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Incentives/Policies for Renewables & Efficiency

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California Solar Initiative - PV Incentives   

Last DSIRE Review: 02/28/2013
Program Overview:
State: California
Incentive Type: State Rebate Program
Eligible Renewable/Other Technologies: Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Fed. Government, Multi-Family Residential, Low-Income Residential, Agricultural, Institutional, (All customers of PG&E, SDG&E, SCE; Bear Valley eligible only for NSHP)
Amount:Varies by sector and system size (see below)
Equipment Requirements:System components must be on the CEC's list of eligible equipment.
Systems must be grid-connected.
Inverters and modules must each carry a 10-year warranty.
PV modules must be UL 1703-certified
Inverters must be UL 1741-certified, and tested by the Energy Commission
Installation Requirements:Systems must be installed by appropriately licensed California solar contractors or self-installed by the system owner.
Installer certification by NABCEP is encouraged.
Ownership of Renewable Energy Credits:Remains with customer-generator
Program Budget:$1.95 billion over 10 years
Start Date:2007
Web Site:
Authority 1:
Date Enacted:
SB 1
Authority 2:
Date Effective:
CSI Handbook (2012)
Authority 3:
CPUC decision 06-01-024
Authority 4:
CPUC Proceeding R0803008

Note: Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) have reached their budget limits for residential rebates. Both utilities will continue accepting applications for some time, and will grant new reservations if an approved application drops out. Visit the utility web sites listed below for the most recent program information.   

In January 2006, the California Public Utilities Commission (CPUC) adopted a program -- the California Solar Initiative (CSI) -- to provide more than $3 billion in incentives for solar-energy projects with the objective of providing 3,000 megawatts (MW) of solar capacity by 2016. The CPUC manages the solar program for non-residential projects and projects on existing homes (~$2 billion), while the CEC oversees the New Solar Homes Partnership, targeting the residential new construction market (~$400 million). Together, these two programs comprise the effort to expand the presence of photovoltaics (PV) throughout the state, Go Solar California.

Originally limited to customers of the state’s investor-owned utilities, the CSI was expanded in August 2006, as a result of Senate Bill 1, to encompass municipal utility territories as well. Municipal utilities are required to offer incentives beginning in 2008 (nearly $800 million).

CSI Incentives for Non-residential Buildings and Existing Homes:
The CSI includes a transition to performance-based and expected performance-based incentives (as opposed to capacity-based buydowns), with the aim of promoting effective system design and installation. CSI incentive levels will automatically be reduced over the duration of the program in 10 steps based on the aggregate capacity of solar installed. In this way, incentive reductions are linked to levels of solar demand rather than an arbitrary timetable.

Expected Performance-Based Buydowns for systems under 30 kW began in 2007 at $2.50/W AC for residential and commercial systems (adjusted based on expected performance) and $3.25/W AC for government entities and nonprofits (adjusted based on expected performance). The incentive levels decline as the aggregate capacity of PV installations increases. Incentives will be awarded as a one-time, up-front payment based on expected performance, which is calculated using equipment ratings and installation factors such as geographic location, tilt, orientation and shading. Click here for current incentive levels for each utility. Systems under 30 kW also have the option of opting for a performance-based incentive rather than the incentive based on expected performance.

Performance-Based Incentives (PBI) for systems 30 kW and larger began in 2007 at $0.39/kWh for the first five years for taxable entities, and $$0.50/kWh for the first five years for government entities and nonprofits. The incentive levels decline as the aggregate capacity of PV installations increases. PBI will be paid monthly based on the actual amount of energy produced for a period of five years. Residential and small commercial projects under the 30 kW threshold can also choose to opt in to the PBI rather than the upfront Expected Performance-Based Buydown approach. However, all installations of 30 kW or larger must take the PBI. Click here for current incentive levels for each utility

The program is managed by the Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and the California Center for Sustainable Energy.

Low-Income Programs
Ten percent of the CSI Program budget ($216 million) has been allocated to two low-income solar incentive programs. The Single-family Affordable Solar Housing (SASH) program and the Multi-family Affordable Solar Housing (MASH) program. As required by the CPUC, the utilities have developed virtual net energy metering (VNEM) tariffs which will allow MASH participants to allocate the kWh credits from a single solar system across several electric accounts at the same building complex.

Incentives for Other Solar Electric Generating Technologies
The CSI Handbook released in January 2008 clarified the eligibility of other solar electric generating technologies which either produce electricity or displace electricity. Incentives for other solar electric generating technologies are available for CSI incentives effective October 1, 2008. The CPUC specifically recognizes electric generating solar thermal as including dish stirling, solar trough, and concentrating solar technologies, while technologies that displace electricity include solar forced air heating, and solar cooling or air conditioning. The budget for electric displacing technologies is capped at $100.8 million. While solar water heaters can also displace electricity, the CPUC excludes them from the CSI because they incentives for solar water heaters through a separate program.

CSI Program Administrators:

Pacific Gas & Electric (PG&E)
Web Site:
E-mail Address:
Contact Person: Program Manager, California Solar Initiative Program
Telephone: 877-743-4112

Center for Sustainable Energy (CSE) (on behalf of SDG&E)
Web Site:
E-mail Address:
Contact Person: Program Manager
Telephone: 858-244-1177

Southern California Edison (SCE)
Web Site:
E-mail Address:
Contact Person: Program Manager, California Solar Initiative Program
Telephone: 1-800-799-4177

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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.