Solar Working Group

Solar Working Group

MINUTES

September 4October 2, 2008

10 AM – 12PM

DEP Rachel Carson Building, Harrisburg

Room 105

Solar Working Group Members Present:

Bill Rouston / SEF
Birgitte Chapman / EAPA
Charles McPhedran / PennFuture
Courtney Lane / PennFuture
Doug Hill / CCAP
Greg Skotnicki / PA Department of Revenue
Jeffrey Heishman / PSAB
Kelly O'Donnell / PDA
Lance Simmens / Office of the Governor
Maureen Guttman / PADEP
Robb Jetty / Recurrent
Roger Clark / SDF/TRF
Tom Tuffey / Penn Future
Elam Herr / PSATS
Maureen Mulligan / Solar Alliance
Andrew Kleeman / EOS Energy Solutions
Lisa Landis / PSBA
Carmen LaRosa / PADEP/ OETD
Timothy McElvaine (via phone) / AE Polysilicon
Becky Campbell / PA DEP/PEDA
Ron Celentano / MSEIA/SDF/CES
Amy Sturges / PLCM & PSATC
Bill Rouston / SEF
Birgitte Chapman / EAPA
Charles McPhedran / PennFuture
Courtney Lane / PennFuture
Denise Brinley / PADEP
Doug Hill / CCAP
Greg Skotnicki / PA Department of Revenue
Jeanne Dworetzky / PADEP/PEDA
Jeffrey Heishman / PSAB
Kelly O'Donnell / PDA
Lance Simmens / Office of the Governor
Libby Dodson / PADEP/ OETD
Mark Connolly / MSEIA
Maureen Guttman / PADEP
Robb Jetty / Recurrent Energy, Inc
Roger Clark / SDF/TRF
Tom Tuffey / Penn Future

Others Present:

Bob May / St. Lawrence Borough
John Curtis / Green Energy Capitol Partners
Megan Milford / Pugliese Associates
Michael Tomarelli / Green Energy Capitol Partners
Randy Beck / York County Planning Commission
Bob May / St. Lawrence Borough
Karl Lasher / PADEP/OETD
Pat Henderson / PA Senate
Joe Leighton / PA Solar

Welcome and Introductions:

Lance welcomed everyone to the meeting.

Dan Griffiths welcomed everyone and stressed the importance of the group’s work. He told the group that Act 1 funding is anticipated to become available in late winter or early spring. As a result, local governments are expected to be flooded with requests for installations of solar. The group must act quickly to ensure that a model ordinance is available to these local governments as soon as possible.

Lance also informed the group that John Hanger is the new Acting Secretary for the Department.

Administrative Matters:

Lance set the next meeting date as November 19, 2008 from 10AM-12PM. The location of the meeting will be determined.

Becky Campbell provided a brief update on the status of the Act 1 Solar Program. A stakeholders meeting will be held on October 27, 2008 to discuss specific program issues. Details will be forthcoming.

The September meeting minutes were approved by the group.

Lance reviewed the day’s agenda, which included a presentation from local government representatives followed by a continuation of last month’s strawman discussion.

Presentation:

Randy Beck of the York County Planning Commission spoke on behalf of the local governments. Mr. Beck reviews proposed ordinances including stormwater planning and subdivision and land development planning. Previously he worked on the solar energy plans that the state put into place in the 1970’s. He also worked on energy contingency planning that emphasized solar technology and conservation.

Mr. Beck believes that solar access is related to a building’s orientation. Local ordinances tend to require that buildings be perpendicular to the lot lines. Mr. Beck believes that the orientation requirement is a problem, and if changed, solar access issues would be resolved. Proper building orientation, in his opinion, is the largest issue with solar installations. A requirement that “No new building will shade south facing walls of an existing building” was proposed in the York County municipalities, but it was not adopted.

Mr. Beck also pointed out that many issues arise when retrofitting existing buildings. He suggests that the group look at solar in two categories, new development and existing buildings.

Mr. Beck does not believe that aesthetics is a defensible issue with solar unless the building is located in an historic community.

Mr. Beck does not agree that special permitting is necessary for solar projects. Solar should remain a part of the regular building permit process. Mr. Beck suggests that there need to be clear separations between zoning and UCC permits. He recommends that the group focus on zoning. He believes that UCC is going to reign, which is appropriate. The working group should have a UCC expert to advise the group about these issues.

Charley McPhedran stated that the solar permit issue is regarding solar access. He believes solar access is what makes this unique.

Mr. Beck disagrees. He stated that solar installations are no different than set back or landscape requirements. He reiterated that solar provisions need to be addressed in the zoning code. As an example, Mr. Beck stated that Glen Rock Borough has a zoning ordinance dating back from the 1970’s, which speaks to solar “sky space” easements. The zoning ordinance has exemptions to setbacks for solar equipment including overhangs, eaves, etc.

Jeff Heishman expressed concern regarding using zoning. He pointed out that not all local governments have addressed solar and wind projects as part of zoning. The local governments will need to change zoning ordinances to include provisions for these types of projects.

Mr. Beck suggests that the group be very careful about what is proposed. He recommends that the group suggest zoning ordinance language. He does not recommend a separate permitting process for solar.

Tom Tuffey stated that the group will work towards providing guidance on modifications for existing ordinances to allow ease of implementation. The group will then develop a model ordinance pertaining to solar access. He also recognizes that the municipalities need a technical education on these issues.

Roger Clark asked what elements of the UCC impact solar installations and how local governments enforce the UCC, issue permits and perform inspections.

Mr. Beck said that education for local governments on these issues is critical. Jeff Heishman suggested that the Boroughs or PSATS offer planning/zoning training.

Maureen Guttman volunteered to chair a sub-group that will examine UCC issues. The group could possibly recommend amendments to the UCC. Ron Celentano, Mark Connolly, Jeff Heishman, and Amy Sturges will also participate on this sub-group.

Solar Ordinance Strawman Discussion:

Tom Tuffey felt that the September meeting was a good break-through organizational meeting. The meeting led to subsequent meeting among the local government groups as well as a subgroup meeting on the UCC.

Libby Dodson had also checked into the issue of Homeowner’s Associations as promised. The DEP legal staff said that Homeowner’s Association rules can override other laws as long as the association rules are not less stringent than the laws.

The group was provided with suggested language for zoning ordinances on a handout. Also included in the handout were some sample easement agreements. The group will provide local government organizations with suggested language for revisions to local ordinances. Tom Tuffey will provide a 2-3 page advocacy document for why local governments should make these revisions. The organizations can distribute these to their members. The Solar Working Group needs to help educate these organizations after that.

Courtney Lane looked up basic zoning laws and easements and put this information together in the handout. She would like the group to review and comment as to what works or what doesn’t. The handout will be placed in Basecamp. Input should be provided through Basecamp.

Tom Tuffey moved onto the issue of solar rights and told the group that solar access rights need to be determined by the communities. He said that solar easement agreements are very specific geometric spatial constraints. Maureen Mulligan also pointed out that as technology continues to change, we will begin to see much more integrated solar technology. These new technologies will affect easements.

Doug Hill shifted the topic to tax assessment issues. He explained to the group that there are three possible tax scenarios: field arrays, industrial use for the owner’s benefit, and residential. There are also three bases for taxes property: replacement cost, comparable sales, and income potential. Machinery and equipment is not taxable in PA.

Field arrays would count as a violation if the property is enrolled in “Clean and Green.” The array would make agricultural use on the land impractical. The property would likely be taxable.

Industrial use would be taxed on either replacement costs or on a comparable value basis. Businesses may be able to argue that solar systems are equipment or machinery which would make them tax exempt. However, solar will add value to the property.

Residential owners will have similar issues to the industrial owners. Residential properties are not inspected in great detail and home values are based on a limited amount of visible data. Most home values are based on comparables. It is not clear yet if solar will add appreciably to the value of a residential property.

Ron asked Doug if a commercial property leased their roof space under a power purchase agreement how that would affect taxes. Doug responded that the solar system would probably be considered equipment, but it is possible that the system might be taxable based on the income it generates.

Lance asked if the group would need to pursue a change in tax statute as was needed when the wind model ordinance was developed. Doug doesn’t feel that is necessary. Greg Skotnicki said that the challenge with residential solar will be determining whether the solar is personal property or realty. Doug responded that he feels solar is intended to be a permanent improvement to the property.

Ron asked for clarification on the “Clean and Green” program. Doug explained that “Clean and Green” is a covenant agreement for preferential assessments assuming agricultural use only on a property. However, if the owner stops using the property for agriculture or develops part of the property, it’s a violation of the agreement and the owner would be required to pay 7 years of rollback taxes.

Lance asked the group how to protect consumers from municipalities becoming greedy with taxes. He would like to find a way to have some standardization if possible. Tom suggested looking at the cell phone tower legislation as a model.

Maureen Guttman asked if the group should be concerned with taxes on only large scale projects or also on residential and small commercial properties as well. Doug responded that there should probably not be much concern over residential and small commercial projects. He does not expect problems with either of those categories.

To clarify, Tom asked if new equipment on a residence would not be taxed as improvement, but when the property is sold, if the value is higher because of the energy efficiency then taxes would increase. Doug responded that new construction will be included in a measure of the value of the property.

Charley McPhedran asked if the group should issue guidelines for residential taxation. Doug responded that there is no residential state authority on how property is assessed in PA. Residential property is taxed on the market value of the home.

The group shifted focus onto an update of the UCC issues. The main focus should be on training. The Pennsylvania Construction Codes Academy (PCCA) is funded through permits. PCCA has an advisory committee that determines what classes are offered.

Tom asked if the group can develop a training program and have it offered in areas where the highest solar activities take place. Rob suggested including a potential FAQ regarding solar installations. Rob expects the biggest concern to be rood attachment. Elam agreed to speak to the PCCA advisory group and their representative from DCED.

Tom also mentioned the solar training institute. He said that since there are existing courses, the group should focus on training trainers. Maureen Guttman volunteered to work out a plan regarding this.

Maureen Mulligan suggested looking to DCED and maybe L&I for training funds to develop green workforce training. Elam also suggested that some of the PA Housing Research Center money might be able to be used for training.

Charley moved on to discuss the strawman. Two documents have been posted into Basecamp. One is a copy of the strawman with comments noted. The second is a solar access document. There are some big-picture policy questions embedded here for review and comment. The next step will be to draft a solar access document to run by the local government associations. Tom asked the group to send their comments to Charley by November 1 so that the group can give the local governments something that can be adopted.

Andrew Kleeman expressed concern over several price/rate blocks in net metering. He does not believe that the PV offset is supposed to be a blended cost. He does not expect to get “time of use” rates right now, but also does not want to get the lowest block rate. He would like to see the group prepare to argue to get blended rates.

Tom suggested revisiting this issue when the group has some more information about it.

Tom Tuffey asked the group to continue working on the solar access piece. He suggested that we need a bulleted list of action items.

Charley reviewed the 5th Amendment in OS Construction with the group which discusses takings. There is a parallel provision in Article 1, Section 10 of the PA Constitution. This provision will prevent the group from developing a model solar access ordinance that allows a “taking.” He stressed to the group that we need to be reasonable as we’re looking into the issue of solar access.