California Solar Incentive Program Handbook

Pacific Power California Solar Incentive Program Handbook Feb. 2012

Contents 1. Introduction: Pacific Power CA Solar Incentive Program (PPCSIP)... 1 1.1. Program Overview... 1 1.2. Program Targets, Incentive Levels and Budget... 3 2. PPCSIP Rules and Requirements... 4 2.1. Participant Classifications... 4 2.1.1. Applicant... 4 2.1.2. Host Customer... 4 2.1.3. System Owner... 4 2.1.4. Contractor... 5 2.1.4.1. Suspended License Contractor... 5 2.1.5. General Eligibility Guidelines... 7 2.2. System Equipment Eligibility... 7 2.2.1. New Equipment, Not Pilot or Demonstration Systems... 7 2.2.2. Equipment Must Serve On Site Electrical Load... 8 2.2.4. System Sizing Based on Future Load Growth... 9 2.3. Energy Efficiency Requirements... 10 2.3.1 EE Audit and EE Agreement for Residential and Nonresidential Retrofit... 10 2.3.1.1. Additional EE Requirements for Nonresidential Retrofit Buildings with Conditioned Floor Area 100,000 sq. ft.... 10 2.3.2. Exemptions for Existing Commercial Buildings... 11 2.3.3. Energy Efficiency Requirements for New Construction Residential and Nonresidential Projects... 12 2.4. Warranty Requirements... 12 2.4.1. Performance and Permanency Requirements... 13 2.5 Metering Requirements... 15 2.6. Measurement and Evaluation Requirements... 15 3. PPCSIP Incentive Structure... 15 3.1. PPCSIP Incentive Trigger Mechanism... 16 3.2. Expected Performance Based Incentive (EPBI)... 17 3.2.1. EPBI Calculator Modifications... 17 3.2.2. Incentives for Residential Installations... 17 3.2.3. Incentives for Nonresidential Installations... 17 3.2.4. Incentive Limitations... 18 3.2.4.1. Total Eligible Project Costs... 18 3.2.4.2. Reportable Project Costs... 19 3.2.4.3. Other Incentives or Rebates... 20 3.2.4.4. Right to Audit Final Project Costs... 20

3.2.4.5. Site and Host Customer Limitations... 21 4. Application Process... 22 4.1. 2 & 3 Step Application Processes... 22 4.2. Application Deposit... 24 4.2.1. Failure to Submit Application Deposit... 24 4.2.2. Forfeit of Application Deposit... 24 4.3. Review of Application Package... 25 4.3.1. Incomplete Application Packages... 25 4.3.2. Approval of Reservation Application Package... 26 4.4. Reservation Period for PPCSIP Projects... 26 4.4.1. Reservation Period for Commercial Projects... 26 4.4.2. Reservation Period for Government, Non Profit and Public Entity Projects... 26 4.5. 2 Step Application Process... 27 4.5.1. Step # 1: Submit Application Package... 27 4.5.2. Step # 2: Submit Incentive Claim Form Package... 28 4.6. 3 Step Application Process... 28 4.6.1. Step # 1: Submit Application Package... 28 4.6.2. Step # 2: Submit Proof of Project Milestone Package... 29 4.6.3. Step # 3: Submit Incentive Claim Form Package... 29 4.7. Changes to Reservations... 30 4.7.1. Withdrawal... 30 4.7.2. Extending the Reservation Expiration Date... 30 4.7.3. Transfer of Reservation from One Site to Another... 31 4.8. Incentive Payment Process... 32 4.8.1. Incomplete Incentive Claim Form Packages... 32 4.8.2. Incentive Check Payment and Terms... 33 4.8.3. Expected Performance Based Incentive (EPBI) Payment Terms... 33 4.8.4. System Changes Affecting Incentive Amount... 33 4.9. Field Inspections... 33 4.9.1. Key Project Components Reviewed During Onsite Field Inspection... 34 4.9.2. Acceptable Range of Parameters for Key Project Components Reviewed During Inspection... 35 4.9.3. Issuance of Infractions... 35 4.9.4. Issuance of Failures... 36 4.10. Notifications, Sanctions and Dispute Resolution... 36 4.10.1. Grounds for Immediate Disqualification from the Program... 37 4.10.2. Notifications and Sanctions... 37 4.11. Process for Removal from Program... 37 4.11.1. Removal from Program for Excessive Failures... 37 4.11.2. Removal from Program for Immediate Disqualification... 38 4.11.3. Dispute Resolution... 38

5. Application Forms and Documentation... 38 5.1. Reservation Application Package... 39 5.1.1. Reservation Application Form with Signatures and Proof of Electric Utility Service for the Site... 39 5.1.2. Proof of at least 15% above Title 24 Standards (new construction)... 39 5.1.3. Documentation of an Energy Efficiency Audit... 39 5.1.4. Copy of signed Energy Efficiency Agreement Form... 39 5.1.5. Copy of signed Commitment Agreement (Nonresidential Retrofit Buildings 100,000 sq. ft. and Benchmarking < 75)... 39 5.1.6. Printout of EPBI Tool Calculation... 40 5.1.7. Copy of New Construction Building Permit... 40 5.1.8. Building Site Plan... 40 5.1.9. Copy of Executed Agreement of Solar Energy System Purchase and Installation... 40 5.1.10. Copy of Executed Alternative System Ownership Agreement (If System Owner is Different from Host Customer)... 41 5.1.11. Application Deposit... 41 5.1.12. Certification of Tax exempt Status and AB1407 Compliance... 41 5.2. Proof of Project Milestone Package (3 Step Process)... 42 5.2.1. Copy of Executed Agreement of Solar Energy System Purchase and Installation... 42 5.2.2. Copy of Executed Alternative System Ownership Agreement (If System Owner is Different from Host Customer)... 42 5.2.3. Printout of EPBI Tool Calculation (If applicable)... 42 5.3. Incentive Claim Form Package... 42 5.3.1. Complete Incentive Claim Form with Signatures... 42 5.3.2. Printout of EPBI Tool Calculation (If applicable)... 43 5.3.3. PMRS... 43 5.3.4. Copy of Retro commissioning Report Agreement... 43 5.4. Circumstances Requiring Additional Documentation... 43 5.4.1. Owner or Self Installed System... 43 5.4.2. Contractor Installed System with Separate Seller and Solar Contractor... 43 Technical Section... 45 6. Metering Requirements... 45 6.1. PMRS Service Requirement... 45 6.1.1. Minimum Communication Requirements... 45 6.1.2. Data Privacy... 45 6.1.3. Minimum PMRS requirements... 46 6.2. Minimum Metering Equipment Requirements... 46 6.2.1. Meter Type... 46 6.2.1.1 Meters for Systems <30kW... 46 6.2.1.2. Meters for Systems 30kW... 47 6.2.2. Meter Accuracy... 47 6.2.3. Meter Measurement and Time Granularity of Acquired Data... 47

6.2.4. Meter Communication / Data Transfer Protocols... 47 6.2.5. Meter Display... 48 6.2.6. Meter Memory and Storage... 48 7. Equipment Certification, Rating Criteria & Design Factor Calculations... 48 7.1. Equipment Certifications and Rating Criteria... 48 7.2. Expected Performance Based Incentive (EPBI) Calculation... 49 Appendices... 51 Appendix A: Definitions... 51 Appendix B: Additional Requirements and Terms... 64

1. Introduction: Pacific Power CA Solar Incentive Program (PPCSIP) Pacific Power s California Solar Incentive Program (PPCSIP) provides financial rebates for the installation of grid-interconnected eligible solar photovoltaic (PV) systems. This Handbook describes the requirements to receive incentives for installations conducted within Pacific Power s electric service territory. The goal of the Program is to contribute to the growth and sustainability of the solar industry in California. Pacific Power s goals include the addition of 3.542 MW of new PV generation capacity for customers in the northern California service territory. In addition to the renewable energy generation component, the Program leverages the effectiveness of energy efficiency measures. Incentives will be available July 1, 2011 through July 1, 2015, or until the PPCSIP incentive budget has been fully reserved, whichever comes first. 1.1. Program Overview Pacific Power s California Solar Incentive Program rebates are available to qualified residential, commercial, industrial, government and irrigation customers for solar photovoltaic systems on both new and existing structures. For all projects, the expected performance of the system, as well as the design and installation of the system, will determine the incentive amount. 1 Pursuant to the California Public Utilities Commission Decision (D.11-03-007), PPCSIP incorporates many elements of the California Solar Initiative (CSI) program, 2 but will deviate in certain aspects to provide a cost effective program suited to the characteristics of Pacific Power s unique customer base. In this Handbook, significant differences between the Pacific Power California Solar Incentive Program and the California Solar Initiative are highlighted in grey. 3 1 Expected performance is the anticipated electrical generation over the life of the system and depends on equipment specifications including efficiency. 2 The California Solar Initiative program pays incentives to solar photovoltaic (PV) projects in the three California IOU service territories: Pacific Gas & Electric, Southern CA Edison and San Diego Gas & Electric. The program was authorized by the California Public Utilities Commission (CPUC) and Senate Bill 1 (SB 1) with a goal to install 1,940 MW of new solar generating capacity in California by 2016. 3 Additionally, a list of the variances between the two programs may be found in Exhibit C of the Supplement to Application of PacifiCorp (U 901 E) for Approval to Implement a Solar Incentive Program, Application No. 10-03- 002, filed June 11, 2010. 1

PPCSIP will consult the CSI Program Handbook for any issues not addressed in this document. If the stipulations of the CSI Handbook is not addressed or not suitable for PPCSIP program, then the Program Administrator will act under advisement of the CPUC and, if applicable, the CSI Program Administrators. All systems will be paid an upfront rebate calculated by an Expected Performance Based Incentive (EPBI) Calculator once the system is installed, operational and has met all program requirements. The EPBI incentives are paid based on verified solar energy system characteristics such as location, system size, shading, and orientation. To qualify for an incentive, both the building and the installed PV system must meet the following program requirements included in this Handbook: The building must receive retail electricity distribution service at the site of installation from Pacific Power. The solar electric system must be at least 1kW CEC-AC and will be incentivized up to 250kW CEC-AC. The solar electric system must be interconnected to the utility distribution grid and generate electricity to offset the end-use consumer s on-site electrical load. The PV system must remain interconnected to the distribution grid. The solar electric system must be located on the same premises of the enduse consumer where the consumer s own electrical demand is located. The solar electric system must use new certified components that have not been previously placed in service and are on the California Energy Commission s list of eligible equipment. The solar electric system must include a 10 year warranty to protect against defects and undue degradation of electrical output. The solar electric system must be installed and verified as specified in this Handbook. New residential and commercial buildings must achieve energy efficiency levels substantially greater than the requirements of the current Building Energy Efficiency Standards, 4 Title 24, Part 6, also known as Title 24. Pacific Power places great importance on ensuring that homes and buildings which qualify for incentives under PPCSIP are energy efficient. 4 These Standards are specified in the California Code of Regulations, Title 24, Part 6, commencing with Section 100. 2

Existing buildings are also subject to energy efficiency measures. The minimal energy efficiency requirements include an energy audit or proof of Title 24 compliance, efficiency upgrades, and potential commitments to enact the upgrades. For large building projects, retro-commissioning may also be required. 1.2. Program Targets, Incentive Levels and Budget Table 1: Adopted Incentive Structure, Capacity Allocations and Budget per Step 5 Table 1 shows the kw targets for each customer sector by step. Customer segments include residential and nonresidential (commercial, government, and non-profit). For the purposes of the PPCSIP, the commercial segment includes agricultural and industrial customers. The incentive levels available through the PPCSIP are divided into 7 steps. Each step is for a targeted amount of kw. The incentive levels available reduce automatically over the duration of the program based on the kw volume of solar reservations issued. Projects are counted toward the kw goals once they are deemed eligible and either, submit a request to reserve incentive funds or proceed with the installation and request incentive dollars once the project is completed. Additionally, incentive levels may differ for residential and nonresidential customer sectors based on the demand by each. The most current status of applicable incentive levels available in the Pacific Power territory will be available on the PPCSIP website, www.pacificpowercasolar.com. 5 Pursuant to California Public Utilities Commission Decision (D-11-03-007) 3

The total PPCSIP budget for four years is $4,253,256. $694,650 is earmarked for costs associated with administration of the program and $3,558,606 is allocated to incentives. 2. PPCSIP Rules and Requirements Any retail electric distribution customer of Pacific Power is eligible to install a solar energy system and receive incentives from the PPCSIP. Eligible participants in the PPCSIP must be current electric distribution customers of Pacific Power at the facility or project site where the system will be installed. Within the nomenclature of the PPCSIP, the person who applies for an incentive is referred to as the Applicant. Most often, but not always, the Applicant is either the Host Customer or the installation Contractor. Other participants and designations include System Owner, Third-Party Owner, Third-Party Lessor and Equipment Seller. 2.1. Participant Classifications 2.1.1. Applicant The Applicant completes and submits the PPCSIP application and serves as the main contact for the Program Administrator throughout the application process. Host Customers may act as the Applicant or they may designate another party to act as the Applicant on their behalf such as, but not limited to, engineering firms, solar contractor, equipment distributors, energy service companies (ESCO) and equipment Lessors. 2.1.2. Host Customer The Host Customer is the incentive reservation holder. The Host Customer alone will retain sole rights to the incentive reservation and corresponding incentive reservation number. Therefore, the Host Customer shall be party to the PPCSIP participation contract stated on the Reservation and Incentive Claim documents. The Host Customer has the right to designate the Applicant, energy services provider and/or Solar Contractor to act on their behalf. In addition, the Host Customer has the right to change these parties at any given time with prior written notice to the Program Administrator. 2.1.3. System Owner The System Owner is the owner of the generating equipment at the time the incentive is paid. For example, when a vendor sells the solar generating equipment and installation (generally defined as a turnkey system ) to a Host Customer, the Host Customer is the System Owner. In the case of a third-party-owned system (or leased system, for example), the third party (or Lessor) is the System Owner. 4

The System Owner should be designated on the Reservation Application Form, if known at that time, and on the Incentive Claim Form. If different from the Host Customer, the System Owner shall also be a party to the PPCSIP participation contract. The Program Administrator will require documentation substantiating equipment ownership. 2.1.4. Contractor Except for those systems that are self-installed, all systems must be installed by appropriately licensed California contractors in accordance with rules and regulations adopted by the State of California Contractors State License Board (CSLB). Solar installation contractors must have an active A, B, C-10, or a C-46 license in order to install photovoltaic (PV) systems. Systems must be installed in conformance with the manufacturers specifications and with all applicable electrical and building codes and standards. The Program Administrator will verify that the Solar Contractor has an active license with the California Contractors State License Board (CSLB), in accordance with the above requirement, during application review process. Self-installed systems are allowed to participate in the PPCSIP and should specify this on the Reservation Application Form. 2.1.4.1. Suspended License Contractor If it is determined that a contractor s CSLB license is suspended during the application or claim process the following will occur: Reservations will not be confirmed and all applications associated with the contractor will be suspended; No incentive payment will be made unless the system was interconnected prior to the suspension; All parties identified on the application will be notified of the suspension; If the system has not yet been installed, the Host Customer will be able to hire a new contractor without losing its current incentive reservation and apply for an extension, if necessary. Upon project completion, the incentive payment will be made only directly to the Host Customer and not any other third-party. If it is determined that an Applicant, System Owner, Seller, and/or Host Customer is suspended from the program, the Program Administrator will notify all parties involved in the application of the suspension. The Program Administrator will determine whether the project can be paid incentives or whether the project is 5

ineligible to be paid incentives. If the project is deemed to be payable, the Program Administrator, in most cases, will only pay the Host Customer for the project. 6

2.1.5. General Eligibility Guidelines The following customer segments and associated project sizes are generally used to determine incentive types, application processes and program eligibility: Residential: All project sizes up to 250kW (CEC-AC), retrofit and new construction designated by a Residential rate schedule. Non-residential: All commercial, government, non-profit, agriculture and industrial project sizes up to 250 kw (CEC-AC), retrofit and new construction projects, designated by a Commercial or Agriculture rate schedule 6. The following are not eligible for incentives: Customers who have entered into utility contracts for distributed generation (DG) services (e.g., DG installed as a distribution upgrade or replacement deferral) and who are receiving payment for those services. This does not include third-party ownership arrangements, i.e., power purchase agreements, which are allowed. Customers who have entered into agreements that entail the export and sale of electricity from the Host Customer Site. This does not include net energy metering agreements, which are allowed. Customers who have received a final interconnection authorization letter more than 12 months prior to submitting the energy audit for eligibility consideration. Publicly-owned or investor-owned gas, electricity distribution utilities or any electrical corporation (ref. Public Utility Code 218) that generates or purchases electricity or natural gas for wholesale or retail sales. 2.2. System Equipment Eligibility Solar PV systems (i.e., systems that cause direct conversion of sunlight to electricity) are the only technology to receive incentives through the PPCSIP 7. Details of the eligibility requirements for generation system equipment follow. 2.2.1. New Equipment, Not Pilot or Demonstration Systems All major system components (panels and inverters) must not have been previously placed in service in any other location or for any other application. Rebuilt, refurbished, or relocated equipment is not eligible to receive incentives. 6 Pursuant to California Public Utilities Commission Decision (D-11-03-007), Section 5.3 7 Pursuant to California Public Utilities Commission Decision (D-11-03-007), Non-PV systems, including solar hot water systems are not eligible to participate in the PPCSIP 7

Components that are critical to PV systems must have at least one year of documented commercial availability to be eligible for PPCSIP. Commercially available means that the major solar energy system components are acquired through conventional procurement channels, installed and operational at a Project Site. Ineligible equipment includes field demonstrations or completely paid for by research and development funds. Pilot and demonstration systems are ineligible for PPCSIP. Components that are enhancements to existing products and new models of existing product lines do not have to meet the commercial availability requirement as long as they are UL-certified and performance data exists to allow the Program Administrator to estimate their expected performance. An alternative method of seeking eligibility for solar energy systems that use new technologies is to obtain certification from a nationally recognized testing laboratory indicating that the technology meets the safety and/or performance requirements of a nationally recognized standard. System component ratings must also be certified by the California Energy Commission. New panels added to an existing inverter that is already in service are eligible to receive an incentive if the previously installed solar generating system received a rebate from the PPCSIP. 2.2.2. Equipment Must Serve On-Site Electrical Load For purposes of the PPCSIP, the system must be sized so that the annual expected generation produced by the system does not exceed the Host Customer s previous 12-month energy consumption at the Project Site. To further support customer adoption of energy efficiency, for systems over 5kW, the incentive is capped at 90% of the Host Customer s prior 12 months of electricity consumption at the Project Site 8. For systems 5kW or less substantiation is not required with the submittal of the initial application. For residential systems less than 10kW where historical electrical load cannot be determined due to extensive remodeling, on-site electrical load may be determined using the calculation of 2 watts per square foot. 8 Pursuant to California Public Utilities Commission Decision (D-11-03-007), Section 4.7 8

2.2.3. System Size The minimum system size eligible for an incentive is 1kW CEC-AC. The maximum incentive provided for a Host Customer Site under the PPCSIP is 250 kw CEC-AC 9 ; however, a Host Customer Site may elect to install up to 5 MW of generation. For all systems, the system size must be calculated using the CEC-AC rating standards, 10 including inverter DC-to-AC losses. To calculate the CEC-AC rating, the following formula should be used: System Size Rating (kw) = Quantity of Photovoltaic Modules x CEC PTC Rating of Photovoltaic Modules x CEC Inverter Efficiency Rating/ 1000. PPCSIP Rating is the system size rating that the PPCSIP incentive will be based upon. It is calculated as follows: Design Factor for the system x Maximum Eligible System Size. 2.2.4. System Sizing Based on Future Load Growth In the case of Host Customers with new or expanded sites with no electric bill history or where the existing electric bill does not reflect the Customer s expected expanded consumption, the Applicant must include an estimate of the expected expanded consumption. An engineering estimate is preferred. The engineering estimate must include the appropriate substantiation of the forecast of the Host Customer Site s annual energy use (in kwh) if the generating system size is based on future load growth, including new construction, load growth due to site expansion or other load growth circumstances. 9 Pursuant to California Public Utilities Commission Decision (D-11-03-007), Section 5.3 10 CEC-AC is a standard for a rating a system s power that is based upon 1,000 watt/m solar irradiance, 20 C ambient temperature, and 1 meter/second wind speed. The CEC-AC watt rating is lower than the Standard Test Conditions (STC), a watt rating used by manufacturers. 9

2.3. Energy-Efficiency Requirements 2.3.1 EE Audit and EE Agreement for Residential and Nonresidential Retrofit An energy audit is required for all existing residential and commercial buildings to receive an incentive. Residential Applicants may use the Home Energy Saver 11 online tool or have a third party qualified inspector conduct an onsite audit to fulfill the requirement. The output results, at minimum, must include: Yearly Energy Costs Yearly Whole House Results Upgrade Recommendations Summary For Nonresidential Applicants, acceptable audit protocols consist of the online Pacific Power Energy Audit 12, telephone audit, or an onsite audit provided by Pacific Power or a qualified third party within the last three years. Applicants are responsible for submitting a copy of the completed Energy Efficiency Audit results with a signed Energy Efficiency Disclosure Agreement Form to the Program Administrator. The Energy Efficiency Disclosure Agreement Form is a form provided by the Program Administrator that must be signed and completed by the Host Customer. By signing the document, the Host Customer authorizes the Program Administrator to access Host Customer energy consumption data, acknowledges awareness of energy efficiency tools and programs made available by the utility and lists any energy efficiency measures completed or intended to be completed before solar installation. 13 2.3.1.1. Additional EE Requirements for Nonresidential Retrofit Buildings with Conditioned Floor Area 100,000 sq. ft. In addition to the Energy Efficiency Audit and Energy Efficiency Disclosure Agreement Form requirements described above, the energy use intensity (EUI) shall be benchmarked 14 using ENERGY STAR Portfolio Manager 15 or the equivalent for existing commercial buildings with conditioned floor area of 100,000 square feet or larger. Proof of benchmarking must be submitted to the Program Administrator. 11 http://hes.lbl.gov/consumer/ 12 Facilities Assessment Wizard http://members.questline.com/facilityassessment.aspx 13 For PPCSIP purposes the form combines the CSI EE Disclosure form with the Authorization to Access Customer Information form. 14 Benchmarking is a process that compares the energy use of the building to the energy use of a population of similar buildings. 15 For more information can be found on the EPA s website: http://www.energystar.gov/index.cfm?c=evaluate_performance.bus_portfoliomanager_benchmarking 10

Retro-commissioning is required if these existing commercial buildings have a benchmark rating of less than 75. If this is the case, a Commitment Agreement, provided by the Program Administrator, which states energy efficiency measures that will be applied to the building, must be completed and signed by the Host Customer. The Agreement will indicate when the retro-commissioning will begin and be completed, and commit the Host Customer to complete equipment adjustments, or cost-effective efficiency improvements identified in the retrocommissioning assessment. Retro-commissioning is required to be completed before the incentive payment is made. If required, the Retro-commissioning report will need to be submitted with the Incentive Claim Form. Systems to be retro-commissioned include but are not limited to: Heating, ventilation, and air conditioning systems and controls. Lighting systems and controls. Day lighting systems and controls. Domestic hot water systems and controls. Renewable energy systems and associated equipment and controls. Process equipment and appliances specific to hospital, restaurant, and hotel/motel operations. Refrigeration in supermarket and refrigerated warehouses. After cost-effective energy efficiency measures are implemented to improve a buildings rating to exceed 75, further energy efficiency measures are not required. A building does not need to be re-benchmarked to receive an incentive. If equipment/appliance replacement is recommended during the retro-commissioning process, the replacement shall be made with ENERGY STAR equipment or appliances, or equipment or appliances that qualify for utility energy efficiency incentives, whichever is more efficient. 2.3.2. Exemptions for Existing Commercial Buildings For an existing commercial building, the energy efficiency requirements need not be met for the following: Agricultural and industrial facilities which are not covered by Portfolio Manager or the California Energy Commission s equivalent benchmark ratings are not required to be benchmarked. Energy efficiency audit is not required to be addressed when solar energy systems are not serving electricity to a building. 11

The energy efficiency audit, benchmarking and retro-commissioning are not required for buildings that have complied with Title 24 requirements for newly constructed buildings during the last 12 months prior to applying for the solar energy incentive; proof of Title 24 compliance shall be included with the incentive application. Retro-commissioning is not required for existing commercial buildings that have a current ENERGY STAR label. 2.3.3. Energy Efficiency Requirements for New Construction Residential and Nonresidential Projects All new construction residential and nonresidential projects must achieve energy efficiency levels beyond Title 24 Standards. Participating new construction buildings are required to meet at least 15% better than 2008 Title 24 Standards, which means there is a 15% reduction in the residential building s combined space heating, cooling and water heating energy compared to the 2008 Title 24 Standards. Compliance documents used to demonstrate Title 24 compliance include the PERF-1 form which shall be provided as proof of attainment of the requirement. 2.4. Warranty Requirements All solar energy systems that receive an incentive must have a warranty of no less than 10 years to protect against defects and undue degradation of electrical generation output. All solar energy equipment for electricity generation (PV modules, inverters, solar collectors, tracking mechanisms, heat exchangers, pumps, and heat driven cooling systems) shall have a minimum 10-year manufacturer performance warranty to protect against degradation of electrical generation output of more than 15% from their originally rated electrical output. All contractors shall provide a minimum 10-year warranty to provide for nocost repair and replacement of the system for any expenses not otherwise covered by the manufacturer. All contractors shall provide a minimum 10-year warranty to protect the purchaser against more than a 15% degradation of electrical generation output that may occur as a result of faulty installation. For self-installed systems, the warranty need not cover the labor costs associated with removing or replacing major components because any repairs would be done by the self-installer or at the self-installer s expense. 12

Meters must have a one-year warranty to ensure against defective workmanship, system or component breakdown, or degradation in electrical output of more than fifteen percent from their originally rated electrical output during the warranty period. For meters that are integrated into the inverter, the meter warranty period must be 10 years. 2.4.1. Performance and Permanency Requirements Equipment installed under the PPCSIP is intended to be in place for the duration of its useful life. Only permanently installed systems are eligible for PPCSIP incentives. Physical permanence is to be demonstrated in accordance with industry practice for permanently installed equipment. Equipment must be secured to a permanent surface. Any indication of portability, including but not limited to temporary structures, quick disconnects, unsecured equipment, wheels, carrying handles, dolly, trailer, or platform, will deem the system ineligible. The PPCSIP will allow the installation of approved hinge release technology if required by local building and permitting agencies to maintain the integrity of the solar system while also satisfying the program requirement of permanent installations. In rare occasions, there may be extenuating circumstances that warrant equipment relocation. System Owners who have received an EPBI and have relocated their system must orient their relocated equipment to produce at least the same generation as their initial EPBI payment was based upon. Contractual permanence corresponding to a period of 10 years is to be demonstrated as follows: All agreements involving the solar energy system receiving an incentive are to be provided to the Program Administrator for review as soon as they become available, but at the Proof of Project Milestones stage or the Incentive Claim stage at the latest. These agreements include, but are not limited to, system purchase and installation agreements, warranties, leases, energy or solar services agreements, energy savings guarantees, and system performance guarantees. The System Owner agrees to notify the Program Administrator in writing a minimum of 60 days prior to any change in either the site location of the solar energy system or change in ownership of the generation system if the change(s) takes place within the applicable warranty period. The warranty period for the PPCSIP is 10 years. If the solar energy system is removed prior to end of the 10 year warranty period, either: 13

o The solar energy system may be installed at another site within the same service territory within six months. The relocated system installed at the alternate site would not be eligible for an additional incentive; or o The System Owner would be unable to participate in the Program for any additional installations under the PPCSIP, including any active reservations that have not yet been paid. o A mandatory Site inspection is required for all relocated equipment. o Failure to re-install the solar energy system within 6 months will result in the return of the EPBI payment. All solar electric generating systems receiving incentives under the PPCSIP must be connected to the Pacific Power s distribution system. Disconnecting from the distribution system will result in the return of the EPBI payment. The system interconnection, operation and metering requirements for solar energy systems shall be in accordance with Pacific Power utility rules for customer generating facility interconnections. To connect a solar energy system to the utility distribution system, Host Customers, and/or System Owners will be required to execute certain documents such as, but not limited to, an Application to Interconnect a Generating Facility and a Generating Facility Interconnection Agreement or Net Energy Metering (NEM) Agreement with Pacific Power. Proof of interconnection and parallel operation is required prior to receiving an incentive payment. Pacific Power will convey proof of interconnection to the Program Administrator. Incentive payments will not be made until the Program Administrator confirms that the solar system has been interconnected and all the metering requirements have been met. A Host Customer is not eligible for a PPCSIP incentive if the solar electric generating system has been interconnected for more than 12 months. 14

2.5 Metering Requirements The Program requires accurate energy production meters for all projects that receive incentives. Accurate measurement of solar energy output is of paramount importance to ensure optimum value for both solar owners and ratepayers. For solar electric generating systems smaller than 30 kw, Pacific Power will install a meter capable of measuring non-interval system generation; however, the installation must include a utility meter socket installed at the expense of the Host Customer or System Owner 16. For Systems 30kW and above, the Host Customer or System Owner must provide the necessary metering to measure system generation in 15 minute intervals with the ability to provide the meter data to the Program Administrator 17. All participants must provide Program Administrator or their authorized agents with physical access to the meter for testing, monthly meter readings and /or inspection and if applicable, data gathering. To avoid inconvenience to customers, installation Contractors are encouraged to locate meters in areas that are easily accessible and not enclosed or locked in storage units or garages. 2.6. Measurement and Evaluation Requirements To be eligible for incentives, all Applicants, Host Customers, and System Owners must agree to comply with the terms and requirements of the measurement and evaluation program. This includes providing access to the Program Administrator and/or third parties contracted by the CPUC and/or Program Administrator access to the site and any available data and information collected on the system. The Host Customer and System Owner shall agree to allow all information provided as part of the reservation process to be entered into a database that will permit tracking of applications for this and other incentive programs. Access to this database will be limited to Pacific Power, the Program Administrator and the California Public Utilities Commission. 3. PPCSIP Incentive Structure PPCSIP provides an Expected Performance-Based Incentive (EPBI) using a specific dollar per watt amount. The incentive amount for each solar energy system is determined by analysis using the EPBI Calculator, and is paid when the solar 16 Pursuant to California Public Utilities Commission Decision (D-11-03-007). Section 4.10 17 Pursuant to California Public Utilities Commission Decision (D-11-03-007). Section 4.10 15

system has been installed, approved by the local building authority, interconnected and all program requirements have been met. 3.1. PPCSIP Incentive Trigger Mechanism The incentive payment levels will automatically be reduced over the duration of the Program in 7 steps, based on the volume of kw of confirmed reservations issued. The incentives are projected to decline at a rate of approximately 25 percent per each step following the start of implementation in July 2011. The incentives will gradually phase out over the 7 steps. The duration of that phase-out will be dependent on: (1) whether the incentive budgets are depleted; (2) when the Pacific Power reaches the kw goal; or (3) the end date of the Program (July 2015), whichever comes first. The Program Administrator will count a Project s PPCSIP Rating toward the step goals. Projects are counted toward the kw trigger once they are deemed eligible, have paid an application fee (if applicable), and have been issued a reservation. As the number of kw allocated through the confirmed reservations reaches its maximum within any particular step, the Program Administrator will move to the next step. If there are any kws that remain unused and unaccounted for in any previous steps, due to events such as Applicants dropping out of the process or reducing the size of their systems, those kws will be added to the current step under which the Program Administrator is issuing reservations, thus increasing the number in that step and ensuring that no kws are left outstanding. Similarly, when kws drop out of the current step, those kws will be returned to the current step. Any reallocation of kws from a higher step to a lower step due to dropouts or system size reductions can take place as long as the reallocation is consistent with how the kws were initially reserved for either residential or nonresidential projects. The Program Administrator will provide an incentive tracker on the PPCSIP website on a weekly basis to indicate the total kws available for incentives in the current step and in each customer segment. If during a step change, a project that is confirmed is greater than the kw amount remaining in the step, the project will receive a split incentive. The project will receive the rate for the kw remaining in the original step while the balance of system kw will receive the lower step incentive rate. A split incentive also applies to projects that increase from the size originally confirmed at one incentive rate. For these systems, the increase kw amount will be incentivized at the incentive step during incentive claim. 16

3.2. Expected Performance Based Incentive (EPBI) PPCSIP will pay incentives for all projects through an up-front incentive referred to as the Expected Performance Based Incentive. The EPBI is based on an estimate of the system's fully operational performance. EPBI combines the benefits of rewarding productive performance with the administrative simplicity of a one-time incentive paid at the time of project completion. For the purposes of PPCSIP, there are no Performance Based Incentives available. 18 The incentive rate customer segment (residential/nonresidential) will be determined by the utility rate schedule of the Host Customer. If the requested incentive rate differs from the classification of the Host Customer utility rate schedule, the Program Administrator may, at its discretion, allow the requested incentive rate given that the Host Customer change its utility rate schedule as applicable and prior to the respective incentive payment. The following formula determines the EPBI incentive: EPBI Incentive Payment = Confirmed Incentive Rate x Final PPCSIP Rating in kw. 3.2.1. EPBI Calculator Modifications Pacific Power has developed an EPBI calculator that helps customers determine the EPBI amount. As it gains experience with the EPBI and the performance of the statewide solar incentive programs, Pacific Power reserves the right to modify the calculator at any time without advance notice. 3.2.2. Incentives for Residential Installations Residential installations will be provided a one-time EPBI payment to help reduce the cost of installation provided the system output is within EPBI production eligibility limits. A Power Purchase Agreement on a residence is considered a residential application. 3.2.3. Incentives for Nonresidential Installations All Nonresidential installations will be provided a one-time EPBI payment to help reduce the cost of installation provided the system output is within EPBI production eligibility limits. Incentive rates vary by the System Owner s entity type (i.e., commercial entities or government or non-profit entities). The incentive amount will be determined by the tax status of the System Owner. Nonprofit entities will be required to submit verification of their tax-exempt status to receive the government/ non-profit incentive amount. Government and non- 18 Pursuant to California Public Utilities Commission Decision (D-11-03-007) 17

profit entities must include a notice under penalty of perjury from their chief financial officer or equivalent that they are a government or non-profit entity and that the system is not receiving and will not in the future receive federal tax benefits through financial arrangements for the entire warranty period of the system (i.e., the System Owner if a third-party, which will be receiving tax benefits from the system). The availability of the additional incentive for tax-exempt entities is limited to 10% of nonresidential capacity. 3.2.4. Incentive Limitations If the Project is installed as described on the Reservation Application package and all Program and Contract terms and conditions are complied with, including timely submission of all documents described in the Program Handbook, the Program Administrator will pay an incentive to the entity designated as the Payee. The Program Administrator reserves the right to modify or cancel the incentive if the actual installation of the solar energy system differs from the proposed installation, if the solar energy system fails inspection, if the solar energy system is not installed by the due date specified on the Reservation Confirmation and Incentive Claim Form, and/or if the documents submitted fail to meet the requirements of the Program Handbook. Incentive amounts and project eligibility for the PPCSIP are limited by a number of factors, including: Total eligible project costs Other incentives or rebates received Project kw system size and Host Customer Site limitations 3.2.4.1. Total Eligible Project Costs No Project can receive total incentives (incentives from the PPCSIP combined with other programs) that exceed total eligible project costs. The Applicant must submit project cost details to report total eligible project costs and to ensure that total incentives do not exceed out-of-pocket expenses for the System Owner. Total eligible project costs cover the solar energy system and its ancillary equipment. Equipment and other costs outside of the project envelope as listed below are considered ineligible project costs. For large, multifaceted projects where the solar energy system costs are embedded, applications must include a prorated estimate of the total eligible costs for the solar energy system. The following costs may be included in total eligible project cost: 1. Solar equipment capital costs, including tracking systems and other ancillary equipment associated with the solar energy system. 18

2. Engineering and design costs for solar energy systems. 3. Construction and installation costs. For projects in which the generation equipment is part of a larger project, only the construction and installation costs directly associated with the installation of the energy generating equipment are eligible. 4. Engineering feasibility study costs 5. Interconnection costs, if applicable, including: a. Electric grid interconnection application fees b. Metering costs associated with interconnection 6. Building permitting costs 7. Warranty and/or maintenance contract costs associated with eligible project cost equipment 8. Sales tax and use tax 9. On-site system measurement, monitoring and data acquisition equipment. 10.Customers may claim certain mounting surface costs as eligible project costs. Costs may include mounting surfaces for the photovoltaic module/solar collector and/or the materials that provide the primary support for the modules. Only the percentage of mounting surface directly under the photovoltaic module/solar collector is eligible. 11.Cost of capital included in the system price by the vendor, contractor or subcontractor (the entity that sells the system) is eligible if paid by the System Owner. In cases in which an installation contract encompasses all costs associated with the installation of a solar generating system and additional measures such as energy efficiency, other renewable generating technologies, etc., the contractor must delineate the costs for each measure separately in the agreement. 3.2.4.2. Reportable Project Costs All systems receiving an incentive are required to enter the costs identified below in the Incentive Claim Form Package: PV Module the cost for the number of modules installed Inverter the cost for the number of inverters installed Permitting Fees only include the cost of the permitting fees charged by the permitting agency (do not include any costs associated with time and labor in applying for permits) Balance of System (BOS) all other eligible costs associated with the installation of the PV System. 19

3.2.4.3. Other Incentives or Rebates For projects receiving incentives under other programs, the PPCSIP incentive may be reduced, depending on the source of the other incentive. For projects that receive other incentives for the same generating equipment that are funded by California investor-owned utility ratepayers (e.g., utility or California Energy Commission public goods charge programs), the PPCSIP incentive is discounted by the amount of the other incentive. For projects that receive other incentives funded from other sources than utility ratepayers (e.g., federal and state grants, air district grants or tax credits) no adjustment is made to the PPCSIP incentive, except where an incentive would otherwise cause total incentives to exceed total costs. In no event may the combined incentives received from the PPCSIP and other funding sources exceed the total eligible project cost. Host Customers, Applicants and System Owners are required to disclose information about all other incentives, including incentives for equipment or systems ancillary to the solar energy system, post-installation performance payments, or additional incentives. The Host Customer and System Owner understand that other program rebates, grants, forgiven loans, financial incentives, post-installation agreements, Renewable Energy Credits (RECs or Green Credits), and performance payments are other incentives and must be disclosed as soon as those agreements or payments are made. The Program Administrator will enter applications into a statewide database that will permit universal tracking of applications for this and other programs. 3.2.4.4. Right to Audit Final Project Costs The Program Administrator reserves the right to conduct spot checks to verify that Project-related payments were made as identified in the final invoices or agreements provided by equipment sellers and/or Solar Contractors. As part of these spot checks, the Program Administrator will require Applicants to submit copies of cancelled checks, credit card statements, or equivalent documentation to substantiate payments made to the equipment seller and/or Solar Contractor. The final amount legally incurred or paid to the equipment seller and/or the final amount paid to the Solar Contractor for the purchase and installation of the system must match the cost information identified in the Incentive Claim Form. To meet this requirement, the System Owner must submit final invoices and/or a copy of the final agreement, and cost documentation must provide sufficient information to identify clearly the equipment purchased and the labor paid. If there is no direct proof of actual payment from the System Owner to an appropriately licensed Solar Contractor or seller, the incentive will be cancelled or reduced. Applicants must explain the difference if the final amount paid by the Applicant is 20