Self-Generation Incentive Program on Storage

The re-opening of a California incentive program based mostly on energy storage has arrived. The Self-Generation Incentive Program (SGIP) will provide incentives to support existing, new, and emerging distributed energy resources.  SGIP will provide rebates on the customers side of the utility meter and will apply to qualifying technologies including wind turbines, waste heat to power technologies, pressure reduction turbines, internal combustion engines, microturbines, gas turbines, fuel cells, and advanced energy storage systems such as solar energy systems (CPUC).

The re-opening of SGIP is planned for May 1, 2017 and once it begins it will reserve 75% of its incentives for energy storage projects and 25% of its incentives for generation projects. For the residential storage demographic, there are a number or things to consider when applying for this incentive. It is important to meet with several developers (recommended at least three) and pay attention to reviews when researching these companies. A helpful checklist from the California Public Utilities Commission website is below:

  • Hire only state-licensed contractors
  • Check a contractor’s license number online at or by calling 1-800-321-CSLB (2752)
  • Get at least three bids
  • Get three references from each bidder and review past work in person
  • Make sure all project expectations are in writing and only sign the contract if you completely understand the terms.

So once you find a developer, how does the incentive program work? SGIP will offer incentives based on a handful of factors including the kilowatt hour capacity of the system.  The residential sector will be broken up into five categories called Steps. Each Step will represent a different amount of energy storage (see chart below) and a certain amount of $40 million put up by the state is reserved and distributed to each step.

When you have figured out what Step you may be in, how do you know how much financial incentive you will be receiving? It will depend on the Step you are in and the time you apply, remembering that earlier steps receive more incentives.  Incentive amounts offered to new storage customers will decline over time as the market matures to ensure efficient use of these ratepayer-funded incentives. It also depends on the hours of continual discharge from the storage device. For the first two hours of discharge from storage you will receive 100% of the incentive rate, 50% of the incentive rate for the next two hours, and so on (see chart below for more).

It is important to keep in mind certain restrictions, for example, the storage system can not be used solely as a backup energy source and every system that receives program incentives is required to provide operational data to the program administrators and the CPUC upon request (CPUC). Also, everyone who applies will be accepted to receive the incentive and it is important to take action sooner rather than later to see if you qualify.

Do not let the restrictions sway your decision because they do not compare to the benefits that would be received from following through. The incentive program will help mitigate the cost of installation and there are many more ways a storage system can be used to help generate savings. Make sure to ask the developer about how your system will be configured and what you can expect as a reasonable payback period. The developer may be using what is known as “demand response” where the developer of your storage system uses your system in combination with other energy storage systems they manage to jointly participate in utility programs that provide incentives for assistance in reducing demand for grid resources at certain times. By finding out this information it is possible to reduce costs in many areas including your residential electricity bill.

Administrators that can provide more information about signing up are available and are dependent upon the area you live in California. These administrators will walk you through steps for applying although it is likely the developer applies for you.  The website for California Public Utilities Commission has generously put together a resource guide to help find an administrator for interested residents of California:

“In PG&E and SMUD territory, PG&E is the program administrator. PG&E’s website for the program can be found here. In SCE territory, SCE is the program administrators. SCE’s website for the program can be found here. In SDG&E territory, the Center for Sustainable Energy is the program administrator. The Center’s website for the program can be found here. In LADWP territory, the program administrator is SoCalGas. Their program website can be found here.”

Brighten Solar Co. encourages any interested Californians to go out and find more information about SGIP! Please feel free to contact Brighten Solar Co. with any questions as well and we will be happy to assist you!!