The Self Generation Incentive Program (SGIP)

The SGIP was adopted by the CPUC to fulfill the requirements of AB 970, which directed the CPUC to provide "differential incentives for renewable or super clean distributed generation." Since 2001, the SGIP either paid or reserved rebates up to $581 million for renewable and clean projects totalling 318 MW. Solar projects account for 113 MW, for rebates totaling $421 million. Current solar rebates are $3.50/watt, scheduled to drop to $3.00/watt January 1, 2006.

Several actions taken to resolve the electricity crisis spurred solar installations after 2001.

· The new CPUC SGIP program expanded funding available for incentives to large PV projects (above 30 kW), allowing the ERP to concentrate on smaller projects.

· The Legislature expanded net energy metering rules to allow systems from 10 kW to 1 MW to participate.

· ERP participation increased as the tiered electricity rate structure implemented in 2001 raised rates for residential customers whose energy use is above baseline quantities, which improved the economic viability of residential PV systems.

· The Legislature approved a 15 percent state tax credit for systems installed in 2001 through 2003 and 7.5 percent for systems installed in 2004 and 2005.

Figure 2 illustrates the growth of the California solar market from 1998 through 2004.