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How Do Solar Panels Work?

Solar panels are mounted on the ground or roof of your business and the sunlight that the solar panel receives is in the form of DC (Direct Current). The DC power is then routed to an inverter, which is mounted on the other side of your home or in your garage. The inverter converts DC power to AC power (Alternating Current) which is what is being sent by your utility company (SDG&E). From the inverter, power travels into your electrical panel. From there it is distributed through your home, for your refrigerator, television, microwave, etc. when you use electricity. When you produce more electricity then you are using, from your solar panels, the excess power will be sent to the utility company (SDG&E) and you will be credited. You will remain connected to the utility grid for when you need more power than you are producing with your solar array.




Why Go Solar?

A solar panel system for you business is a long term, low risk high return way to invest. A solar panel system offers an initial tax free annual return on investment of 4-10%.  Also as utility rates increase, the annual return increases. In addition to this direct return through utility savings, business owners can also expect their business and property value to increase.  Research shows that property resale value will increase $10-20.00 for every $1.00 saved annually in electricity.

Rebates & Incentive

A significant portion of the cost is paid through government incentives. The California Solar Initiative offers a rebate for commercial systems that covers 20 - 30% of the total system cost, and the Federal Government offers a $2,000.00 tax credit that further reduces the cost of the initial investment.

Solar Thermal Incentives

"The California Public Utilities Commission (CPUC) plans to offer $100 million in incentives over the next ten years for solar thermal technologies under the California Solar Initiative. State law (Senate Bill 1) limits California Solar Initiative incentives to electric-displacing technologies, such as absorption cooling. Currently, CSI program administrators are working with the CPUC to develop the underlying methodologies and future program design.

The San Diego Regional Energy Office (SDREO) will run a pilot incentive program for solar thermal technologies in the San Diego Gas & Electric Company (SDG&E) service territory. The 18-month, $2.2 million pilot is designed to provide rebates to residential and nonresidential customers of SDG&E who install qualifying solar water heating systems that offset energy used by an existing natural gas or electric water heater or boiler. The SDREO will provide financial incentives, and consumer information and education to overcome market barriers to solar water heating, such as high initial system costs, customer lack of information, and potential negative public perceptions of solar water heating technologies.

The California Solar Initiative will have more information on solar thermal incentives as it becomes available."




Energy Facts

Solar Thermal

  • Solar water heaters offered the largest potential savings, with solar water-heater owners saving as much as 50% to 85% annually on their utility bills over the cost of electric water heating.

  • You can expect a simple payback of 4 to 8 years on a well-designed and properly installed solar water heater. (Simple payback is the length of time required to recover your investment through reduced or avoided energy costs.)

  • Solar water heaters do not pollute. By investing in one, you will be avoiding carbon dioxide, nitrogen oxides, sulfur dioxide, and the other air pollution and wastes created when your utility generates power or you burn fuel to heat your household water. When a solar water heater replaces an electric water heater, the electricity displaced over 20 years represents more than 50 tons of avoided carbon dioxide emissions alone.


The California Solar Initiative

As part of Governor Arnold Schwarzenegger's $3.3 Billion, Million Solar Roofs Program, California has set a goal to create 3,000 megawatts (MW) of new, solar-produced electricity by 2017 - moving the state toward a cleaner energy future and helping lower the cost of solar systems for consumers.

  • The California Public Utilities Commission, through its California Solar Initiative, provides $2.2 Billion in incentives over the next decade for existing residential homes and existing and new commercial, industrial, and agricultural properties.

  • The California Energy Commission manages a 10-year, $400 million program to encourage solar in new home construction through its New Solar Homes Partnership.

  • Beginning January 2008, the Publicly Owned Utilities (POU) component of Senate Bill 1 requires each municipal utility to offer a solar incentive program to its customers. The POUs will be spending $784 million over 10 years, toward a goal of 660 MW.

The overall goal is to help build a self-sustaining photovoltaic, solar electricity market. The current program does not fund solar hot water systems.

The California Solar Initiative Offers:

  • Photovoltaic incentives starting at $2.50 per watt for systems up to one megawatt in size.

  • Higher incentives for solar installations for existing and new low-income and affordable housing.

  • A pay-for-performance incentive structure to reward high-performing solar projects.

The California Solar Initiative will be coordinated with the state's energy efficiency, "smart" metering, and building standards programs at the Public Utilities Commission and Energy Commission, ensuring that the state is using its energy resources wisely.

CPUC Administration of the California Solar Initiative

On March 2, 2006, the CPUC opened a proceeding to develop rules and procedures for the California Solar Initiative and to continue consideration of policies for the development of cost-effective, clean and reliable distributed generation (DG). On August 21, 2006, the Governor signed Senate Bill 1 (SB1), which directs the CPUC and the Energy Commission to implement the CSI program consistent with specific requirements and budget limits set forth in the legislation.

The PUC has a rulemaking (R. 08-03-008) to reconcile its decisions with SB1, and it also continues to hold public workshops to continue designing program elements. Contact the CPUC to learn how to provide your input in these decisions.

Current incentives provide an upfront, capacity-based payment for a new system. The CSI incentive system will change in 2007 when it moves to performance-based payments. In its August 24, 2006, decision, the CPUC shifted the program from volume-based to performance-based incentives and clarified many elements of the program's design and administration.

Source: GoSolarCalifornia

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California Energy Commission

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