Going Green: Solar Incentives Soar
By Dana Tsubota
"Going green" has become easier in California as green building products have become more readily available and costs have come down to levels that are more in line with conventional materials. Now the state of California is working even harder to make green building a reality by implementing a modified incentive program that rewards the installation and operation of solar photovoltaic projects at commercial and residential projects.
In January 2006, lawmakers passed the California Solar Initiative Program (CSI Program), which provides rebates for the installation and operation of solar photovoltaic projects. This 10-year, $2-billion+ program has the ambitious goal of ensuring that 3,000 megawatts of new solar facilities are installed in homes and businesses in California by 2017.
On January 1, 2007, the CSI Program changed the way in which it pays out incentives. Previously, incentives were calculated based on the overall size of the solar system, with a payment of approximately $2.80 per watt produced. The new rebate system provides for two different methods of calculating a developer's rebate. Under the Expected Performance Based Buydown incentive program (EPBB), there is a one-time upfront incentive based on a system's estimated future performance. The incentive is calculated by considering factors that have an impact on system performance, such as size, location, orientation and shading. The EPBB program currently pays $2.50 per watt produced.
The second incentive structure, called the Performance Based Incentive (PBI), is used for all systems equal to or greater than 100 kilowatts or for anyone wishing to opt-in to the PBI program. The PBI program provides a flat cents-per-kilowatt hour payment for all output from a solar system over the system's initial five years of performance. The current PBI program payment is $0.39 per kilowatt-hour.
Both the EPBB program and the PBI program reduce the incentive paid by about 10% per year, giving developers and builders a greater incentive to build early to maximize their return on investment.
Given the unrelenting demand for energy, the rising cost of fossil fuels and a more environmentally conscious consumer, California developers and builders would be wise to investigate the potential cost savings afforded through the installation of a solar photovoltaic project at a time when the state has earmarked funds to defray costs of an otherwise potentially costly alternative.
Additional information about the state of California's Solar Initiative Program, including the qualifications for a rebate, may be found at the Go Solar California website at www.gosolarcalifornia.ca.gov.
September 2007 Commercial Edition Issue