Effective May 25, 2006, incentive payments will be reduced to $2.50 / watt for new Self-Generation Incentive Program PV project applications when conditional reservations under this program reach 50 MW, based on the statewide level of conditional reservations. In Decision D.05-012-044, the Commission increased its solar incentive budget from $42 million to $342 million for the SGIP in 2006. The decision set solar rebates at $2.80/watt for qualifying new solar projects. Shortly thereafter, the Commission issued D.06-01-024, which created the California Solar Initiative (CSI) with a total budget for solar incentives and programs of $2.8 billion over 11 years. The $342 million budget for SGIP in 2006 is part of the $2.8 billion budgeted for CSI over 11 years. In establishing the CSI, the Commission noted the difficult task of setting incentive levels high enough to motivate solar investments and yet not so high that ratepayers are subsidizing projects that would be built with lower incentives. D.06-01-024 contains a schedule for automatic reductions of incentive payments on an annual basis or when program participation reaches specific megawatt (MW) levels to ensure optimal funding availability over the duration of the CSI program. Read more in Decision 06-05-025.