New Solar Incentives in California

There are many benefits to investing in a solar energy system for your home or business. A solar energy system can save you a considerable amount of money over the years and is one of the most significant ways in which you, as an energy consumer, can make a positive impact on the environment. Switching to solar energy reduces carbon emissions and noise pollution. And there is also the long-term savings on repairs to consider. Photovoltaic power systems require very little maintenance and each lasts anywhere from 25 to 40 years.

From Abu Dhabi to California, engineers, entrepreneurs and scientists from all over the world are working on designing the eco-friendly city of the future, and all of their designs have one thing in common: solar energy as the primary source of power. The more you look into it, the more you start realizing that solar energy will play a central role in our efforts to end our dependence on oil and build towards a cleaner and more sustainable way of living.

Full blown energy-efficient, solar utopias are still a ways away, however. The switch to alternative energy starts with individual consumers. But if solar power is the way of the future, why aren’t more people jumping on the bandwagon?

There are many reasons, to be sure, but the considerable size of the initial monetary investment involved is certainly one of the main ones. For many people in America, and especially in these dire economic times, investing in a solar energy system is simply not on their list of priorities. With home foreclosures on the rise and the real estate and loans industries spiraling after the bubble burst, it comes as no surprise that many homeowners are cutting back on expenses.

But installing a solar energy system is actually one of the few home and property investments that’s actually guaranteed to add long-term value to your home. The problem is that people don’t tend to think in the long term. They think in the short term, and in the short term, money looks scarce and volatile.

To give consumers an added incentive to invest in solar energy, the state has been working on program initiatives that reward people who install solar power systems in their homes or commercial properties. In California, the California Public Utilities Commission started its California Solar Initiative program in 1998, and for 10 years it has been working to motivate people who choose to put their money in solar energy systems.

The program began by offering rebates to consumers who owned small energy systems. In 2001 it expanded its rebates to larger systems (those over 30 kW). Over the ensuing years, the California Solar Initiative continued to grow, getting a special PR boost in 2004 when governor Arnold Schwarzenegger announced the Million Solar Roofs program, designed to promote the installation of solar energy systems throughout the state. The program took off in 2006 and has significantly increased the amount solar power harvested and used in California.

In the first month of 2006, the CPUC sat down with the Energy Commission to determine the course of the California Solar Initiative Program through the year 2016. The money allotted for the program for 2007-2016 was $2,167 million.

We are now just getting into 2009, and some new solar incentives have come about in the past year for those property owners with enough capital to invest in a solar energy system. For consumers with solar energy systems that are smaller than 50kW, the California Solar Incentive Program offers an up-front, all-at-once incentive payment. The amount that consumers get depends on the expected performance of their particular solar unit.

This is called an Expected Performance-Based Buy-Down, or EPBB. The expected performance of a solar energy system is determined by examining the system’s equipment ratings as well as the manner of its installation. Things like a system’s geographic location, tilt, and shading are factors that can affect its efficiency. The better a system’s expected performance is, the more money the owners will receive from the incentive program.

Owners of systems bigger than 50kW get their incentive pay over a period of five years, in what is called a Performance Based Incentive program. After 2010, systems over 30kW will be made to take the PBI instead of the EPBB. More details about each of these programs can be found at www.gosolarcalifornia.org.