Governor Hickenlooper Signs 'Fair Permit Act'', Limiting Solar Permitting Fees

This legislation, better known as the Fair Permit Act, puts a cap on the cost of government-issued permits needed for installing solar devices. The law went into effect immediately, and is set to expire in 2018.

What Does the 'Fair Permit Act' Do?

Nationwide, the average solar installation permit added about $2,516 to a residential installation, while larger-scale installations can require permits in excess of $100,000. The Fair Permit Act effectively caps Colorado solar permit costs at $500 for residential or $1,000 for commercial permits up to 2 Megawatts (MW). Permits for Commercial solar systems generating greater than 2 MW worth of power will now pay for the actual cost of required government-issued permits. It also closes a number of other loopholes in regard to the permitting and installation Colorado solar energy systems, which will further reduce costs.

Why is This Significant?

Recent studies state that permit and other non-hardware costs related to solar system installations account for 30 to 40 percent of the overall system price tag. Colorado solar permit fees more than doubled in 2010 and, for many Denver solar customers, permit costs were significantly higher than the actual equipment. By reducing these unnecessary and superfluous fees, the cost of solar power becomes that much more accessible for businesses and homeowners interested in pursuing a renewable energy system.

What Happens Now?

This bill is a win-win for Colorado solar consumers and manufacturers. With the recent drop in the manufacturing costs of solar equipment, pricing for consumers is very affordable. Pre-existing Colorado solar incentives and rebates, coupled with this new legislation, will likely boost sales of solar system technology. In turn, this increase will fuel the creation of more Colorado solar developer jobs, as both manufacturing and installation services will be in higher demand.

Implications for Denver

Rising energy costs coupled with residential and commercial incentives from utility companies such as Xcel have already created a busy Denver solar energy market. Bargains such as allowing Denver homeowners to band together for bulk installation projects are already being offered. It will also give businesses interested in solar, an additional leg up when it comes to streamlining the financing for their solar system. This new legislation will only serve to drive the Denver solar market even further.

National Solar Implications

The Fair Permit Act is so ground-breaking that it's being touted by many as a standard of what could be a national model for lowering solar fees, and the Denver solar market has been described as one of the best in America. Colorado has always been a frontrunner in green energy, and legislation such as this will help Colorado continue to be the leader in renewable energy into the future.

Highlights of the fair permit act's tax credits include:

• The Fair Permit Act (HB 1199) was signed and took effect on 6/10/11.
• Solar permit fees for homeowners are now capped at $500.00.
• Solar permit fees under 2 MW for businesses are now capped at $1000.00.
• Solar permit fees over 2 MW are now capped at their actual cost.
• The law and it's financial assistance for solar customers is effective until 2018.