California Battery Storage Incentives

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Amid the growing rates of wildfires, rolling blackouts, and the associated risks posed to those dependent on consistent energy, the California Public Utilities Commission (CPUC) has introduced incentives for battery storage implementation for those vulnerable to these concerns.

California’s Self-Generation Incentive Program (SGIP) 

The SGIP incentives offer financial incentives for investing in battery storage. These incentives help alleviate initial project installation costs and substantially enhance the economic viability of such battery storage installations.

SGIP Equity Rebates ensure lower-income and at-risk communities get battery storage incentives. The rebate rate is $850/kilowatt-hour, covering about 85% of the average energy storage system cost.

SGIP Equity Resiliency Rebates aim for the same communities but with even higher incentives. The rebate rate is $1,000/kilowatt-hour, with nearly 100% coverage of the average energy storage system cost.

These rebates function as a reimbursement. Some installers may choose to cover the initial cost of both the equipment and installation before rebates are applied. The CPUC and utilities are exploring financing options to eliminate upfront costs as participation barriers.

Key Objectives of SGIP

SGIP serves as a catalyst in advancing the efficiency and durability of electricity supply and distribution systems, with the goal of reducing infrastructure costs. SGIP prioritizes the enhancement of energy storage systems to bolster grid resilience, particularly focusing on providing reliable backup power amid extreme weather and unexpected grid failures. The incentive is specifically designed to support those in high fire risk areas, households that have experienced at least two power outages, individuals reliant on medical devices, low-income households, and critical facilities like fire and police stations, recognizing their unique need for uninterrupted power supply. These qualifying groups are encouraged to participate in SGIP, leveraging its benefits to foster a more reliable and sustainable energy future.

Why should homeowners care about battery storage?

Now is the most cost-effective time to adopt battery storage with current incentives that make battery adoption free or nearly free. This adds stability to your home energy plan and keeps your power up and running. When the grid is overloaded and energy costs are high, you can leverage the energy stored in your battery to reduce utility costs. Other great benefits of battery storage include. 

• Energy Independence
• Medical Equipment Backup
• Backup Power
• Peak Shaving
• Increase Solar Utilization
• Grid Services and Financial Incentives
• Environmental Benefits
• Load Shifting
• Protection Against Rate Increases
• Improved Grid Health
• Enhanced Energy Management
• Potential Increase in Property Value
• Reduction in Transmission and Distribution Losses

How installers can benefit from SGIP rebates

Solar installers can leverage SGIP incentives to open more revenue for battery storage installation and repair services. Homeowners looking to benefit from this program should consult a Solar Insure Certified Installer, as these professionals can help handle the application process and manage all the requisite paperwork for the SGIP application. Given the escalating energy demand, homeowners should consider integrating solar battery storage systems, and installers can help by educating homeowners and sharing with them their options. For example, batteries manufactured in California receive an additional 20% savings. Installers can give homeowners the inside knowledge to get the most from their battery purchase.

How can homeowners participate in SGIP?

Homeowners can get the most recent, updated information on the SGIP homepage and utility-specific information according to their region: Pacific Gas and Electric Company for Northern California (PG&E), Southern California Edison(SCE), San Diego Gas and Electric (SDG&E) via the Centre for Sustainable Energy, and SoCalGas. But again, the most straightforward approach to participate in SGIP is to find a Solar Insure Certified Installer who can guide you through the installation procedure. Homeowners can search for the best installer in their region by contacting Solar Insure.

Recent updates and new incentives

There are several updates regarding the Self-Generation Incentive Program that have been made in recent years, most notably (NEM 3.0) Net Energy Metering. The CPUC decided to amend the laws governing California Net Energy Metering 3.0 in April 2023—the way homes are reimbursed for selling power back to the grid.

When NEM 3.0 was adopted, battery storage incentives were increased in the state. The recently updated SGIP program is expected to cover between 20% and 100% of the expenses of battery storage installation.

The Self-Generation Incentive Program application process is very simple. Mostly, the installer of your battery storage system will handle all the required paperwork, so homeowners don’t need to deal with the application process alone. The CPUC has issued an instruction manual containing four steps for household and company owners to follow to begin receiving the SGIP incentives. 

First, explore the battery storage installers/contractors in your region to choose which one is ideal for your battery storage installation. You can contact Solar Insure to find the best options in your region. Next, acquire multiple estimates on battery installation expenses from them, which type of battery is best for you, and which SGIP program category you are eligible for. Then, choose the best installer and collaborate with them to finish the battery installation process.

Contact your specific program coordinator (according to your utility, such as PG&E, SCE, CSE, and SoCalGas) for any query related to your project.

SGIP Measurement and Evaluation

To check the effectiveness and implementation of the SGIP program, the CPUC and SGIP Administrators (PAs) evaluate it on regular schedules and share reports presenting the results.

This assessment procedure is critical for understanding the program’s impact and for helping to improve its effectiveness in subsequent years.

The battery system owners commit (as a requirement of getting financial incentives through the SGIP) to give full access to the system location and components and engage in M&E (Measurement and Evaluation) of operations as needed by the CPUC and SGIP administrators. You can access the weekly project report and budget report to understand the performance of your system.

SGIP handbook

The SGIP handbook outlines its processes and regulations for applicants and other interested companies. The CPUC has authorized the SGIP, though they have the authority to modify it either fully or partially at any moment without advance notification.

SGIP updates will be reported in this handbook and uploaded on the websites of each Program Administrator, i.e., the utility company for the region. Access to this handbook on the CPUC website.

Proposing changes to SGIP

The purpose of this program modification guidelines (PMG) is to develop a procedure through which individuals can submit novel technologies or program rule changes to both CPUC and the Working Committee for thorough and full evaluation.

Want to suggest changes to SGIP?

As an installer in California, your input is vital to making the best possible program for battery incentives. If you would like to suggest changes to the program, here are the steps to take. 

• Contact a Program Administrator (PA) to sponsor your request for proposing any change to SGIP.
• After the initial review, the Program Administrator will distribute the proposal among all working committees for evaluation.
• Proposal presentation to the working committee by PA.
• The working group will suggest whether this change should be applied or not.
• All these recommendations will be presented to CPUC for further evaluation.
• The CPUC will make its decision after reviewing public comments.
• Program modification will be implemented after CPUC’s final decision two times a year (at the start or the middle of the year).

The SGIP program is driving significant growth in California’s battery storage sector. The added funding designated for small residential homes alone can support roughly 30,000 battery installation projects. This underscores California’s commitment to a green energy future and suggests potential job growth in the energy storage domain. It’s advisable to apply for SGIP early, as rebates decrease as more batteries get installed. The success of the SGIP initiative might not only motivate California homeowners but could also prompt other states or governments to initiate similar solar battery storage incentive schemes.

Resources

Solar Industry Glossary of Terms for Homeowners

*Disclaimer: This information is subject to change as policies regarding battery storage incentives are updated in the State of California.