California Solar Incentive Payments Reduced

In January of this year, the California Public Utilities Commission (CPUC) voted to approve a new, well-funded, long-term solar rebate plan for California. Since then, the applications for funding have been flooding in. Interest has been so strong that special rebate cut-off triggers kicked in this week, thereby dropping the payments down.

Effective March 21, 2006, the 50 MW trigger previously approved by the Commission has been reached and all applications in excess of the 50 MW threshold, up to the next trigger at 70 MW, will automatically receive the lower incentive payment of $2.50/watt. The $342 million budget for the Solar Incentive Generation Program (SGIP) in 2006 is part of the $2.8 billion budgeted for the long-term plan over 11 years. In establishing the program, called the California Solar Initiative (CSI), the Commission noted the difficult task of setting incentive levels high enough to motivate solar investments and yet not so high that ratepayers are subsidizing projects that would be built with lower incentives. For balance, the plan contains a schedule for automatic reductions of incentive payments on an annual basis or when program participation reaches specific megawatt (MW) levels to ensure optimal funding availability over the duration of the CSI program. The triggers are designed to temper interest in the program and to ensure the funds are best distributed to promote solar.


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