CPUC Performance-Based Decision Fact Sheet

On Aug. 24, 2006, the California Public Utilities Commission (PUC) issued a decision that refines details of the California Solar Initiative (CSI) established by the Commission in January 2006, and covers six main topics:

  1. It creates performance-based incentives that reward quality solar systems.

    • Starting January 1, 2007, incentives for all solar energy systems greater than 100 kilowatts in size will be paid monthly based on the actual energy produced.

    • Incentives for all systems less than 100 kilowatts will initially be paid up-front based on expected system performance. Expected performance will be calculated based on equipment ratings and installation factors, such as geographic location, tilt, and shading.

    • Starting in 2010, incentives for all systems greater than 30 kilowatts in size will be paid based on actual energy produced.


  2. It sets incentive levels for 2007, factoring in the impact of federal tax incentives.

    • Residential and commercial customers will receive incentives of $2.50 per watt and will be eligible for additional federal tax credits.

    • Government and non-profit organizations will receive $3.25 per watt to compensate for their lack of access to the federal tax credit as non-taxable entities.


  3. It defines a schedule for incentive reductions over the 10 years of the CSI.

    • Incentives will automatically decrease in 10 steps based on the quantity of solar energy systems installed.


  4. It determines funding levels by type of project and location.

    • One-third of CSI funds will be reserved for residential solar installations.

    • Incentive levels may vary in future years by utility area and customer segment based on the pace of solar demand.


  5. It spells out how the program will be administered.

    • The CSI will be managed by the existing self-generation incentive program administrators - Pacific Gas and Electric Company, Southern California Edison, and the San Diego Regional Energy Office. The administrators will develop a statewide online application process.

    • The PUC will consider possible statewide marketing and consumer outreach in the second phase of the proceeding, and may reconsider regional or statewide administration approaches in the future.


  6. It defines metering requirements to monitor solar production.

    • All solar energy systems will be required to install separate meters to measure solar output.