The California Solar Initiative

One Year Later

The California Solar Initiative (CSI) was passed by regulators in 2006 with the goal of creating 3000 megawatts of new, solar–produced electricity by 2017 — moving the state toward a cleaner energy future and helping lower the cost of solar systems for consumers, with the goal to help build a self–sustaining solar energy market. The CSI is the second-largest solar initiative in the world (after Germany) and the largest program of its kind in the United States.

The California Solar Initiative provides up to $3.4 billion in incentives between 2007 and 2017 through two programs, one geared toward commercial buildings and existing homes, and the other for new residential construction:

1. The California Public Utilities Commission (PUC) will oversee a $2.5 billion program for commercial and existing residential customers, funded through revenues and collected from gas and electric utility distribution rates.

2. The California Energy Commission (CEC) manages a 10–year, $350 million program to encourage solar in new home and multi–unit construction through its New Solar Homes Partnership.

All electric customers of PG&E, Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) are eligible to apply for the incentives.

Beginning in 2007, customers can receive incentives starting at $2.50 per watt for photovoltaic systems up to 5Mw in size. The subsidies will be slowly reduced to zero by 2017 and (the state hopes) the cost of photovoltaic systems will be reduced through technological innovation, volume production and sales to a level where systems will become economical for consumers without the need for subsidies.

For more information, you can visit The California Solar Initiative website or call us and we’ll be glad to answer your questions.

Rebate Programs

CSI and NSH

As described in the section above (The California Solar Initiative: One Year Later), there are two rebate programs: residential and commercial installations (CSI) and new solar home owners (NSH).

One feature of the California Solar Initiative is that government and non–profit organizations can qualify for even more favorable rebate rates than before, at $3.25 per watt. Private retail customers receive $2.50 per watt.

The rebates are administered directly by the utility companies, including PG&E, SDG&E (San Diego Gas & Electric) and SCE (Southern CA Edison).

Under the previous program, rebate rates declined every July and January. With the new program, they decline based on utilization up to 10MW.

Borrego Solar helps customers enroll in the appropriate rebate program, ensuring all paperwork is correctly filed and financial benefits are realized the instant the system is switched on.

Federal Tax Credit Extended through 2008 for
Photovoltaic Systems

The “Empowering America Act’ Would Extend through 2015

The federal tax credit for homeowners with photovoltaic systems has been extended until the end of 2008, and there is currently a bill in committee (the “Empowering America Act”) to extend the credit another five years beyond that.

Home owners with PV systems qualify for a federal tax credit of 30 percent of the cost, up to $2,000. The system must provide electricity for the residence, and must meet applicable fire and electrical standards.

The “Empowering America Act,” H.R. 5985, was introduced by US Representative Dennis Cardoza (D–CA) would extend the federal solar tax credit for both homeowners and businesses through 2015.

One of the key components of the proposed bill is that it would protect solar consumers from rulings that restrict the location of solar systems on rooftop. It would also help protect customers from excessive fees for permits and licenses.

“I have introduced this bill and installed solar panels on my own home because I believe alternative energy sources such as solar are absolutely critical for the future of our economy and our national security,” said Rep. Cardoza. “These incentives would help make solar energy more affordable for millions of Americans.”

For more information, visit the Solar Energy Industries Association (SEIA) website at http://www.seia.org.