Eligibility

Participant

Any customer of an investor-owned distribution company in California is eligible to receive incentives from this program. In addition, contractors or energy service companies who install self-generation units at these customers' sites are also eligible to receive program incentives in lieu of customer receipt of the incentives, as long as the customer agrees.

The following entities are not eligible for incentives under this program:

_ Customers who have entered into contracts for DG services (e.g. DG installed as a distribution upgrade or replacement deferral) and who are receiving payment for those services; (this does not include power purchase agreements, which are allowed)

_ Customers who are participating in utility interruptible or curtailable rate schedules or programs

_ Customers who are participating in any other state agency-sponsored interruptible, curtailable, or demand-responsiveness program

_ Utility distribution companies themselves or their facilities.

Technology Eligibility and Incentive Structure

For purposes of this program, renewable and non-renewable self-generation technologies will be eligible for incentives according to the following structure:

Incentive category	Incentive offered	Maximum percentage of project cost	Minimum system size	Maximum system size	Eligible Technologies
Level 1	$4.50/W	50%	30 kW	1 MW	_ Photovoltaics _ Fuel cells operating on renewable fuel _ Wind turbines
Level 2	$2.50/W	40%	None	1 MW	_ Fuel cells operating on non-renewable fuel and utilizing waste heat recovery
Level 3	$1.00/W	30%	None	1 MW	_ Microturbines utilizing waste heat recovery and meeting reliability criteria _ Internal combustion engines and small gas turbines, both utilizing waste heat recovery and meeting reliability criteria

Systems installed under Levels 1 and 2 must be covered by a warranty of not less than five years. Systems installed under Level 3 must be covered by a warranty of not less than three years. Where those Level 3 systems are not warrantied by the manufacturer for at least three years, customers should purchase a minimum of a three-year service contract from the manufacturer or a vendor in order to comply with this requirement. The customer may include the cost of this warranty in the system cost, for purposes of calculating their program incentive, up to the maximum percentage levels specified.

"Hybrid" self-generation systems that incorporate technologies from different incentive categories will receive payments based on the appropriate category. Diesel-fired systems are ineligible for participation in this program.

In addition, applicants to the program will be allow to consider interconnection fees charged by the utilities as part of the cost of the system, for purposes of calculating the incentive.