For systems less than 100 kW in size, one-time up-front incentives based on expected system performance are paid to the customers at the time the system is installed. The expected performance of the system is calculated based on equipment ratings and installation factors (geographic location, orientation, tilt, and shading). Therefore, the EPBB incentives are based on estimates of the future performance of the system.

At the beginning of the program (on January 1, 2007) the payment levels were set at $2.50 per watt for residential and commercial customers. These customers are also eligible for additional federal tax credits. Governmental and non-profit organizations initially received $3.25 per watt. The difference in payment levels is due to the lack of access of these entities to federal tax credits. The incentives gradually decrease over the course of the program according to a specific ten step system. They phase out after step ten is reached. Incentives drop to the next lower level, once the total solar MW capacity that is defined for the particular step has been reached.

The rate with which the incentives will phase out depends on different factors:

1. The depletion of the total incentive budget
2. MW goals of the different program administrators
3. The end of the program or 2016 (whichever comes first)

CSI Incentive Step Regime