Performance-Based Incentive (PBI)

A performance-based incentive (PBI) is a financial incentive that pays solar system owners based on the actual amount of electricity their system produces, rather than a flat upfront rebate. Payments are typically calculated per kilowatt-hour (kWh) generated over a set period of time.

PBI programs reward real energy production, which encourages homeowners to maintain their systems and ensure optimal performance. Payments are usually made monthly or quarterly and can last for 5–20 years depending on the program. The per-kWh rate varies by program and location — common rates range from $0.02 to $0.10 per kWh. Feed-in tariffs are a specific type of PBI where the utility purchases all or excess solar electricity at a predetermined rate. PBI programs are offered by some states, utilities, and municipalities. While not as widespread as net metering, PBIs can stack with other incentives like the federal ITC and SRECs, further improving the financial return of going solar. Check with your local utility and state energy office to see if PBI programs are available in your area.