Understanding the CSI
A solid understanding of the way the California Solar Initiative (CSI) works and of available solar incentives is crucial to making your California solar home or business a well-informed investment. All of the solar incentives outlined below are available to customers of California’s investor-owned utilities—PG&E, SCE and SDG&E, which represent roughly 68 percent of the state’s electric load—for solar installations of up to one megawatt in size. While not everyone in California can tap into the CSI, many municipal utilities offer similar incentives. If you're looking around online, you'll see the name "Go Solar California": this is the umbrella program for all state-sponsored solar activity, and also the host website for the CSI.
How much is the CSI rebate?
To be eligible for a CSI incentive, you must get an energy audit from either your utility or an independent auditor. The next step is to find solar installers who can give you competitive quotes. Once you’ve chosen a contractor to work with, they can then help you fill out and submit the CSI Reservation Request Form in order to reserve your rebate. The solar installer will take care of the permit process as well.
But how is that rebate amount determined? It depends on two things:
on the expected performance of your system, which is affected by components (solar panels, inverter choice), engineering and design, and site (angle and shade factors);
and on the total capacity of all the solar systems plugged into your utility at the time you apply for the rebate.
The second factor above may seem a bit confusing. As your utility’s solar capacity increases, the CSI solar rebate it offers will decrease. This is to encourage early adoption—that is, the sooner you go solar, the more you’ll save. Why? Because California, like many other states, has a Renewable Portfolio Standard that requires its utilities to achieve a certain percentage of their electric generation from renewable resources by a certain date. Solar installations are very expensive: it is cheaper for a utility to give you, say, $10,000 towards the cost of your 5kw system, and then claim the energy it produces as part of its portfolio, than it is for the utility to spend $40,000 installing those 5kw of solar itself.
Steps of the CSI
The CSI provides a regulated structure to these drops in rebate levels by splitting up each utility’s solar capacity goals into ten chunks, called “Steps” in the program. Each step represents a certain amount of solar capacity, expressed in megawatts (MWs). For example, the CSI’s Step 2 required the state to achieve a total of 70 MW installed solar capacity. (Each utility has its own quota or goal within the total.) To get there—remember, early adoption—rebates started out quite high, offering residential customers a rebate of $2.70/watt. Once PG&E had fulfilled its individual quote for that step, it moved on to Step 3 and began offering $2.20/watt. Currently PG&E is on Step 6, handing out a greatly reduced but still helpful $1.10/watt residential solar rebate. In a sense, it’s a (slow) race against the clock. Use the CSI Statewide Trigger Point Tracker to find out which step of the CSI your utility has reached on both residential and commercial tracks, which are treated separately. The graph below is the CSI's summary of how the steps work:
Types of Rebates
The CSI offers differently structured rebates for small and large systems. For a solar home or for a small commercial installation of 30 kw or less, there’s what we think of as the standard rebate: an Expected Performance-Based Buy-Down (EPBB). This is a one-time payment based on the total capacity of your system, calculated on a per-watt basis. As an example:
You’re an SCE customer with a solar home project. Your system is expected to have an operational capacity of 4.8kw.
SCE is currently on Step 4 of the CSI for residential installations, which pays out at $1.90/watt.
4800 watts x $1.90/watt = EPBB rebate of $9,120
The other type of rebate is a Performance-Based Incentive (PBI). Smaller systems are eligible for this rebate too, but it’s the only option for systems 30kw and over. These rebates are based on the projected electric output of the solar array and are paid out monthly for five years. EPBB = power capacity. PBI = power production.
NOTE ON TERMINOLOGY:
Watts are a measure of power capacity, which is why we talk about solar arrays in terms of total watts (or kilowatts, kw; or megawatts, MW). Electric production, however, is measured in watt-hours (or kilowatt-hours, kWh; or megawatt-hours, MWh), so a production incentive must also be measured in watt-hours. It’s easy to confuse these two measures, but it’s an important difference.
So, for the sake of comparison, let’s revisit the system above. Let’s say you decided to take the PBI for your 4.8kw system instead of the up-front rebate.
Your 4.8kw system might produce 24 kWh of electricity per day; that’s 43,800 kWh over 5 years.
In Step 4, the EPBB is equal to $0.26/kWh
43,800 kWh x $0.26/kWh = a $11,388 PBI rebate.
Keep in mind that electrical output varies over time, so the math isn’t quite this straightforward. Your PBI monthly payment would fluctuate with your system’s actual production.
You’d be technically better off with the PBI, since over time you’d be getting a couple thousand more dollars. But since the regular, EPBB rebate is given out all at once, it drastically reduces your out of pocket expenses and makes financing solar much easier.
ACT NOW
CSI funds won’t last forever—that’s the whole point. Once your PA receives your Reservation Request Form, it will give you a specified window of time in which to install your solar energy system and submit your Incentive Claim Form. Reserving your incentive early ensures your access to the highest possible solar rebate. California solar installations are skyrocketing. The longer you wait, the lower your potential solar rebate will be, so get started with a solar consultation as soon as possible.
ACT NOW
