The Energy Trust of Oregon, a nonprofit public purpose organization dedicated to energy efficiency and renewable energy development, is partnering with the City of Portland and local neighborhood coalitions to offer residents of Portland a unique group purchasing mechanism for installing solar electric systems in their communities. Solarize Portland is an innovative program that helps residents overcome the financial and logistical hurdles of going solar. The project featured a single installer selected through a competitive process; a low, set price for participants; community-led marketing and outreach; educational workshops and a limited enrollment period. The effort was an unprecedented success, resulting in 120 new, home photovoltaic systems in five months, more than three times the number of systems installed in the city of Portland in 2008.

Energy Trust has been working for years to address the financial and policy barriers homeowners encounter when they start down the path to solar. The organization has developed several successful marketing strategies to make it easier for home and business owners to go solar in Oregon. However, Solarize Portlandwas a unique opportunity to roll community building and education, smart marketing, green job creation, and economies of scale into a single package. “It was a true triple bottom line success. You don’t get those very often,” says Lizzie Rubado, senior solar project manager, Energy Trust. Solarize Portland tackled the primary market barriers for homeowners looking to go solar: upfront cost, discomfort with contractors and the sales process, unfamiliarity with solar technology, financial complexity, and inertia. Above all, it was designed to be simple to engage and enroll in, featuring:

• Grassroots outreach and promotion by neighborhood volunteers
• Competitively selected contractor with set pricing tiers
• Educational workshops
• Free site assessments for all enrollees to determine suitability
• Incentives of $2.25/watt, plus state and federal tax credits
• Limited-time enrollment period

Though known up-front, pricing for Solarize Portland depended on the volume of participation from the community. It ranged from $7.20/watt for very little participation, down to $6.80/watt for more than 150 kilowatts of cumulatively installed capacity. However, enrollment in Solarize Portland was so fast that it became apparent early on that the price for all participants would be $6.80/watt—29 percent less than the average price in Portland at the time.

Critical to the success of Solarize Portland was the collaboration of Energy Trust, a statewide nonprofit organization with deep solar expertise and market familiarity, with Southeast Uplift  Neighborhood Coalition (SE Uplift), a local nonprofit experienced in engaging citizens and implementing community projects. The project design made the most of each organization’s strengths and credibility with homeowners. Outreach was led by SE Uplift and a corps of dedicated volunteers from five of its neighborhoods. In addition, a project website was created at www.solarizeportland.org. This website, which was written and maintained by a neighborhood volunteer, became the central resource for information about the project as it progressed.

Workshops
To make it easy for homeowners to get up to speed, Solarize Portland delivered a series of educational workshops. All interested neighbors were strongly encouraged to attend one of five introductory, one-hour seminars, held in each of the neighborhoods that were actively recruiting participants. These seminars were a Solarize Portland crash course, explaining how the project worked, the benefits of buying in bulk, how to participate and a brief introduction to solar. After attending an introductory workshop, those who wanted  additional, in-depth information were also invited to attend Q&A sessions held after business hours, three weeks in a row. These informal, open-format sessions covered different topic areas, including incentives, tax credits and financing; technical nuts and bolts; and net metering.

Results
The original goal was to enroll 50 homeowners and achieve 25 installations through the effort. Solarize Portland and its unique and successful melding of community activism, education and bulk purchasing, enrolled more than 300 homes in six weeks. In the end, 120 residential solar electric systems were installed in six months—more than triple the 38 installations completed on homes citywide in 2008. The 120 installations added 350 kilowatts of new PV capacity to Portland, and will produce an estimated 359,000 kWh of electricity per year. The project also helped provide 18 professional wage jobs for site assessors, engineers, project managers, journeyman electricians, and roofers.

The concept has grown into a winning model that is spreading quickly to other neighborhoods in Portland and beyond. The City of Portland’s Bureau of Planning and Sustainability is helping other neighborhood organizations to take Solarize Portland citywide. Thanks to their support, Solarizeprojects are gearing up now in both Northeast and Southwest Portland, with goals forecasting another 500+ installations in 2010. Meanwhile, Pendleton, a rural city in northeastern Oregon, will launch its community bulk-purchasing project in late March of 2010.

Lessons learned and recommendations for other organizations

• Plan for success: People love a good deal. Expect high levels of interest.
• Collaborate with a trusted, local organization: Let them take center stage as much as possible. They know how to talk to their constituents. You’ll also be laying the groundwork for an organization filled with solar-savvy advocates.
• Consider multiple installers: If you are targeting a community with the potential to secure more than 50 installations, select more than one contractor. Creating a queue of enthusiastic neighbors that then have to wait to be served can kill the buzz. Serving them immediately will increase the likelihood that they will install.
• Keep it focused: Define your participation area to limit the scope of your effort and keep it cost effective for your installer.
• Start early and give yourself time: Select your contractor(s) before beginning your outreach so you have answers to all your questions ahead of time. This also gives the contractor time to wrap up projects with previous clients.
• Keep it simple: Avoid creating options for people. Each decision increases the chance that you’ll lose them along the way.
• Don’t get disheartened with dissenters: This isn’t for everyone. Some people will object to the lack of choices. Connect them to the standard offer.
• Don’t be afraid to talk money: Consumers are hungry for comparative cost statistics. Being transparent speeds decision-making.
• Beg, borrow or steal a dedicated project manager: There will be lots of responsibilities to juggle and you need a single point of contact for fielding inquiries.
• Use an online sign-up: Preferably one connected to a database. You will save yourself a lot of work.

“This project has truly brought our community together, all moving toward one goal,” said Tim O’Neal, sustainability coordinator, SE Uplift. “From attending workshops to watching as neighbors went solar street by street — it’s been great to see what we’ve been able to accomplish as a group.”

Special thanks to Lizzie Rubado of the Energy Trust of Oregon for her assistance in preparing this Solar Spotlight.

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File Source: Clean Energy States Alliance

State Solar Spotlight: August 2011

Group Buying – the New Thing in Residential Solar

Last year, Clean Energy States Alliance (CESA) gave Energy Trust of Oregon (ETO) a 2010 State Leadership in Clean Energy (or SLICE) Award for its Solarize Portland program. SLICE awards are made to CESA member programs or projects that are especially innovative and effective at incentivizing, promoting, or deploying clean energy technologies, and the distinguished panel of judges determined that Solarize Portland deserved to be recognized for its innovative model of incentivizing residential solar.

Photo Copyright Energy Trust of Oregon, 2010

In their comments, the judges noted, “Portland might not have the most sunlight, but it’s been able to move ahead with a major solar initiative in Solarize Portland. This grassroots effort, facilitated with a partnership between the statewide nonprofit and local neighborhoods, moved ahead in a really short time, using a relatively modest subsidy to command a good price for residents. The model is potentially replicable by communities across the U.S., and is particularly important to study in light of declining state incentives and challenges to the PACE residential financing program.”

Since then, several other “Solarize”-type programs have popped up all over the U.S. (and beyond), in cities, states, and utility territories, and, based on their apparent success, these programs may be just the ticket to keep up the solar energy momentum in these times of diminishing state and federal incentives.

So what is so great about the Solarize model? For one thing, its marketing and promotion are usually community-led. For Solarize Portland, Energy Trust of Oregon (ETO) and the City of Portland took advantage of the existence of a strong network of neighborhood associations in Portland. ETO and the City worked with Southeast Uplift Neighborhood Coalition to directly engage citizens through grassroots outreach and education about solar options and costs, as well as providing free site assessments. The enrollment process was designed to be simple, and each step was facilitated by the project partners.

Next, it lowers the technology cost, through the use of group buying power (think Groupon and Living Social). The project partners in Portland facilitated a competitive RFP process for a contractor based on set pricing tiers – i.e., once certain participation thresholds were met, progressively lower system costs were triggered. ETO also provided its standard solar incentives to the mix: at that time, $2.25/watt; and residents were also eligible for federal and state tax credits.

Finally, it is of limited duration. While the grassroots education and group buying method were designed to address the previously slow pace of solar installations in Portland (38 were installed in all of 2008), the limited enrollment period addressed another problem, identified in a 2007 market study: most Oregonians thought about installing solar for over two years before finally taking action. A good deal with a deadline seems to consistently motivate more takers than a good deal with no end in sight.

In just six months from its inception, Solarize Portland resulted in the installation of solar systems on 120 homes (more than three times the 2008 number). The 120 installations added 347 kW of new solar photovoltaic capacity, estimated to produce over344,500 kWh of electricity per year. And, buzz generated by the program had a spillover effect: it generated downward pressure on area PV system costs and contributed to a 320% increase in area non-Solarize installations during the project timeline.

The project’s success has led to subsequent Solarize efforts in four additional Portland neighborhoods, one in the rural city of Pendleton, Oregon, and another for employees of Columbia Sportswear Company. And the model is catching on country-wide.

As a direct result of Solarize Portland’s success (and, we’d like to think, of CESA members sharing their best practices and success stories at our biannual meetings), Massachusetts Clean Energy Center (MassCEC) – also a CESA member – launched Solarize Massachusetts this April, in collaboration with the Green Communities Division of the Massachusetts Department of Energy Resources (DOER). Solarize Massachusetts will target four towns across the state (selected by lottery): Harvard, Hatfield, Scituate, and Winchester, and will be targeted to both residents and businesses. The pilot program RFP sought bulk purchasing proposals from solar integrators, with tiered costs based on participation; MassCEC and DOER will work with the selected integrator(s) to provide education, site assessments, financing models, and installation services.

Other programs in the U.S. are demonstrating the program’s success at the municipal level. In the fall of 2010, Open Neighborhoods, an organization that connects neighborhoods with clean energy opportunities through social networking tools, launched the GoSolar campaign in the Los Angeles area to offer free solar assessments and group pricing to homes and businesses. Their 2010 campaign resulted in 200 solar installations at prices under $5.00/watt – on par with utility-scale solar installed costs – and they are proceeding with subsequent campaigns based on that success.

And in mid-July, the San Francisco Department of the Environment and the World Resources Institute launched the San Francisco pilot of Solar@Work, a program that helps companies implement solar projects by offering an up-front purchase, a solar lease, or loans, all offering group purchase system discounts of 10 to 15 percent.

Meanwhile, One Block Off the Grid (1BOG), in many respects the pioneer of solar group discounts, continues to aggregate group buying initiatives across the U.S. based on demand generated through their website; individuals (and I assume businesses) can enter their zip code and find out if there’s a solar group opportunity near them. (Also see Sunny Britain, which last week announced a similar program in the UK).

1BOG has found its niche, but the state- and city-supported initiatives of the Solarize type show great potential to motivate solar installations because of specific attributes, especially the way they partner with trusted institutions such as state energy offices, public works departments, and neighborhood associations. Pairing the national expertise of group buying facilitators and solar leasing companies with the local, city, or state brand, insight, and oversight is proving to drive demand for solar, which is in turn driving down system costs, demanding increases in manufacturer and installer accountability, and sparking healthy competition in the PV industry across the U.S.

So, what’s next? Which state will next take up the Solarize torch? When will it catch on with utilities? Who of the Fortune 500 will catch the wave of company-sponsored Solarize programs for employees? What other groups/clubs/organizations could act as facilitators for these efforts? Is it too far-fetched to think my local cooperative-owned grocery store will be rolling out group discounts for its customers? Apparently not.

Innovative programs such as Solarize that leverage available funds are proving to drive down solar costs in a major way, while keeping solar installers and manufacturers employed as the states and the industry watch the federal government cut back on solar deployment in favor of next-generation R&D and manufacturing initiatives. Let’s hope the former can keep up the momentum and bridge the gap until the latter is ready for prime time.

A PDF file of this program summary and other State Solar Spotlight Program case studies can be found on this website under State Activities.

“Through the Single-Family Low-Income Incentive Program…our goal is to provide low-income homeowners access to solar photovoltaic systems, to decrease electricity usage and reduce bills without increasing monthly expenses…By enabling low-income households to purchase photovoltaic systems, this program will help ensure that all Californians have an opportunity to avail themselves of the benefits provided by the clean energy technologies this Commission so ardently supports, including solar.”

CA PUC President Michael R. Peevey
November 16, 2007

With Decision 07-11-045 on November 16, 2007, California Public Utilities Commission adopted an innovative $108.34 million dollar program to provide incentives to low-income, single-family, owner-occupied homes in investor-owned utility territories. The goal of the Single-Family Low-Income Incentive Program is to provide low-income homeowners in California access to solar photovoltaic systems and to decrease electricity usage and reduce bills without increasing monthly expenses. The name of this program has been recently changed to the Single-Family Affordable Housing (SASH) Program. This program does not provide incentives for solar water heating systems.

The CSI SASH Program provides fully-subsidized 1 kW PV systems to very low-income households, and highly-subsidized systems to other low-income households.  The Commission expects approximately 1,800 households to qualify for fully-subsidized 1 kW systems. These systems are targeted towards households that cannot afford to take out loans to cover even part of the cost of a solar PV system. An additional 5,000 households are expected to be eligible for highly subsidized systems, whose owners also can take advantage of incentives, tax credits and other financing mechanisms.

All SASH applicants must meet the legal definition of “low-income residential housing” in Public Utilities Code 2852 to qualify for the program. Eligibility is limited to households who financed their homes with low-income housing tax credits, tax-exempt mortgage revenue bonds, general obligation bonds, or local, state or federal loans or grants. In this program, the system owner must be the homeowner.

To qualify for a fully-subsidized 1 kW PV system, homeowners must first meet the eligibility requirements per Public Utilities Code 2852 and have household incomes at or below 50 percent of the area median income. The subsidy is capped at a maximum of $10,000 per qualifying household, and a maximum of 20% of program funds will be used for full subsidies.

This program will also service those homeowners who qualify under Public Utilities Code 2852, but whose household income is over 50 percent of the area median income. These families will receive partial subsidies for the installation of their PV system; the size of the subsidy will depend upon their federal tax liability. The CSI program has agreed to subsidize between 50% and 75% of the PV systems installed on these houses and to facilitate low-interest loans for the remainder of the cost.

The electricity generated by homeowners will be re-directed into the electrical grid they are on, and at the end of the year, any electricity generated will be subtracted from the cost of their total consumption. However, homeowners will not be paid for any excess energy generated during the year—Go Solar California urges people to contact their state legislator if they would like to change California’s Net Metering Law that does not obligate Utilities to pay their clients for excess energy generated and re-entered into the grid from personal solar PV systems.

Residential systems generating PV electricity will be credited between $4.75 and $7.00 per watt for the electricity they produce based on a sliding scale that reflects the homeowner’s federal income tax liability. In order to support the lowest economic echelon, this program has been designed in such a fashion that “the incentive rates are intended to provide a homeowner who has no federal tax liability with a positive cash flow in the first year of the installation.” The CPUC has decided that it prefers “to keep incentives at a constant level to avoid customer confusion” as this particular population sector will be hard to reach and market solar energy to in the first place, but it may consider adjusting the incentives later in the program based on market changes in solar energy costs. Lump-sum incentives will be provided at the following per-watt rates:

Incentive Rates for Highly Subsidized Systems (shown in $ per watt):

Federal Income Tax Liability	Qualifying Low-Income CARE-Eligible Homeowners	Qualifying Low-Income Homeowners not eligible for CARE
$0	$7.00	$5.75
$1 to $1000	$6.50	$5.25
$1001 to $2000	$6.00	$4.75

Funding for this program is being collected from distribution rates of the three primary utilities in California, PG&E, SCE and SDG&E, who are all paying a percentage of the budget based on the same percentages as the total CSI budget.

Utility	PG&E	SCE	SDG&E	Total
Percentage	43.7%	46%	10.3%	100%
Total Budget	$47.34	$49.8	$11.2	$108.34

Concerns have been raised regarding the geography necessary for optimal energy production. In order to qualify for the incentives presented by CSI, “an installation must meet a minimum performance requirement, which is .95 of the Design Factor used to calculate up-front incentive payments.”  While there was debate over the effect that this restriction would have on low-income homeowners in the less sunny areas of the state, the restriction has been put in place in order to help ensure that high-performing PV systems are installed on low-income homes, which is a goal of this program.

To govern this program throughout the state of California, the PUC has decided to select a single “Program Manager” to oversee the low-income homeowner incentive program. After much discussion between the parties involved, CSI has decided that the Program Manager should be a non-profit organization dedicated to helping and serving the low-income community. By having only a single Program Manager team, it will be possible to save money on administration and put more of it into PV systems and outreach programs.

Prior to being regarded as eligible for a PV solar system, applicants must enroll in the LIEE (low-income energy efficiency program) (if eligible) and complete an energy efficiency audit to determine what size system would be appropriate to create maximum efficiency in their particular house. Applicants may obtain a free energy efficiency audit through utility efficiency programs. Once the audit has been completed, it will be reviewed by the Program Manager who may require some “reasonable and cost-effective energy efficiency improvements” in order for the PV system to function at maximum output.

The Program Manager will work with the homeowner to determine whether applicants are eligible for the program, or whether they qualify for the full subsidies or incentives that partially subsidize the PV systems. Further, the Program Manager will help incentive recipients to find loans, other grants, and tax credits to cover any remaining costs of the system. Though each utility will credit incentives directly to qualifying applicants in its service territory, incentives will only be paid after the Program Manager verifies that installation is complete and the solar PV system is operable. It is expected that once systems have been installed, the payback period will be up to two years and the systems will remain under warranty for 10 years.

After a system has been installed, it will remain under the surveillance of the Program Manager and be subject to a formal biennial independent evaluation. In addition, the Program Manager will be similarly evaluated every two years by an independent evaluator to ensure that the program and PV systems are functioning efficiently and correctly.

By implementing the Single-Family Affordable Housing Program, California Solar Initiative hopes to install 1,000 PV energy systems within the territory of PG&E, SCE and SDG&E by the end of 2010, and to have established contact with every eligible homeowner in these territories. Other states have already begun to follow suit, as is demonstrated by the recently implemented State Rebate Program for Low-Income residences in Connecticut, funded by Connecticut Clean Energy Fund.

For the most update information on this CSI program, please see:

http://www.cpuc.ca.gov/PUC/energy/Solar/070424_csilowincome.htm

http://www.gosolarcalifornia.ca.gov/csi/low_income.html

The CPUC Decisions on the Single-Family Affordable Housing Program can be downloaded at:

http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/75400.pdf

http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/93687.pdf

http://docs.cpuc.ca.gov/word_pdf/FINAL_DECISION/99026.pdf

A special thanks to Melicia Charles, Public Utilities Regulatory Analyst, California Public Utilities Commission, for her assistance with this summary.

Commonwealth Solar Program Update - Oct. 23, 2009 by Carter Wall, Executive Director, Masschusetts Renewable Energy Trust.
News highlights from the update inlcuded:

• Within the next few weeks, [the Trust] will be contacting all customers with pending applications with detailed information about the process for making final awards under the current phase of the Commonwealth Solar Rebate program.
• The DOER has applied to DOE to reallocate some of Massachusetts’ stimulus funds to a Commonwealth Solar Stimulus rebate program. We are working through the details on this with the DOE and the DOER, and plan to make these funds available as soon as possible.
• Received approval from the Trust’s Governing Board for a new solar PV rebate program, Commonwealth Solar II, designed to complement the introduction of an SREC market in January. We expect to invite applications for this program before the end of this year, with rebate levels to be announced at that time. This program will be designed to provide predictable funding for a fixed period of time, and current plans are for this rebate to be available for smaller systems only, as is common in other states with an SREC market.

************

February 2008:  The Governor of Massachusetts and the Massachusetts Technology Collaborative (MTC) recently announced a new solar PV initiative—Commonwealth Solar. 

Over the next four years, $136 million will be dedicated to the support of solar PV projects. The contributors of the funds include the Commonwealth of Massachusetts, which will reserve $68 million from ratepayer funds, the MTC, which will set aside $10 million per year from the Renewable Energy Trust, and the final $28 million will come from the Massachusetts Division of Energy Resources’ Alternative Compliance Payment Fund established under the renewable portfolio standard (RPS) program.

The funding will be segmented in 6-month blocks to be distributed via a non-competitive application process for the installation of PV projects at residential, commercial, industrial, institutional, and public facilities. The first block—$8.5 million—will reserve a minimum of $2 million for public building and $1 million for residences.

The program includes a cap on outstanding awards in order to ensure both progress and competition. This means that the MTC will not process new applications from installers that have more than $1.2 million in uncompleted PV projects or more than $400,000 in uncompleted residential PV projects. The program recommends, but does not require, that installers obtain certification from the North American Board of Certified Energy Practitioners (NABCEP).  
 
The Commonwealth Solar program includes a requirement that all applicants, prior to receiving a rebate, must perform an energy audit, or demonstrate that one has been performed within the last six years. The MTC recommends, but will not require implementation of any feasible measures recommended by the audit, with one exception; non-residential facilities requesting a rebate for a 100 kW PV system or greater, must implement the audit measures, or explain why they will not.
 
The capacity-based rebates are set at a base of $2/watt for residential installations with adders available for system components manufactured by Massachusetts companies, below moderate assessed home values, and below certain moderate income criteria. 
 
The non-residential rebate levels decrease based on the size of the system and range from $3.25/watt for smaller systems (1-25 kW) to $1.50/watt for systems > 250 kW. There also are adders for Massachusetts components and public buildings.
 
The Commonwealth Solar Program Handbook, application materials and additional information may be found at http://www.masstech.org/solar.

• The California Public Utilities Commission, through its California Solar Initiative, provides incentives over the next decade for existing residential homes and existing and new commercial, industrial, and agricultural properties. The program is funded through revenues and collected from electric utility distribution rates.
  
• The California Energy Commission manages a 10-year, $400 million program to encourage solar in new home construction through its New Solar Homes Partnership.
  
• Local publicly-owned electric utilities will adopt, implement, and finance a solar initiative program by January 2008.

Support of Low-Income Solar Deployment

Ten percent of program funds are allocated for solar installations in low-income and affordable housing. The PUC is currently considering program design options toward a decision in 2007.

Performance-based Incentives

PV rebates given through the CPUC California Solar Initiative have changed from capacity-based payments to performance-based incentives that reward properly installed and maintained solar systems. The incentives are determined according to the system size, as follows:

• For photovoltaic systems greater than or equal to 100 kilowatts in size, incentives are paid monthly based on the actual energy produced for a period of five years. This incentive path is called Performance Based Incentives (PBI). Systems of any size may elect to opt into the PBI program.
  
• Incentives for all systems less than 100 kilowatts are paid a one-time, up-front incentive based on expected system performance. Expected performance is calculated based on equipment ratings and installation factors, such as geographic location, tilt, orientation and shading. This type of incentive is called Expected Performance-Based Buydown (EPBB). Residential and commercial incentives receive up to $2.50 per watt, depending on their location, tilt, orientation, and other installation factors. Government and non-profit organizations will receive a higher incentive (up to $3.25 per watt) to compensate for their lack of access to the federal tax credit.

The incentive payment levels will automatically be reduced over the duration of the CSI program in 10 steps, based on the volume of MW of confirmed reservations issued within each utility service territory. On average, the CSI incentives are projected to decline at a rate of 7 percent each year following the start of implementation in 2007. The incentives will gradually phase out over the 10 steps.

New Solar Homes Partnership: A focus on New Home Construction, Solar & Energy Efficiency

The New Solar Homes Partnership (NSHP) is part of the California Solar Initiative (CSI). The NSHP merges the goals of energy efficiency and solar production to accomplish the installation of 400 megawatts (MW) of solar electric systems on energy efficient new homes in California over the next ten years. The California Energy Commission is partnering with builders and developers to create a self-sustaining market for solar homes that incorporate high levels of energy efficiency and high-performing systems on 50 percent of new homes by the end of that period. The NSHP program targets new residential construction, both single family and multi-family, including affordable housing. The NSHP provides incentives based on the system’s expected performance plus technical and market support for builders participating in the program. The program officially began on January 2, 2007.

Eligible applicants are builders and developers who install qualifying solar electric systems on new, highly energy efficient residential buildings.

The program places great emphasis on energy efficiency because it is the most cost effective means to meet California’s energy and environmental needs. In establishing the NSHP, the Energy Commission aims to ensure that new residential buildings that are granted an incentive under the NSHP are significantly more energy efficient than required by the California Building Energy Efficiency Standards (Title 24, Part 6). This helps the combined energy efficiency and solar project to be as affordable as possible over the life of the home.

Residential buildings must achieve an Energy Commission specified level of energy efficiency beyond the Title 24 Standards to be eligible for incentives for solar systems. Participating residential buildings are required to meet one of the tiers of energy efficiency shown below:

Tier I – 15 percent reduction in the residential building’s combined space heating, space cooling and water heating energy compared to the current Title 24 Standards.

Tier II – 35 percent reduction in the residential building’s combined space heating, space cooling and water heating energy and 40 percent reduction in the residential building’s air conditioning energy compared to current Title 24 Standards.

The Tier I level is a minimum condition for participation in the NSHP. The Tier II level is intended to differentiate builders who make greater commitment to energy efficiency, aiming for immediate positive cash flow to homeowners and to encourage builders to move toward zero energy new homes. The Tier II level is consistent with what is being accomplished by California builders participating in the national Building America program.

In addition, for either Tier I or II, each appliance provided by the builder must be ENERGY STAR if an ENERGY STAR designation is applicable for that appliance.

There are two incentive levels available for new homes:

1. Base incentive: the Expected Performance-Based Incentive (EPBI) amount is $2.50/watt. The base incentive applies to custom homes, small developments (less than six homes), reservations where solar is identified as an option, and all residential applications where solar will be installed on less than 50 percent of the homes in a development. The actual incentive for a particular system and installation is dependent on the EPBI calculation of the system’s performance compared to the reference system.
   
2. Production housing with solar as a standard feature incentive: the EPBI amount for new homes offering solar as a standard feature is $2.60/watt. To qualify, the builder must commit at the reservation stage that a minimum of 50 percent of the homes/dwelling units in the subdivision or multi-family housing development with 6 or more homes/dwelling units will have solar systems that meet or exceed the California Flexible Installation criteria (see below for more info). The actual incentive for a particular system and installation is dependent on the EPBI calculation of the system’s performance compared to the reference system.

The NSHP is a ten-year program designed to increase the demand for solar and to ultimately lower the cost of solar as production is increased. Legislation requires the incentives to decline over time, as program participation increases, and eventually decline to zero by the end of the program. A ten percent decline in the incentive rates will occur each time a capacity goal has been achieved (in MW). The Energy Commission provides a public notice when there will be a change in the incentive levels.

Warranty Requirements

All systems must have a minimum ten-year warranty provided in combination by the manufacturer and installer to protect against defective workmanship, system or component breakdown, or degradation in electrical output of more than fifteen percent from their originally rated electrical output during the ten-year period.

Installed systems also must be third-party field-verified to ensure the installation of high performance PV systems that are consistent with the information used to determine the estimated performance, reservations, and ultimately the final rebate.