California Solar Initiative History

In 2005, the CPUC began developing the CSI program under Executive Order and later in 2006 under State law. First, the CPUC and California Energy Commission issued a joint report in June 2005 that developed an analysis of key issues related to development and implementation of the California Solar Initiative. The CPUC also opened Proceeding R0603004 to work with Parties through public comment to develop the program.

On December 15, 2005, the Commission issued D.05-12-044, an order that modified existing solar incentive levels and directed CPUC staff to provide recommendations on the program’s design. On March 2, 2006, the CPUC opened Proceeding R0603004 to work with Parties through public comment to develop the program.

On January 12, 2006, the CPUC issued an Interim Order that set initial policy and funding for the program. The CPUC was nearing an August 24, 2006 Commission vote on proposed incentive level design, administrative structure, and planning schedule, when SB1 was signed into law on August 21, 2006. While SB 1 codified the state's commitment to the creation of a self-sustaining solar market, it also introduced several unanticipated requirements for the program. In order to conform to state law, the CPUC then worked with Parties to issue a proposed decision on SB1's impacts to the CSI program for public comment; this decision was approved by Commissioners on December 14, 2006.

Learn how to become a Party to the Proceeding in order to participate in program's design.

August 24 Decision Highlights

The Aug 24 decision set out details of the California Solar Initiative (CSI) and covered six main topics:

1. It created 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 set 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 defined 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 determined 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 spelled 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, Southern California Gas Company, 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 defined metering requirements to monitor solar production.

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

Please note that SB 1 requirements now supersede some elements of the August 24 decision above. Please refer to the December 14, 2006 CPUC Decision to review what elements were changed by the new law. For the most up-to-date information on the program design, consult www.GoSolarCalifornia.ca.gov and the Program Handbook.