Update on California’s Self-Generation Incentive Program

To strengthen California’s rapid transition to renewable energy, the California Public Utilities Commission has budgeted over $200 million for energy storage rebates through the Self-Generation Incentive Program, or SGIP. Rebates are available to all customers of California’s investor-owned utilities, including the utility providers of Santa Barbara County: Southern California Edison (SCE), SoCal Gas (SCG) and Pacific Gas and Electric (PG&E).

SGIP was due to expire at the end of 2019, but in September Governor Jerry Brown signed a bill to extend the funding for SGIP another five years. This new bill adds over $600 million in funding to energy storage projects, and since the cost of installing batteries is decreasing, this extension will add several gigawatts of storage capacity to California’s grid.

One of SGIP’s goals is to reward “early-adopters” of renewable energy storage, so as available funding is used, the incentive amount per customer steps down. Here is where SGIP incentives currently* stand for residential energy storage under 10 kWh:

 

SGIP California energy storage

At the current rate of $300 per kilowatt-hour, a residential customer installing an 8 kWh battery will receive a rebate of $2,400. If the home battery system is connected to a solar PV system, it is also eligible for the 30% Federal Tax Credit, or ITC. The tax credit amount depends on how often the battery is charged by the solar panels and is calculated by the post-rebate cost.   

With this newly approved extension there are some uncertainties as to how the program’s steps will be “reset” or if a certain portion of the budget will be reserved for small residential battery systems (so big commercial and industrial-scale projects don’t use up all the funding.) For now there is still plenty of funding available and the current step decreases the cost of installing a home battery system significantly.

Are you thinking about installing a battery? Check out some of our other recent posts about energy storage or ask us a question

*as of October 24, 2018