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Colorado Legislature Cuts Permit Fees for Solar Installations

Costs to install solar technology are set to decrease in Colorado under new legislation just passed by the state Senate yesterday. Known as the Fair Permit Act, this legislation HB-1199 prevents state and local government agencies from charging excessive permit fees and plan review fees to customers installing solar electric or solar thermal systems.

In what will likely become a new national model for lowering solar fees, the Fair Permit Act flew through the legislature by surprisingly large majorities, passing the Colorado Senate on a 33-2 vote and through the House 64-1. The bipartisan legislation was sponsored by Representative Bob Gardner, Senator Bob Bacon, and Senator Shawn Mitchell. It now heads to Governor Hickenlooper's desk to be signed into law.

Most solar installations require a permit from a local government or state agency, which can add about $2,516 per U.S. residential installation on average and can exceed $100,000 for large-scale installations, according to a recent national study. In Colorado, state permit fees more than doubled last year and local fees and processes vary widely by region. In some communities, government permit costs can exceed the labor costs to install a solar system.

"While solar costs continue to decrease through innovation and efficiency, permit costs have actually increased over the past few years," said Neal Lurie, Executive Director of the nonprofit Colorado Solar Energy Industries Association. "By keeping government fees low, this legislation helps promote economic development and save consumers money."

In 2007, local permitting and inspection added 13% to what a homeowner would spend on solar installations, today they add about 33% even though many permit processes have little or no impact on safety. 

The Fair Permit Act limits solar permit and related fees to a local government's actual costs in issuing the permit, not to exceed $500 for a residential installation or $1,000 for a commercial system. This legislation also closed loopholes and improves transparency in the permit process.

While some communities already keep permit fees low to promote economic development and cleaner energy, the Fair Permit Act will help lower the cost of going solar in other communities by thousands of dollars. 

The U.S. Department of Energy, through its SunShot Program, has recently set a goal to reduce permit and inspection costs by 88% by streamlining processes and reducing unnecessary fees.  

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