of AB 1124 by Assemblymember Friedman changes the definition of solar energy systems.  Specifically, this bill defines a solar energy system as any solar collector or solar energy device that provides the collection, storage, and distribution of solar energy space heating, space cooling, electric generation, or water heating.  It specifies that a structural design feature such as solar racking, mounting, and elevated support structures including solar carports, solar shade structures, solar awnings, solar canopies, and solar patio covers regardless of if it is on the ground or building is a solar energy system.  It also includes photovoltaic windows, siding, and roofing shingles or tiles integrated into a building. By further expanding the definition of a solar energy system, building departments will have to review these types of solar energy systems the same as a basic residential solar energy system.  CALBO was very concerned with the expanded definition as it was not done in the regulatory process and each structure varies by the type of system if it is ground mounted or on a building.  CALBO was successful in specifying that nothing in the bill stops a local enforcement agency from conducting a plan check to confirm the safety of a solar energy system in Title 24 of the California Building Standards Code.  Additionally, this bill specifies the type of residential or commercial solar energy system fees local jurisdictions can charge for permit review on a solar energy system.

The second major impact of AB 1124 is the decreased amount of money that local jurisdictions can charge for the review of either a residential solar energy system or a commercial solar energy system.  For residential solar energy systems, local jurisdictions may not charge a fee of more than $450 plus $15 per kilowatt for each kilowatt above 15-kilowatt hours. For thermal systems, the fee cannot be higher than $450 plus $15 per kilowatt thermal for each kilowatt thermal above 10-kilowatt thermal hours.  Jurisdictions are not allowed to charge higher permit fees unless the local city, county, charter city, or city and county makes a written finding and passes a resolution or ordinance, and provides substantial evidence that increasing fees is further necessary to pay for the reasonable cost to issue a permit.  For commercial solar energy systems, jurisdictions have a cap of up to $1,000 for systems up to 50 kilowatts plus $7 per kilowatt between 51 kilowatts and 250 kilowatts, plus $5 per kilowatt for each kilowatt above 250 kilowatts. For thermal systems, the cap is also $1000 for systems up to 30 kilowatt thermal hours plus $7 per kilowatt thermal for each kilowatt thermal between 30-kilowatt thermal hours and 260-kilowatt thermal hours, plus $5 per kilowatt thermal for each kilowatt thermal above 260-kilowatt thermal hours. As is the case with residential solar energy systems, these fees can increase if the local government adopts a resolution or ordinance and makes a finding based on substantial evidence that the cost to issue the permit is higher than the fee caps.  The fee caps began on January 1, 2022, and will be in effect until January 1, 2025.

Finally, the bill details what a specific ordinance or resolution must include when considering increasing costs of permit review fees.  The bill includes a requirement that local jurisdictions have adopted ordinances, fees, and processes to streamline the submittal and approval of permits for solar energy systems as established by state guidelines, the California Solar Permitting Guidebook, and model ordinances.  The administrative costs are necessary for the review, approval, and issuance of a permit, hourly site inspection, and follow-up costs.  The sum of all charges for a residential permit fee is defined as the sum of all charges local jurisdictions have in connection with the application for a solar energy system on a single or two-family dwelling.  A commercial permit fee includes the sum of all charges needed for the application of a commercial solar energy system installed on multifamily housing that has more than two-family dwellings. Finally, a description of how the higher fee will result in a quick and streamlined approval process.

CALBO is aware that some jurisdictions have issues that the new permit fee cap could cause local building departments to subsidize the installation of a solar energy system due to the stringent limits on how much an enforcement agency can charge on permit review.  If your local jurisdiction is having these issues and not able to convince your respective local government that a fee increase is necessary, please contact bguertin@calbo.org so we can bring the issue to Sacramento as the bill is implemented across the state.  Should you have any other questions or concerns, please contact CALBO’s Public Affairs Manager, Brady Guertin at bguertin@calbo.org or 916-457-1103.