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               CALIFORNIA SOLAR INITIATIVE


               PROGRAM
















               The following is a summary highlight of the California Solar Incentive (CSI) program,
               a detailed version of which is available on the CSI Web page at www.csi.com.
                  Beginning January 1, 2007, the state of California introduced solar rebate fund-
               ing for installation of photovoltaic power cogeneration that was authorized by the
               California Public Utilities Commission (CPUC) and the California Senate. The bill
               referenced as SB1 has allotted a budget of $2.167 billion that will be used over a
               10-year period.
                  The rebate funding program known as the California Solar Initiative (CSI) awards
               rebates on the basis of performance, unlike earlier programs that allotted rebates based
               on the calculated projection of system energy output. The new rebate award system
               categorizes solar power installation into two incentive groups. An incentive program
               referred to as Performance-Based Incentive (PBI) addresses photovoltaic installation
               of 100 kW or larger and provides rebate dollars based on the solar power cogenera-
               tion’s actual output over a 5-year period. Another rebate referred to as Expected
               Performance-Based Buydown (EPBB) is a one-time lump sum incentive payment pro-
               gram for solar power systems with performance capacities of less than 100 kW, which
               is a payment based on the system’s expected future performance.
                  Three major utility providers that service various state territories distribute and
               administer the CSI funds. The three main service providers that administer the pro-
               gram in California are:

               ■ Pacific Gas and Electric (PG&E), which serves northern California
               ■ Southern California Edison (SCE), which serves mid-California
               ■ San Diego Regional Energy Office (SDREO)/San Diego Gas and Electric (SDG&E)

                  Note that municipal electric utility customers are not eligible to receive the CSI
               funds from the three administrator agencies.


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