Spurred by a variety of incentive programs, homeowners, businesses, and local governments installed 158 MW of grid-tied solar photovoltaic projects in the investor-owned utility (IOU) service areas of California in 2008, more than doubling the 78 MW installed in 2007.  Despite the economic downturn, the California Public Utilities Commission reported that the rate of installations is expected to remain strong in 2009.  According to the Commission, demand to participate in the largest incentive program, the California Solar Initiative (CSI), surged in the fourth quarter of 2008, breaking the previous records for most applications in a single quarter.

The CSI program, launched in 2007, provides upfront incentives for solar systems installed on existing residential homes, as well as existing and new commercial, industrial, government, non-profit and agricultural properties within the IOU service areas.  The program has a budget of $2.17 billion with the goal of reaching 1,940 MW of installed solar capacity by the end of 2016.  Combined with other statewide programs, $3.3 billion in incentives are available.

As a bright spot in the California economy, the CSI program has generated more than $5 billion worth of investment in solar projects in California.  According to the Commission, for every $1 in incentive committed by the CSI program, an additional $6 in private funds is invested in solar technology in California.  Considering the current demand to participate in the CSI program, and the availability of solar investment tax credits, this level of investment should continue in 2009.

For further information about this topic, please contact Akin Gump.