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California Solar Initiative Rebates
California Solar Initiative rebates vary according to utility territory, system size, customer class, and performance and installation factors.
The rebates automatically decline in “steps” based on the volume of solar megawatts (MWs) with confirmed project reservations within each utility service territory. The figure below shows the expected schedule for rebate decline over time. To find the currently applicable rebate level in your area, check the CSI Statewide Trigger Tracker, which tracks the currently available MWs at each step level per utility and per customer class. There are two incentive paths available to consumers: Expected Performance Based Buydown and Performance Based Incentive.
The CSI Program pays solar consumers an incentive based on system performance. The incentives are either an upfront lump-sum payment based on expected performance, or a monthly payment based on actual performance over five years. The Expected Performance-Based Buydown (EPBB) is the upfront incentive available only for smaller systems. The EPBB incentive is a capacity-based incentive that is adjusted based on expected system performance calculated using an EPBB calculator that considers major design characteristics of the system, such as panel type, installation tilt, shading, orientation, and solar insolation available by location. The EPBB calculator estimates the expected performance of a solar system based various factors including the tilt, azimuth, location, PV module type and mounting type of a specific system.
The Performance Based Incentive (PBI) is paid based on actual performance over the course of five years. The PBI is paid on a fixed dollar per kilowatt-hour ($/kWh) of generation basis and is the required incentive type for systems greater than 30 kW in size, although smaller systems may opt to be paid based on PBI. In the beginning of the CSI Program, all systems 100kW and greater were required to take the PBI incentive. In January 2008, all systems 50kW and greater were required to take the PBI incentive. As of January 2010, all systems 30kW and greater are required to take the PBI incentive.
These two incentive types are explained in more detail in the table below.
CSI Incentive Types
Expected Performance-Based Buydown (EPBB) (Paid in dollars/Watt) |
Performance-Based Incentive (PBI) (Paid in cents/kWh) |
Ideal for residential and small business projects | Ideal for larger commercial, government & non-profit projects |
Systems less than 30 kW | Mandatory for all systems 30 kW and greater Systems less than 30kW can opt-in to PBI |
Incentive paid per Watt based on your system’s expected performance (factors include CEC-AC rating, location, orientation and shading) | Incentive paid based on the actual energy produced by the solar system, measured in kilowatt-hours |
One-time, lump-sum upfront payment | 60 monthly payments over five years |
The table below shows the rebate levels available at various steps, and information on currently applicable step in your region is available at the California Solar Initiative Trigger Tracker.
CSI Incentive Levels as adopted in D.06-12-033
All below information can be found by clicking here: http://www.gosolarcalifornia.ca.gov/csi/rebates.php
For all incentives, rebates, benefits, or questions pertaining to your specific solar project, call our professional team at Precise Solar Energy and let us handle all your solar needs.
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Solar Investment Tax Credit (ITC)
Below information can be found at: http://www.seia.org/policy/finance-tax/solar-investment-tax-credit
The solar Investment Tax Credit (ITC) is one of the most important federal policy mechanisms to support the deployment of solar energy in the United States. SEIA successfully advocated for a multi-year extension of the credit in 2008, which provided business certainty to project developers and investors. The ITC continues to drive growth in the industry and job creation across the country.
Quick facts
- The ITC is a 30 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties.
- The multiple-year extension of the residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006 – a compound annual growth rate of 76 percent. (See more solar industry data.)
- The existence of the ITC through 2016 provides market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn, lowers costs for consumers.
What is the Solar Investment Tax Credit?
The Investment Tax Credit (ITC) is a 30 percent federal tax credit for solar systems on residential (under Section 25D) and commercial (under section 48) properties that, under current law, remains in effect through December 31, 2016. The Section 48 commercial ITC is used for utility-scale, commercial and residential sized projects. The company that installs, develops or finances the project uses the credit. The Section 25D residential ITC is used for residential sized projects, and the homeowner applies the credit to his/her income taxes. This credit is used when homeowners purchase solar systems outright and have them installed on their homes.
How does the Solar Investment Tax Credit Work?
A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in solar property. Thus, both the commercial and residential ITC are credits equal to 30 percent of the basis that is invested in eligible property that is placed in service before December 31, 2016. After this date the commercial credit (under section 48) will drop to 10 percent and the residential credit (under Section 25D) will drop to zero—unless Congress extends this deadline or changes the “placed in service” component of the law to a “commence construction” provision.
It is incumbent on every member of the U.S. solar industry to be mindful of applicable laws and remain fully compliant with all statutory and regulatory requirements of the ITC and related programs. For more information on the Section 48 credit, please review this factsheet on Cost Basis for the ITC and 1603 Applications.
History of the Solar Investment Tax Credit
The Energy Policy Act of 2005 (P.L. 109-58) created a 30 percent investment tax credit (ITC) for commercial and residential solar energy systems that applied from January 1, 2006 through December 31, 2007. These credits were extended for one additional year in December 2006 by the Tax Relief and Health Care Act of 2006 (P.L. 109-432).
In 2007, global investment in clean energy topped $100 billion, with solar energy as the leading clean energy technology for venture capital and private equity investment. The solar tax credits helped to create unprecedented growth in the U.S. solar industry from 2006-2007. The amount of solar electric capacity installed in 2007 was double the capacity installed in 2006.
The Emergency Economic Stabilization Act of 2008 (P.L. 110-343) included an eight-year extension of the commercial and residential solar ITC, eliminated the monetary cap for residential solar electric installations, and permitted utilities and companies paying the alternative minimum tax (AMT) to qualify for the credit. In 2009, under the American Recovery and Reinvestment Act (P.L. 111-5), the $2,000 credit cap on solar hot water installations was eliminated. For more information, visit DSIRE’s website for more tax information on commercial and residential systems.
Why is the Solar ITC Important?
Tax policies related to renewable energy play a vital role in creating new high-wage American jobs, spurring economic growth, ensuring U.S. global competitiveness, lowering energy bills for consumers & businesses, and reducing pollution. The solar ITC is the cornerstone of continued growth of solar energy in the United States. The ITC reduces the tax liability for individuals or businesses that purchase qualifying solar energy technologies. As a stable, multi-year incentive, the ITC encourages private sector investment in solar manufacturing and solar project construction. The ITC has been tremendously successful in increasing deployment and lowering costs of solar energy. Since the eight-year ITC was put into place, solar prices have consistently fallen year after year while installation rates and efficiencies have continued to climb. The success of the ITC shows that a stable, long-term incentive can reduce prices and create jobs in solar energy.
- The ITC has fueled dramatic growth in solar installations. The market certainty provided by a multiple-year extension of the residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006 – a compound annual growth rate of 76 percent.
- The ITC has fueled dramatic job creation. Solar employment has grown by 86% in the last four years and is creating jobs at a rate nearly 20 times higher than employment growth in the overall economy.
The cost of solar for consumers has continued to fall. The existence of the ITC through 2016 provides market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn, lowers costs for consumers.