California Solar Rebates and Incentives

California is one of the world's leading solar energy users. This is due in large part to the state's progressive solar tax rebates and incentives. California's incentive programs have spurred massive growth in the solar industry there, which now claims roughly 85% of all solar installations in the United States. The state also has several solar power plants in line for construction. Here is a list of state rebates and incentives available to residential customers in California:

REBATES

California Solar Initiative (CSI)
- One of the more ambitious incentive programs in the nation, allocating $3.2 billion over 10 years.
- Eligible solar systems include solar space heating, solar thermal electric, and photovoltaics.
- There are two ways to take advantage of the rebates:
  - Expected Performance Based Buy-Down (EPBB) is for systems with less than a 50kW capacity. The up-front, one-time rebate began at $2.50/W-AC (adjusted based on expected performance) but declines by $0.30 increments. There are ten incremental drops dependent on the number of solar systems installed. In other words, the closer California get to its goal of 3000MW, the lower the rebates will be.
  - Performance Based Incentives (PBI) are for systems of 50 kW or larger. Under this program, rebates are paid on a monthly basis with the rebate depending on that month's performance. Note that smaller systems (<50kW) can opt for the PBI option but larger systems cannot choose the EPBB. Performance based incentives also decline over the span of the 10 years. You can check out this site to find current incentive levels.
- In January of 2008, the CSI handbook was edited to allow rebates for non-PV solar technologies, which produce or displace electricity, such as those mentioned above (Thermal, Space heating/cooling). However, solar hot water heaters, which can also displace electricity, were excluded. The California Public Utilities Commission (CPUC) is currently running a pilot program (see below) in the San Diego area which will likely become the basis for later incentives for solar hot water systems.
- Two Important Notes:
  - The California Solar Initiative is administered by the CPUC, therefore eligible homes must be existing, grid-tied homes. New homes fall under the jurisdiction of the California Energy Commission (CEC) and the New Solar Homes Partnership (NSHP-see below).
  - Equipment used must be installed by a licensed contractor and meet eligibility requirements, including being grid-connected and warranty specifications. Look here for a complete list of equipment requirements.
New Solar Homes Partnership (NSHP)
- The NSHP is a set of tax rebates ($400 million over 10 years) geared toward California's builders and new construction.
- It covers Photovoltaics only and targets single-family, multi-family, and low-income residential construction.
- Incentive amounts vary based on the type of housing and expected system performance.
- NSHP homes must be at least 15% more energy efficient than current building standards although builders are encouraged to reach 35% above average efficiency.
- System size:
  - Minimum: 1 kW AC
  - Maximum: 100% of the home's expected electricity needs.
- Systems must be grid-connected and either self-installed or installed by a contractor licensed in California. For other system requirements, see this site or the NSHP guidebook.
- There are no direct state rebates for homeowners under the NSHP although savings are passed on through affordable housing and minimal energy costs. Federal rebates may be available to homeowners.
Pilot Solar Hot Water Program
- This rebate program is taking place in the San Diego area for customers of the San Diego Gas & Electric company.
- The maximum incentive for residential customers is $1500 and is based on expected performance.
- The system must be retrofit for an existing consumer.
- Specific licenses are required for installers.
  - Note: Self-installers need not be licensed but must attend a one-day training workshop.
- Pool/Spa heating systems are NOT covered under the rebate program.
- Rebates are paid to contractors to be passed on to the consumer. Rebates are directly paid to owners of self-installed systems.

INCENTIVES

California State Feed-In Tariff
- Adopted in 2006, this feed-in tariff includes both solar thermal electric and photovoltaics.
- Prices are based on the CPUC market price and adjusted by time of use with higher rates being paid out during hours of peak demand (8am-6pm).
- Customers may enter 10, 15, or 20 year contracts.
- Maximum system size is 1.5 mW.
  - Important Note: Any customer who participates in the feed-in tariff is unable to participate in any other state incentive.

These are just the State of California's tax rebates and incentives. For more information on state, local, and utility incentive programs for homeowners in California, visit the Database of State Incentives for Renewables & Efficiency (DSIRE).