What’s new with California’s SGIP battery rebate in 2021?

Updated

SGIP
The Self-Generation Incentive Program (SGIP) has helped California homeowners achieve energy security while boosting the state’s solar battery industry. Image source: PRI

The Self-Generation Incentive Program (SGIP) in California is one of the best incentives for homeowners who want to pair a solar battery with their solar panel system. The state of California is already a leader in the solar industry, and SGIP is slated to make it one of the top states for battery storage, too. 

By cutting the costs of a solar battery by one-third, the SGIP battery rebate allows California homeowners to have access to reliable, clean energy - which is more important than ever with the coronavirus pandemic and increasingly intense wildfire seasons in the Golden State.  

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    What is SGIP?

    SGIP is an incentive program run by the California Public Utilities Commission (CPUC).

    About 80% of the program’s budget is allocated to energy storage systems, thanks to the passing of Senate Bill 700 in 2018. SGIP provides people with an upfront rebate that is based on the storage capacity of the battery they install.

    The sooner you apply for SGIP, the greater the rebate you’ll receive. This is because SGIP has a tiered rate structure, which means the SGIP incentive amount decreases as more batteries are installed.

    Your incentive rate not only depends on when you apply to the program, but also what kind of project it is. For example, a large-scale battery installation at a factory will qualify for a different incentive amount than a small battery installed in your home. 

    The remaining 20% of the SGIP budget is reserved for rebates for other “behind-the-meter” distributed generation technologies, such as wind turbines, waste-to-heat power, fuel-cells, and pressure-reduction turbines that help decrease greenhouse gas (GHG) emissions in the state. 

    What's new with the SGIP rebate?

    In January 2020, the CPUC approved additional funding for SGIP. The approval provided an additional $675 million for the program and extended it until 2024. That means there is over $1 billion in incentives available through SGIP

    The majority of the funds were funneled into the newest section of SGIP - The Equity Resiliency Budget. The Equity Resiliency Budget was created in response to the increase of wildfires and Public Safety Power Shutoffs (PSPS) (AKA planned power outages) throughout California. 

    To qualify for the equity resiliency budget, a customer must:

    • Be considered a low-income customer
    • Live in a Tier 3 or Tier 4 fire risk area
    • Live in an area that has experienced two or more PSPS events
    • Be a critical facility that services a disadvantaged community, high fire risk area, or PSPS-affected area

    Energy storage projects that meet these criteria will receive a substantial SGIP incentive of $1,000 per kWh of battery storage installed. This increased rebate rate is believed to increase access to battery storage for the most vulnerable customers by covering almost the entire cost of installing battery storage.   

    The new budget also allocated about $60 million to regular residential projects. This has allowed SGIP to extend beyond its original “five step” design. Now, the SGIP residential program is in Step 6, with an incentive level of $200 per kWh of solar battery storage installed. 

    What are the current SGIP incentive rates?

    In order to qualify for SGIP, applicants must be either a commercial, industrial, agricultural, or residential customer of Pacific Gas & Electric (PG&E), SoCalGas, Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E). 

    Other California residents can apply through the Center for Sustainable Energy (CSE). PG&E, SCE, SoCalGas, SDG&E, and CSE are all SGIP Program Administrators, which distribute the incentives to applicants. 

    The SGIP rebate for battery storage is separated into 5 project types, each with their own incentive rate. The current incentive rates for each of the project types are listed in the following table:                        

    SGIP Incentive rates based on project type
    Project type Current step Incentive rate
    Large-scale storage (>10 kW) Step 3 $350/kWh
    Large-scale storage (>10 kW) with ITC Step 3 $250/kWh
    Residential storage (≤10 kW) Step 6 $200/kWh
    Residential equity storage (≤10 kW) Step 5 $850/kWh
    Residential equity resiliency storage (≤10 kW) Step 5 $1,000/kWh

    How much can you save on a battery storage system with SGIP?

    Making the decision to install a battery storage system in your home can be an expensive investment. SGIP can help soften the blow of the upfront installation costs of installing a battery.

    Right now, residential customers will receive $200 per kilowatt hour (kWh) of energy storage they install. That means a 10 kWh solar battery would qualify for a $2,000 rebate! 

    The price of installation will be even lower when you take the 26% investment tax credit (ITC) into account. 

    Find out how much you can save with solar-plus-battery storage for your specific home

    How to apply for the SGIP rebate

    Applying for the SGIP rebate is easy! Usually, the installer of your energy storage system will do all the work for you, so you don’t have to worry about the application process. 

    The CPUC has released a guide with four steps for home and business owners to get started with the SGIP rebate:

    1. Research battery storage installers in your area to find which one is the best for your battery installation.
    2. Contact installers to get quotes on battery installation prices, what battery is right for you, as well as what SGIP program category you qualify for.
    3. Pick your installer and work with them to complete your installation project.
    4. Contact your Program Administrator with any further questions.

    What is the future of SGIP?

    SGIP has already spurred substantial growth of the solar battery industry in California. The additional funds for the small residential budget alone could potentially support around 30,000 battery installation projects. That’s a lot of batteries. 

    So, with more funds in the program, plus more frequent power outages and people spending more time at home thanks to the pandemic, we can expect to see an increase in the amount of batteries being installed in California. 

    This not only means that the state is headed towards a renewable energy future, but there could be an increase in energy storage jobs, as well. 

    Hopefully the success of the SGIP program will encourage other states to follow suit and start solar and storage incentive programs. To see what incentives and rebates are available in your area, check out our solar savings calculator below.

    Find out if you quality for SGIP and other local rebate programs

    Key takeaways

    • California’s Self-Generation Incentive Program (SGIP) is a tiered rate structure incentive that provides rebates statewide for battery storage projects based on the capacity of the battery installed.
    • It is better to apply to SGIP sooner rather than later because the incentive rate decreases as more batteries are installed.
    • In January 2020, the CPUC expanded the SGIP budget, with most funds going towards the Equity Resiliency Budget to install more batteries in low income areas that have been impacted by wildfires and planned power outages.
    • Usually, the installer of your battery system will apply to SGIP for you so you don’t have to worry about the application.
    • Extending the SGIP budget will likely increase the amount of solar batteries installed in the state, as well as increase the number of California’s clean energy jobs.
     - Author of Solar Reviews

    Catherine Lane

    SolarReviews Blog Author

    Catherine is a researcher and content specialist at SolarReviews. She has strong interests in issues related to climate and sustainability which led her to pursue a degree in environmental science at Ramapo College of New Jersey.

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