Soon after the discovery of the problem with electrical degradation of bipolar SiC devices, we started to perform ab initio calculations in order to evaluate the hypothesis that the degradation is caused by the expansion of stacking faults (SF) created by the propagation of partial dislocations in the (0001) basal plane. These investigations have created a wealth of important information, and constitutes a major part of our present understanding of the degradation phenomenon. Salient features are: (1) In 3C-, 4H-, 6H-, and 15R-SiC there are one, two, three, and five structurally different SFs, respectively, with different properties. (2) In 4H-, 6H- and 15R-SiC two of the different types of SFs give rise to states with energies around 0.2 eV (0.1-0.15 eV in 15R) below the conduction band. These states extend along the SF plane but are strongly localized to within around 10 A in the direction perpendicular to the SF plane. (3) These states and their one-dimensional confinement can be interpreted in terms of a quantum-well whose depth is determined by the conduction band offset between the relevant polytype and 3C-SiC. (4) Very shallow, localized (gap) states appear in some cases and can be related to the change in electronic polarization induced by the SF. (5) Calculated SF energies (SFE) are very close to both measured values and to the predictions of the simpler ANNNI (axial next nearest neighbour Ising) model. (6) The SFE in 3C-SiC is negative. (7) In 6H-SiC, the SFE for one of the SFs is considerably larger than for the other two. (8) In 15R-SiC, the SFEs for two of the SFs are almost zero. (9) The localized states described in item 2 are, beyond reasonable doubt, responsible for the electrical degradation. We have also investigated the electronic properties of two (2SF), three (3SF), and four SFs (4SF) in neighbouring planes in 4H-SiC, leading to thin 3C-like inclusions. Especially double SFs (2SF) have been observed, and may also be present in degraded devices. For these systems, some salient features are: (1) Like in the case of an isolated SF, localized gap states in the upper part of the band gap appear. The number of bound states, their energies and wave function localizations are well described by a quantum-well model. (2) The electronic polarization of the host crystal gives rise to a clear displacement of the wave functions for the localized gap states. (3) The SFE for a second SF in the presence of an already existing one (i.e., the change in total energy in going from ISF to 2SF) is around a factor four less than the SFE for the first SF. This is compatible with recent experimental observations.