City seeks to restart permit fees for solar work

For the past five years, homeowners and businesses that installed solar photovoltaic systems on Oahu have been able to do so without paying the city any building permit fees.

The amount the city was giving up in fee revenue was relatively insignificant when the waiver was enacted in 2007 as a way to encourage more installations of PV systems. But with the explosion of PV projects in recent years, city officials now want to start collecting the fees again.

Officials at the Department of Planning and Permitting estimate that the city missed out on $6.2 million in PV permit fees in fiscal 2012, up 307 percent from $502,314 forgone in fiscal 2009.

There were 9,609 permits issued in fiscal 2012, for an average cost of $681 per permit.

"At the initial introduction of this exemption in October 2007, the photovoltaic industry was in its infancy. The city provided an incentive to the industry by exempting it from building permit fees," David Tanoue, then-director of the department, wrote in an Oct. 1 letter to City Council Chairman Ernest Martin.

"Today photovoltaic installation is a mature and highly competitive industry and no longer needs this incentive," Tanoue wrote. Tanoue has since resigned from his post to work in the private sector.

Martin introduced a bill Oct. 4 to repeal the permit fee exemption.

Tanoue noted that building permits issued for PV projects increased to more than 9,000 in fiscal 2012 from 697 in fiscal 2009. Project valuations for the permits increased to $142 million from $49 million during the same period.

The flurry of PV installations has resulted in a backlog of inspections that has resulted in permit delays for homeowners. In fiscal 2012, PV building permits accounted for 41 percent of the total permit workload in the department, up from 20 percent in fiscal 2011, Tanoue said.

"Given the rapid success of the photovoltaic industry, the city should not continue to subsidize this industry over all other individuals, businesses and industries needing building permit services," Tanoue said.

The Hawaii Solar Energy Association said it supports the move.

"The waiver was needed when the industry was in its infancy, but at this point it doesn’t apply. It’s fair that the fee be reinstated," said Leslie Cole-Brooks, executive director of the HSEA.

"It would be great if the fees could be used to hire more inspectors," she said. "They’re very dedicated, but they’re really pressed to get their work done."