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Incentives to Buy Photovoltaics

Incentives in the form of public or private subsidies can significantly alter the economics of a DER project by lowering the capital costs and accelerating the payback period. Some incentives that are presently available in the state of California are discussed below.

Energy Commission Incentives

Emerging Renewables Rebate Program

The California Energy Commission offers cash rebates on installations of renewable-energy electric generating systems. Eligible technologies include photovoltaics (PV), small wind turbines, fuel cells that use renewable fuels, and solar thermal electricity systems.

Solar Energy and Distributed Generation Grant Program

The Solar Energy and Distributed Generation Grant Program provides funding to California residents to help offset the cost of purchasing and installing new solar energy and DER systems. California residents who are purchasers, sellers, owner-builders, or owner-developers of eligible solar energy or distributed generation systems are eligible to apply.

CPUC Incentives

Self-Generation Incentive Program

On July 3, 2001, the California Public Utilities Commission (CPUC) initiated a program to offer customers of Pacific Gas & Electric, San Diego Gas & Electric, Southern California Edison, and Southern California Gas Company, incentives to install "self-generation" units to lessen the electricity load on the power grid.

Under the $125 million per year Self-Generation Incentive Program, utility customers are encouraged to install generation systems on their own property to supply all or a portion of their energy needs. Incentive funding will be available through 2004.

To qualify for the program, the DER systems must be interconnected for parallel operation with the utility grid. Greater incentives are provided for photovoltaics (solar), wind turbines, and fuel cells that use renewable fuel. No incentives are provided for diesel-powered or back-up generation units.

Utility customers can contact the following administrators for application forms, program handbooks, and additional eligibility information about the Self-Generation Incentive Program:

Utility Incentives

Los Angeles Department of Water and Power (LADWP) Rooftop Solar Incentive Program
The LADWP Solar Rooftop Incentive Program has a target to install 100,000 systems on rooftops in Los Angeles by the year 2010. The program, started on September 1, 2000, reduces the purchase price of eligible solar rooftop systems through incentive payments. It will continue for 5 years.

Sacramento Municipal Utility District (SMUD) PV Pioneer Program
SMUD launched its PV Pioneer I program in 1993, which used bulk purchasing to drive down the price of photovoltaic (PV) systems for its customers. The Pioneer I program required participating customers to pay a monthly charge to have SMUD install a 2-4 kilowatt rooftop solar array. This monthly charge covered only a portion of the cost of the PV systems. The remaining costs were spread across the utility's entire customer base.
SMUD's Pioneer II program, enacted in 1999, provides customers with a reduced-cost PV system and allows participants to receive the retail electricity price for net metering (e.g., selling excess electricity back to the utility).

Other Programs and Incentives

For more information about these incentives, or to find other incentives applicable to the installation of renewable DER systems, please visit the links below:

-(California Energy Commission)

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