Want to Know What Financial Incentives Are Available in Your Area? Ask Solar Pro Ronald Mulick

Mulick is the President of SOLARTRONICS, Inc., a solar electric design and installation firm located in Southern California with a 35-year history. SOLARTRONICS, Inc. is a member of the California Solar Energy Industries Association (CalSEIA) and is a licensed, fully insured design and installation company. When it comes to rebates and incentives, Mulick has a wealth of information to share. Here's more, in his words:

The easiest way to find out about incentives in your area is to click on the CalFinder link and contact an expert in your area. Incentive information can also be found at http://www.dsireusa.org/ for all of the states and the Federal Government, or you can call Solartronics, Inc. at (818) 889-0440, or click on www.greensolarelectric.com

Basically, there are two types of incentives that are available for solar electric installations:

Federal Incentives

The Federal Government is offering a tax credit of 30% of the system cost for commercial and residential installations. The residential tax credit is capped at $2,000. A tax credit differs from a tax write off since a tax credit is "same as cash" for payment of your tax debt. That is to say that if the homeowner or corporation owes $5,000 in taxes and has a $2,000 tax credit, then they only have to pay $3,000. The Federal Government also allows accelerated depreciation over 5 years on commercial systems. These incentives are set to expire on December 31, 2008.

State or Municipal Incentives

California has one of the most aggressive solar electric incentive programs in the world. On January 1, 2007, Governor Arnold Schwarzenegger's "California Solar Initiative" (CSI) went into effect, offering $3.2 billion in cash incentives for the installation of solar electric systems. The program will help fund 3,000 megawatts of solar electric power by the 2017. The program helps fund the installation of solar electric systems for customers that are served by Investor Owned Utilities (SCE, PG&E and SDGE). Other incentive programs are available for customers that are served by Municipal Entities (LADWP, Burbank, Glendale, etc.), see "City and Municipal Incentives" below.

The CSI incentives come in two forms:

Expected Performance Based Buydown Incentive (EPBB)

This one-time cash incentive is paid immediately after the installation of the photovoltaic system. The rebate is not taxable. It is based upon the expected performance that the system will deliver. The amount of the incentive is currently $2.20/watt of photovoltaic system installed, which covers about one third of the cost of the installed price. The incentive amount may vary according to the Investor Owned Utility, since the amount of the incentive reduces with the amount of systems installed in their area. The website that displays the current incentive amount is called the "Trigger Point Tracker." The charts on this page show the incentive declining by about 30 cents, per step of installed and funded projects. The incentive amount is locked in when your application is made, at whatever rebate amount is in the current step.

Performance Based Incentive (PBI)

This incentive pays the system owner each month for actual system performance (or electricity that the system actually produces), over a period of five years, at 34 cents per kilowatt-hour. Typically, this incentive will pay around 10% more than the EPBB incentive, when fully funded. The incentive amount reduces with the amount of systems installed statewide. The website that displays the current incentive amount is called the "Trigger Point Tracker." The charts on this page shows the incentive declining by about 7 cents, per level of installed and funded projects. The incentive amount is locked in when your application is made, at whatever rebate amount is in the current step.

Property Tax Exemption

The State of California will not increase your property tax after the installation of the improvement.

Tax Deduction

The State will allow a tax deduction for interest paid on any financing used to install a solar electric system.

City Incentives / Municipality Incentives

Some homeowners and corporations receive their power from city owned, or municipal entities. Some of these are:

• LADWP / Los Angeles Department of Water and Power
• Anaheim Public Utilities
• Burbank Water and Power
• Glendale Water and Power
• Pasadena Water and Power

Interested parties should contact these entities directly or call Solartronics, Inc. at (818) 889-0440, or email ron [at] mulick.com for more information.