California Solar Rebate Program

How does the California rebate system work?

So how does the California rebate system work and how can it help California residential consumers install solar power on their homes?

First, you must be a customer of a utility company that participates in the state solar incentive program, the California Solar Initiative (CSI). While PG&E, SCE and SDG&E are the biggest participants, the CSI was expanded in 2006 to include small municipal utilities.

Second, for residential and commercial solar energy systems less than 30 kWh, the CSI program offers an Expected Performance Based Buydown, or EPBB, where the applicant receives the entire incentive payment at the time the system is installed, and the payment is based on expected electrical output of the system.

To figure out what your EPBB payment is per watt, you need to determine what step you are qualified. For example, under PG&E, non-residential customers are currently a step 8 and residential customers are a step 7 which means that the EPBB payment per watt is $0.35 and $0.65 respectively. You’ll notice that the EPBB payments decline by step which is due to the fact that the amount of money available under the CSI is finite and lessens as more and more people access CSI for their own solar project.

For larger solar installations (greater than 30kW), the CSI offers Performance-Based Incentives (PBI). Unlike the EPBB, with a PBI rebate, the applicant receives a portion of the incentive payment every month over a period of five years and the payment is based on the actual metered output of the system. Typically, only large scale businesses or commercial systems benefit from a PBI rebate although the EPBB payment and the PBI payment are intended to be financially equivalent.

To see how California’s solar incentives might work for a residential solar power system, please see the chart below:

What if I cannot afford the upfront cost of installing solar power even after the rebates and incentives?

Not to worry. Most solar installers offer a variety of financing mechanisms to help make the cost of solar easier to bear. Many installers may loan you the money (like a home equity loan) to cover the cost with a repayment schedule that is still less than the amount your are paying for electricity. Others will offer programs where they will lease the panels to you for a fixed costs again ensuring that the leasing costs are still less than the amount you are currently paying for electricity.

Another very exciting financing mechanism is a power purchase agreement where the solar provider secures funding on their own for the solar project and then installs the solar system on your home/office building. Subsequently, the provider maintains and monitors the energy production from the solar system. You pay nothing for this installation and maintenance. The solar provider then sells the electricity from the installed solar system to the home/building owner at a fixed contractual price for the term of the contract. So in essence, all you are paying for is clean energy produced on the top of your home.

To understand what is the best option for you, talk to multiple installers to determine what financing options they offer. Solar is very competitive today, particularly in California, and solar installers are providing excellent packages for consumers so take advantage of it. If you are interested in receiving estimates from reputable solar installers in your area in California, please click here and we’ll connect you right away!