CSI-Thermal – Incentives

CSI-Thermal incentives are intended to encourage high-performing systems. Incentive amounts differ based on customers' system, class (e.g., residential or commercial) and water heating fuel source (e.g., gas or electric). Incentives are paid based on an expected annual energy displacement.

Incentive amounts will decline over eight years of the program in four separate steps starting from Step 1. Each step level contains a different incentive amount. The gas incentives steps will decline when the budget allocations for a given customer class are achieved. When those decline, the electric steps follow. See chart below.

For example, when PG&E receives $11.31 Million worth of residential gas applications, the incentive level for the residential customer class will drop to Step 2. At that time, the residential electric/propane step will also drop into Step 2. You can monitor program participation and current step levels.

Incentive Rate and Structure

Each step contains a specific incentive rate, incentive cap, and budget allocation. Please refer to the table below for the different steps and incentive rates. Steps decline independently by customer class and Program Administrator. When the budget allocations for the customer class of each step are fulfilled, the Program Administrator will drop to the next incentive step.

Gas Displacing Incentive Structure

StepCustomer Class$/Therm DisplacedMax IncentivePG&E Budget Allocation (Millions)
1Residential
Commercial/Multi-family
$18.59
$14.53
$2,719
$500,000
$11.31
$13.26
2Residential
Commercial/Multi-family
$13.11
$9.88
$1,919
$500,000
$8.97
$10.14
3Residential
Commercial/Multi-family
$7.69
$6.55
$1,125
$500,000
$7.02
$8.97
4Residential
Commercial/Multi-family
$3.23
$3.13
$475
$500,000
$4.29
$6.24

Electric/Propane Displacing Incentive Structure

Step Customer Class$/kWh DisplacedMax Incentive
1Residential
Commercial/Multi-family
$0.54
$0.42
$1,834
$250,000
2Residential
Commercial/Multi-family
$0.38
$0.29
$1,311
$250,000
3Residential
Commercial/Multi-family
$0.22
$0.19
$752
$250,000
4Residential
Commercial/Multi-family
$0.10
$0.09
$329
$250,000

Incentive Payments and Calculations

Incentive Payments may be issued to the customer, contractor, or a third party as long as is authorized by the system owner. If the system owner will not be the recipient of the incentive payment, it is mandatory that they receive a reduction of the project cost by equivalent amount of the incentive.

Single-family Residential

Incentives will be one lump sum payment after completion of the system's installation and will be based on estimated annual therm or kilowatt hour (kWh) displacement provided by the OG-300 Calculator.

All single-family residential customers must use the OG-300 Incentive Calculator. The calculator may be accessed using the public incentive calculator or during the application process.

There are four variables used in calculating the incentive for OG-300 systems:

  • Solar Rating and Certification Corporation (SRCC) or International Association of Plumbing and Mechanical Officials (IAPMO) estimated annual energy savings, based on the California Energy Commission (CEC) climate zone of the project site. For more information, visit the SRCC or the IAPMO.
  • Incentive Step Level indicated at the time the application is approved.
  • Surface Orientation Factor (SOF), which includes the azimuth and tilt of the collectors.
  • Shade factor based on the average annual availability of sunlight between the hours of 10:00 a.m. and 3:00 p.m. on the collector(s).

The formula to calculate the single-family residential incentive is:

(OG-300 estimated annual energy savings) x (Current Incentive Step Level) x (SOF) x (Shade Factor) = $ Incentive Amount.

Multi-family/Commercial ≤ 250 kWth

Incentives will be one lump sum payment after completion of the system's installation and will be based on estimated annual therm or kWh displacement provided by the OG-100 Calculator.

Multi-family/Commercial > 250 kWth

Incentives for systems of this size will be paid in two parts, called the 70/30 true-up method.

  1. 70 percent of the incentive is paid upon a system's completion based on the estimated annual therm or kWh displacement provided by the OG-100 Calculator.
  2. The customer must meter their system for 12 months to give an actual therm or kWh displacement. The remaining payment will be paid by subtracting the initial 70 percent incentive payment from the final incentive amount based on metered data. If the difference is positive, the Program Administrator pays no more than 110 percent of originally estimated incentive amount. If the difference is negative, the Program Administrator pays no true-up amount.

For example:

  • Customer's estimated energy savings is 12,000 therms per year based on the results of the OG-100 calculator.
  • The program is in Step 1 so the estimated incentive equates to a $174,360 (12,000 therms x $14.53).
  • Once the project is completed, approved and inspected (if applicable), the Program Administrator pays 70 percent of the $174,360, or $122,052.
  • Customer's energy savings is then measured for 12 months and is found to be 13,200 therms, making the final incentive $191,796 (13,200 therms x $14.53 per therm).
  • PA then pays true-up incentive payment of $69,744, which is $191,796 less $122,052 upfront lump sum incentive. [NOTE: Customer will not be paid more than 110 percent of the estimated incentive amount for systems that produce more than the estimated energy savings.

Surface Orientation Factor (SOF) Chart

Surface Orientation Factor Chart

Shade Factor

Contractors are required to conduct a shade analysis for each site to obtain the average annual availability of the solar collector(s) between the hours of 10:00 a.m. and 3:00 p.m.

For each percentage of average annual availability below 100 percent on the solar collector(s) between 10:00 a.m. and 3:00 p.m., there will be an equal percentage reduction in the system.

For example, if the shade analysis reveals a 95 percent average annual availability between 10:00 a.m. and 3:00 p.m., the program administrator will multiply the incentive amount by 95 percent and reduce the incentive by 5 percent. For the purposes of the CSI-Thermal Program the shade factor in this example would be 95 percent.