- Getting Started
- Adding Incentives
- Custom Incentives
- Solar Renewable Energy Credits (SRECs)
- Common Incentive Workarounds
Getting Started
In order to accurately model incentives, the energy consumption, site & system design, and pricing will need to be completed.
Adding Incentives
In order to view and add any incentives to your design, users can navigate to Sales Mode > Dollar sign icon > Incentives.
Admins can also configure incentives to be editable from within Sales Mode (see Custom Incentives below). For editable incentives, reps can edit the amount of the incentive from the Pricing page in Sales Mode.
Auto-Applied Incentives
Some incentives, like the Federal ITC, are applied to projects automatically.
If the design is considered “eligible” for the incentive based on certain criteria, then the incentive will be visible and toggled on.
If the design is considered “maybe eligible” – as in, more information is needed to make an accurate assessment – then the incentive will be visible, but not toggled on. For example, the Storage SGIP incentive can be applied for households below a certain income. For projects located in California, this incentive will be visible, but the user needs more information about the homeowners’ income before it can be applied.
If the design is considered “not eligible” for the incentive, it will not be visible. For example, Maryland incentives will not be visible for projects located in Oregon.
Manually-Applied Incentives
Click on Add Incentive to search for and apply any other incentives that are configured in the Database.
Custom incentives that have been configured by account admins will also be available in the same dropdown. For more information on configuring custom incentives, see the section below.
Custom Incentives
To model for any custom incentives, admins can navigate to Database > Incentives in new Aurora (V2).
Click on +New and give the incentive a name. Then, select the following:
- Type: This determines whether it is based on the build cost, system wattage, energy production, or a fixed amount.
- Scope: Select whether the incentive is issued at the national level or local level
- Tax Rates Applied: Check this box if the incentive is applied to income taxes
- Note: This is not selectable if Cost is selected as the Incentive Type
- Disbursement: Fields in this section will update dynamically based on the Type selected; fields may include a tax rebate %, system size & amount per watt, performance, and others.
All of the Incentive Types are broken out in the sections below.
Cost Based Incentives (CBIs)
CBIs are incentives that are calculated based on the system’s cost to the consumer.
For example, the Investment Tax Credit (ITC) is the most common CBI – set at 30% until 2033. If a homeowner’s total system cost is $40,000, then they would be able to receive a tax liability reduction of up to $12,000 (30% of $40,000) in year 1 after purchasing their system.
- Disbursement: This is set as Tax Credit/Rebate for CBIs and cannot be changed.
- Amount: The percentage of the system cost that is offset by this incentive.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode
- Capped?: Check this box if the incentive is capped at a certain amount.
- Cap: The maximum dollar amount that can be received from this incentive.
- Duration for cap: The number of years over which the cap is distributed.
Performance Based Incentives (PBIs)
PBIs are incentives that are calculated based on the system’s production. PBIs are applied as they are earned (i.e. as your system produces energy)
- Amount/Rate ($/kWh): The price per kWh that the customer will be compensated for the energy produced.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode.
- Escalation (%/year): Annual increase (or decrease) in the performance-based incentives rate.
- Duration (years): The amount of years this incentive is available to the customer.
- Disbursement Type: The method in which the incentive is paid out to the customer.
- Incremental: A disbursement type where the homeowner is paid out via small payments over time.
- Lump Sum: A disbursement type where the homeowner is paid out via a one-time payment.
- Amount paid to the homeowner: Percentage that is paid out to the homeowner in a lump sum.
System Size
For this incentive type, the configured amount is calculated as a $/variable-unit rate multiplied by the selected system size basis to determine the singular disbursement made in the specified year.
- Disbursement: This is set as Cash Grant and cannot be changed. All system sized incentives are issued as grants, which the customer may receive up-front or in a future year.
- System Size Based on: The current and rating which the system sized incentive is based on.
- DC, STC: STC, or Standard Test Conditions, is also known as “Nameplate Rating.” This is calculated as the wattage multiplied by the number of modules.
- DC, PTC: PTC, or Performance Test Conditions, refers to what panels produce under performance test conditions. This will be slightly less than STC.
- AC: This will be based on the total inverter power output of the design.
- Amount: The price per Watt that the customer will be compensated for the size of the system.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode.
- Capped?: Check this box if the incentive is capped at a certain amount.
- Cap Type: The maximum amount that can be received from this incentive.
- Flat: The maximum dollar amount that can be received.
- Percentage: The maximum percentage of the system cost that can be received.
- Both flat and percent: The maximum dollar amount or percentage that can be received – whichever comes first (is lower).
- Cap Type: The maximum amount that can be received from this incentive.
- Year Applied: The year that this incentive will be applied. Entering Year 0 will reduce the system cost immediately.
Fixed Amount
For this incentive type, the configured amount is appalled as the total, singular disbursement made in the specified year. Thus, the itemized value is the same as the configured amount.
- Disbursement: This is set as Cash Grant and cannot be changed.
- Amount: Fixed Amount incentives are issued as grants, which the customer may receive upfront or in a future year.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode
- Year Applied: The year that this incentive will be applied. Entering Year 0 will reduce the system cost immediately.
Storage System Size Incentives
These incentives are given out by either utility companies or government mandates to encourage the adoption of storage in their areas. The payout for these incentives is a single lump sum and can be based on either battery capacity (measured in kWh) or battery output power (measured in kW).
Typically, no long-term commitment is required to qualify for an incentive like this. The incentive giving body may have other qualification requirements, such as requiring users to install batteries from an approved list, or that the user also install other energy-efficient home upgrades to qualify for the incentive.
If this incentive comes from a governmental body, it may come in the form of a Tax Credit instead of a direct cash payment.
- Disbursement: This is set as Cash Grant and cannot be changed. All system sized incentives are issued as grants, which the customer may receive up-front or in a future year.
- System Size Based on: The current and rating the system sized incentive is based on.
- Storage kWh (nominal)
- Storage kWh (usable)
- Storage kWh (ac)
- Storage kW (ac)
- Amount: The price per watt that the customer will be compensated for the size of the system.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode
- Capped?: Check this box if the incentive is capped at a certain amount.
- Cap Type: The maximum amount that can be received from this incentive.
- Flat: The maximum dollar amount that can be received.
- Percentage: The maximum percentage of the system cost that can be received.
- Both flat and percent: The maximum dollar amount or percentage that can be received – whichever comes first (is lower).
- Cap Type: The maximum amount that can be received from this incentive.
- Year Applied: The year that this incentive will be applied. Entering Year 0 will reduce the system cost immediately.
Storage SGIP
The “Self Generation Incentive Program” is a variant of the Storage System Size Incentive offered by the State of California with a different tapering-off structure. Payout is based on kWh battery capacity. Special bonus rates are given to users in low-income communities or in areas with significant grid stability issues.
- Disbursement: This is set as Cash Grant and cannot be changed. All system sized incentives are issued as grants, which the customer may receive up-front or in a future year.
- Rules Based on:
- General Market: X
- Equity / Equity and Resilience: X
- Amount: The price per Watt that the customer will be compensated for the size of the system.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode.
- Capped?: Check this box if the incentive is capped at a certain amount.
- Cap Type: The maximum amount that can be received from this incentive.
- Flat: The maximum dollar amount that can be received.
- Percentage: The maximum percentage of the system cost that can be received.
- Both flat and percent: The maximum dollar amount or percentage that can be received – whichever comes first.
- Cap Type: The maximum amount that can be received from this incentive.
- Year Applied: The year that this incentive will be applied. Entering Year 0 will reduce the system cost immediately.
Storage Demand Response
Also known as “BYOB” or “Bring Your Own Battery” incentives, these are typically offered by utility companies to customers in exchange for the ability to tap that customer’s batteries in times of high grid loads.
Typically, a customer will need to sign an agreement to participate and have their batteries connected to the grid at all times, for a number of years. In return, they’ll be guaranteed a yearly payment of a number of dollars per kW (output power) per year of connected battery power rating for the same term.
- Disbursement: This is set as Cash Grant and cannot be changed.
- System Size Based on: This is set as Storage kW (ac) and cannot be changed.
- Amount: The price per watt that will be compensated to the customer.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode.
Storage Fixed Amount
- Disbursement: This is set as Cash Grant and cannot be changed.
- Amount: Fixed Amount incentives are issued as grants, which the customer may receive upfront or in a future year.
- Allow amount to be editable?: This allows users to edit the incentive amount from within Sales Mode.
- Year Applied: The year that this incentive will be applied. Entering Year 0 will reduce the system cost immediately.
Solar Renewable Energy Credits (SRECs)
In SREC state markets, the Renewable Portfolio Standard (RPS) requires electricity suppliers to secure a portion of their electricity from solar. The SREC program provides a means for Solar Renewable Energy Credits (SRECs) to be created for every megawatt-hour of solar electricity created (1 SREC = 1 MWh of solar electricity).
Once a homeowner’s system is installed and registered, it starts producing electricity and the generation is monitored in a tracking system to create SRECs. The homeowner can sell those SRECs to aggregators (usually between $4-300, depending on the state), who then sell them to the utilities – helping them to meet their solar RPS requirement.
This is separate from net metering! Meaning that SRECs provide another way for homeowners to make money from their solar system in addition to saving on their electricity bills.
See this brief video (1:22) for more detail: What Are SRECs?
Modeling SRECs in Aurora
Some SREC programs, like other incentives, are already modeled for you in Aurora’s Database section. To apply these to your project in Sales Mode, navigate to the Pricing page > Incentives > then search for the incentive you’d like to apply.
By default, Aurora will calculate the total expected savings from the SRECs and subtract that amount from the system cost. However, this is not factored into the monthly post-solar bill comparison.
To show the effect of SRECs on the homeowners’ post-solar monthly bill, admins will need to navigate to Settings > Pricing > General and turn on the toggle for “Show recurring income for performance incentives”.
Once enabled, there will be a new item in the post-solar card on the Bill Overview page in Sales Mode for “Incentive income”. This will factor the expected monthly income from SRECs into their post-solar bill and the monthly savings chart.
Note: Enabling this toggle will not impact the overall savings calculations – just the way it is visualized.
Common Incentive Workarounds
While many incentives are straightforward to model in Aurora, some are more complicated than others. Below are a few workarounds for common incentives.
Illinois SRECs
The Illinois Power Agency implemented a long-term renewable resources plan, part of which provides SRECs for customers who generate solar energy. This document provides information pertaining to the Renewable Energy Credit program: 2022 Long-Term Renewable Resources Procurement Plan.
Notably, for systems of 10 kW AC or less, the RECs are paid up front, with the value determined based on the size of the system. There is a specific formula for the number of RECs expected to be generated by a PV system where:
# RECs = # kW * 0.1642 / 1000 kW/MW * 8760 hours/year * 15 years
The kW size of the system is determined by the nameplate size of the inverters. The 16.42% value is a capacity factor for fixed-mount systems. A system with an inverter capacity of 5 kW would be expected to produce about 108 RECs over the system lifetime.
The value of a REC is fixed for the 2022-2023 period. The values are listed on p.189, with a value of $78.51/REC for Group A and $82.28/REC in Group B for systems less than 10 kW AC.
If we plug the $/REC value into the #REC/#W value, we find that the upfront RECs can be modeled as a System Size (AC W) grant with a value of:
- $1.6939/W AC for Group A, 2022-2023
- $1.7753/W AC for Group B, 2022-2023
Massachusetts SMART Program
The Massachusetts SMART Program offers a production-based incentive at a set rate for a set number of years, but the specific value for behind-the-meter installations varies based on the location of the customer and the utility they receive service from.
Users can model the SMART Program as a Performance Based Incentive (PBI) in Aurora, but will need to find the value from the SMART spreadsheet.
The spreadsheet will show the Solar Incentive Payment ($/kWh) and the Duration (years) which can be input in Aurora’s incentive modeling section.