California’s Public Utilities Commission (CPUC) has adopted performance based incentives for its a 10-year, $2.9 billion programme to promote the use of solar power.

Starting next year, solar systems above 100 kW will be able to benefit from performance related tariffs with incentive payments over the first five years of operation at $0.39/kWh of output for taxable entities, and $0.50/kWh of output for government/non-profit organisations.

For systems below 100 kW, incentives will be based on estimated future performance. Residential and small commercial systems will receive incentives of $2.50/W and will be eligible for additional federal tax credits, while government and non-profit organisations will receive $3.25/W but will not have access to the tax credit.

The decision marks the first phase of the California Solar Initiative adopted by the CPUC in January, to increase solar capacity in the state by 3 GW by 2017.

The programme will be managed by local distribution companies Pacific Gas and Electric Co, Southern California Edison, Southern California Gas Co, and the San Diego Regional Energy Office.

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