Financial incentives for photovoltaics are offered to electricity consumers to install and operate solar-electric generating systems, also known as photovoltaics (PV). A government may offer incentives in order to encourage the PV industry to achieve the economies of scale needed to compete where the cost of PV-generated electricity is above the cost from the existing grid. Such policies are implemented to promote national or territorial energy independence, high tech job creation and reduction of carbon dioxide emissions which cause climate change.
When, in a given country or territory, the cost of solar electricity falls to meet the rising cost of grid electricity, then ‘grid parity’ is reached, and in principle incentives are no longer needed. In some places, the price of electricity varies as a function of time and day (due to demand variations). In places where high demand (and high electricity prices) coincide with high sunshine (usually hot places with air conditioning) then grid parity is reached before the cost solar electricity meets the average price of grid electricity.
STATE OF CALIFORNIA: May 16, 2001, Business Meeting the California Energy Commission (CEC) approved an increase in rebates available through the Emerging Renewable Resources Account. The rebate has been increased to the lessor of $4.50/watt or 50 percent of the total installed cost for all sizes of systems.
This increase in rebates was made possible by the passage of Assembly Bill 29x (AB 29x), which was signed by Governor Davis last month. The bill also provides $22 million in additional funding to the program. With this increase in program funding there is now approximately $54 million in rebates available for customers of PG&E, SCE, SDG&E and Bear Valley Electric Service.
To be eligible for this increased rebate level, the funding must be reserved and the system must be installed on or after February 8, 2001 — the date Governor Davis announced his intent to augment program funding to increase rebate levels. In this context, “reserved” means the date the Commission’s Accounting Office receives an application for funding for a proposed system.
Small systems (10 kilowatt [kw] or less) with reservations filed with the Commission’s Accounting Office before February 8th or which were installed before February 8th will receive rebates of $3.00/watt or 50 percent of the
total installed cost of the system (whichever is less). Systems larger than 10kw with reservations filed with the Commission before February 8th or which were installed before February 8th will be eligible for rebates of $2.50/watt or 40 percent of the total installed cost of the system (whichever is less).
Rebates are subject to funding availability from the current account. Other account criteria will also be maintained. For example, from the original $54 million allocation, a minimum of 60 percent is for small systems (10kw or less) and a minimum of 15 percent will be reserved for systems above 10kw but less than 100kw. All monies from AB29x transferred directly into the Emerging Renewables Resources Account, $22 million, are to be reserved for
systems 10kw or less.
AB29x also provides an additional $8 million for rebates to customers of municipal and other local publicly owned electric utilities.