A Performance Based Incentive (PBI) refers to a form of incentive contingent upon a solar system’s real-time energy output. Such incentives are typically disbursed according to an energy-based metric, expressed as dollars per kilowatt hour ($/kWh), over a specified duration. This approach contrasts with the traditional method of granting a one-time rebate on a per-kilowatt ($/kW) basis upon system installation. Feed-in tariffs (FIT) represent a prevalent example of a Performance-Based Incentive.
How do PBIs Work?
The functioning of Performance Based Incentives (PBIs) involves the implementation of metering technology to gauge the energy output of a solar system, with this data being relayed to the program administrator. A concrete illustration of a PBI implementation is the California Solar Initiative, where incentives are disbursed every month over a predetermined span of 5 years (totaling 60 payments). These payments are contingent upon the energy production, measured in kilowatt-hours (kWh), generated by the solar energy system. Maintaining a consistent incentive rate ($/kWh) is crucial throughout the contractual term.
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What is the Importance of PBIs to Solar Systems?
Performance Based Incentive (PBI) plays a vital role in the solar industry by offering a financial stimulus encouraging customers to adopt solar energy solutions. Primarily, PBIs drive installers and system owners to prioritize meticulous installation, regular maintenance, and optimal performance. This approach ensures the program rewards participants based on their system’s energy output.
Another key aspect of the importance of PBIs lies in their role in facilitating the equitable distribution of incentives. PBIs provide reassurance to policymakers and regulators that incentives are allocated appropriately. This way, Performance Based Incentives help prevent installers or system owners from improperly benefiting from incentives, thereby assuring stakeholders that these incentives effectively support the expansion of solar adoption.
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