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There is also a 30% Federal Tax Credit based on the total system cost (backup components and installation costs are ineligible). The maximum Federal Credit for residences is $2000.00 but it is not limited for businesses. In addition, businesses can accelerate depreciation over 5 years. The basis is 85% of the System Cost after the Rebate. California, being the first state to "deregulate" has extended it's "buydown program" for utility interface systems until 2017 with incentives being reduced as mW triggers are passed. For more information visit the California Solar Initiative website. All states are looking at deregulation. If your state hasn't done it, it will. For more information on your state go to dsireusa.org.

In California we have recently experienced catastrophic energy shortages and rolling brownouts. Grid Tied Solar Power Systems installed by individual homeowners or commercial businesses can reduce the utility's power needs when they are the greatest, during hot summer days. The power sent thru the utility interface to other users is credited to your bill. So you can actually contribute as much as you are using each year and pay only the service charges. Unfortunately, the utility will not pay you for excess power, so its best to have a system designed slightly smaller than your expected usage. Off Grid Systems without a Utility Interface do not currently qualify for the buydown program.

A simple utility interface system has minimal components. Power production (solar, wind, or fuel cells), connecting equipment, wiring, conduit, mounting assemblies etc. for the installation (must conform to NEC and local codes), and Inverters which take the power that's produced and make it compatible and in phase with the utility power (a list of qualifying components is on the Ca Energy Commission web page ).

Installation of all systems by licensed contractors or home owners must meet the following CSI/NSHP requirements.
1). All components be certified (on their list-see above)
2). Installation must be done by a licensed contractor or home owner.
3). Installation must have approved utility company disconnect and a separate performance meter to display and record power production data unless the Inverter has one.
A performance monitoring service is required for systems opting to be paid monthly for 5 years for total kWh produced. (PBI) 4). System must have a final inspection from local building inspector and utility company prior to getting the systems authorized rebate.

The way the program works is you fill out an application and send it to the CEC/PUC administrator. This will reserve rebate funds for your proposed utility interface system and must include the size(estimated watts) of your proposed system. Once you get confirmation that your rebate funds are allocated, you must demonstrate within 60-90 days that the project has begun. You don't have to complete tha installation in that time period, just provide documentation that you are underway. After the installation is complete and the utility has approved connection to the grid, you must send proof of payment and copies of warrantees to the program administrator before receiving your rebate.

Existing Residential systems of 50kW or less are eligible for a maximum $2.20 per watt incentive, while Commercial systems under 50kW are eligible for a maximum $1.55 per watt incentive based on expected performance (EPBB). A system performance meter is required and will verify your power production is in line with the rated watts the rebate was based on.

For systems larger than 50kW the incentive will be paid monthly for 5 years based on the actual energy produced or PBI (Performance Based Incentive), currently $0.34 per kWh for Residential Systems and $0.22 per kWh for Commercial systems. Incentives will drop when mW trigger amounts are reached as each utility's residential and commercial grid tie system applications are approved and funds reserved. So now is the time to act. See the CSI Trigger Tracker for current information.

You must also check with local code enforcement officers to get local code criteria, the proper permits and your utility company's requirements. You then purchase equipment, install it and pass the final inspections. At this point you send a copy of the final inspections, copies of warranties and amended final system costs to the energy commission. California energy commission rebates are usually received within six weeks.

The 30% Federal Tax Credit is based on the total system cost including installation, permits and taxes. There is a $2000.00 maximum credit for residential systems but no limit for businesses. Businesses can also claim accelerated (5 year) depreciation based on 85% of the total cost. Businesses that take advantage of both tax credits and depreciation can usually reduce their net cost to about 20% of the system's original cost within five years. And that figure doesn't even include savings from utility bills.

Another benefit - your home's value has increased by installing a Solar Electric Power generating system and the State Assembly has extended the exemption from property tax increases for such systems until 2009. This is called a win/win situation!

However one problem with this scenario is that when the power goes down, this system shuts down. Simple utility interface systems will lower, even eliminate your utility bill. However these system will not supply you with power when the utility is down. SMA america has come up with a solution - SUNNY ISLAND. This inverter will work in conjunction with simple utility interface systems, generators, wind machines or any other power source to supply you power when the grid goes down. For more information on this inverter go to www.sma-america.com or call us toll free at 1-888-228-9694 for more details.

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