California's Solar Incentives Continue to Decline as More Capacity is Added
California has a long history of encouraging the development of solar photovoltaic power through incentives and relaxed regulatory programs. Currently, the California Solar Initiative (CSI) program provides rebates on a per watt basis for residential or business installations. The program began with a rebate of $2.50 per watt for residential systems. As capacity is added, the rebate drops.
This summer, the rebate is expected to pass through its largest drop, going from $1.90 per watt to $1.45 per watt under the Expected Performance Based Buydown (EPBB) option. This will reflect 190 megawatts of solar power installed state-wide as a result of the CSI program. The EPBB will stay at $1.55 for the next 30 megawatts of installed solar before it will drop again to $1.10 per watt. The theory behind the dropping incentive was probably that as more solar was installed, the cost per watt would also drop resulting in less of a need for an incentive. While that has born itself out in part, the drop in cost has not been any where near the drop in the incentive.
I am installing a 5.1 kw DC/ 4.3 kw AC system this summer that is right in step with the expected cost of about $8,000 per kilowatt of installed capacity before rebates. Other incentives exist as well, such as federal tax credits and state property tax exemptions, and with my expected EPBB the system will “pay for itself” within 5-9 years depending on how much electricity rates go up over that same timeframe. The drop in the incentive would have added a year or two to that cost recovery time period.
This summer, the rebate is expected to pass through its largest drop, going from $1.90 per watt to $1.45 per watt under the Expected Performance Based Buydown (EPBB) option. This will reflect 190 megawatts of solar power installed state-wide as a result of the CSI program. The EPBB will stay at $1.55 for the next 30 megawatts of installed solar before it will drop again to $1.10 per watt. The theory behind the dropping incentive was probably that as more solar was installed, the cost per watt would also drop resulting in less of a need for an incentive. While that has born itself out in part, the drop in cost has not been any where near the drop in the incentive.
I am installing a 5.1 kw DC/ 4.3 kw AC system this summer that is right in step with the expected cost of about $8,000 per kilowatt of installed capacity before rebates. Other incentives exist as well, such as federal tax credits and state property tax exemptions, and with my expected EPBB the system will “pay for itself” within 5-9 years depending on how much electricity rates go up over that same timeframe. The drop in the incentive would have added a year or two to that cost recovery time period.
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