sgip program updates 2020

SGIP 2020 program updates: what you need to know

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(Updated November 2020)

California’s Self Generation Incentive Program (SGIP) is one of the first incentives for battery energy storage in the country. The program has been very successful, helping California to lead the nation in residential energy storage deployment. Recently, the program has received additional funding, with a slightly revised charter for how to use those funds. Below, we detail the adjustments to SGIP and how it will impact individual, residential solar + storage shoppers in California. 

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SGIP in a nutshell

As described in greater detail in our SGIP-specific article, SGIP provides incentive payments to customers in California that install energy storage systems. Specifically for residential consumers, SGIP provides an upfront rebate based on the amount of stored energy in the battery you install.

The incentive program is a tiered-block program, meaning that the level of incentives gradually decline over time as more batteries are installed in the state. This certainly leads to a first-mover opportunity to receive the highest level of rebates by being the first to act; however, given that the cost of energy storage has declined significantly over the last five years, California customers can be certain that SGIP continues to provide a sizeable rebate for installing energy storage. 

For residential customers, SGIP is currently in Step 6, which provides a rebate of $200 per kilowatt-hour (kWh) of stored energy. According to California’s distributed generation statistics portal, the two most popular batteries in the state at present are the Tesla Powerwall 2 and the LG Chem RESU 10H. With usable energy capacities of 13.5 kWh and 10 kWh, respectively, Step 5 of SGIP would provide between a $2,000 and a $2,700 rebate for purchasing a new battery in California.

Funding levels increased

In 2018, California Senate Bill 700 authorized and directed the California Public Utilities Commission (CPUC) to extend and fund SGIP for an additional five years beyond its original expiration date of January 1, 2021. Over the next two years, the CPUC deliberated the amount of funds to direct towards the re-invigorated SGIP, with a final decision coming during January 2020. 

Ultimately, the CPUC adopted a decision that approved the additional funding of SGIP by injecting a further $675 million into the program over the next five years. Combining that with carryover funds from the previous round of funding for SGIP means that there are now over $1 billion in SGIP incentives available in-state. 

Adjustments to program budgets

However, given the increased threat from wildfires in California and the increasing prevalence of Public Safety Power Shutoffs (PSPS) throughout the state, the CPUC’s decision on the delivery of additional funds under SGIP is geared towards providing batteries to those customers who are most at risk of blackouts and power shutoffs. 

In fact, nearly 60% of the current $1.056 billion program budget for SGIP is dedicated for “Equity Resiliency” projects. These projects are for people who meet one of a few specific qualifications: low-income customers, customers living in high fire risk areas, customers who experienced PSPS events on two or more distinct occasions, and critical facilities that provide services to these affected areas. 

For customers who live in these areas and who are eligible for the Equity Resilience incentives, adding storage is not only a potential necessity of geography but now a financial no-brainer: the Equity Resilience incentive is at a level of $1,000 per kWh, meaning it should cover the entire installed cost of any residential energy storage system available on the market today. 

How many batteries will be funded by the revised program?

At a $1,000 per kWh incentive rate for qualified Equity Resilience customers, the $613 million in incentives would fund between 45,000 and 60,000 batteries for disadvantaged customers and customers in high-fire risk areas. 

The revised SGIP funding also sets aside $60 million for standard residential projects. If all of these funds were paid out at the current block rate of $200 per kWh, that would fund between 22,000 and 30,000 additional batteries, depending upon how much of that budget remains after dropping down to Step 6. Given that there are nearly 25,000 residential energy storage systems currently installed in California, the increased funding in SGIP will at a minimum increase overall battery deployment in the state fourfold.  

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Regardless of whether or not you live in California, you can start seeing savings by installing a solar or a solar plus storage system today. To receive free, custom quotes from local solar installation companies in your area, register for a free account on the EnergySage Marketplace

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About Spencer Fields

Spencer is the Manager of Market Strategy & Intelligence at EnergySage, where he writes about all things energy. Prior to joining EnergySage, he spent five years at Synapse Energy Economics, providing environmental, economic and policy analysis for public interest groups. Spencer has degrees in Environmental Studies and Hispanic Studies from Brown University, meaning when he's not in the office you can find him outside or traveling somewhere to work on his Spanish.

24 thoughts on “SGIP 2020 program updates: what you need to know

    1. AvatarChris

      The batteries are not taxable according to Section 136(a) of the IRS Code (which you can Google) which states that “Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.” In this case, you are applying to Edison/PG&E for approval from their share of the ‘equity resilience’ funds that were set aside by the California Public Utility Commission so the rebate comes from the public utility to the home owner.
      An energy conservation measure is defined in Section 136 C(1) as “any installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.”
      A dwelling unit is “a house, apartment, condominium, mobile home, boat, or similar property, and all structures or other property appurtenant to such dwelling unit.”
      Since the Tesla batteries are intended to ‘improve the management of energy demand’ because they can be recharged during non peak times and discharged during peak demand times, they improve the management of energy demand in addition to acting as a back up when the grid goes down.
      This is probably worth discussing with your tax accountant in the event that you get a 1099-G for the rebate and the accountant isn’t sure whether to include it as income or not in your tax return (it should not be included as income and save this info if they do!).

      Reply
  1. AvatarAlan Silow

    I have heard different responses from other solar contractors. Specifically, that if one qualifies for the SGIP Resilience program that they will not only cap the battery rebate by the battery cost BUT will also reduce the rebate IF you choose to take a .26% federal tax credit on the battery and not just the solar panels. Isn’t that correct?

    Reply
    1. AvatarAndy Li

      Indeed. You however should expect pay nothing out of your pocket once the program is funded. With the pandemic, the fund is yet made available and most of the application, since 5/12, has been put on hold.

      Reply
  2. Avatarlindsey

    is there a max of the powerwalls able to install under equity resilancey program. My dad is on medical baseline and in a tier 2 fire zone, and has had several fires lately come right up to his property line. He would only take advantage of this though if he were able to put in at least 3 or 4 powerwalls to power his house in case of a power shutoff.

    Reply
    1. AvatarAndy Li

      Well, you have to justify the number of energy storage by your consumption. If you wish to maximize the rebate, under Equity Resilience program, all the stored must be able to consumed within four hours. Take Powerwall II as an example, four units will have a battery capacity of 54kWh. Therefore, if you have 13.5kW or higher hourly demand (how fast you use energy), then SGIP do allow you to put more energy storage. You will otherwise pay a portion of the cost out of your own pocket as the amount of grant decreases beyond 4-hour discharge time. Please note you don’t necessary have to have 13.5kW power rating for four continuous hour. You will just have to justify with the potential demand to one of the four SGIP administrator, which is also your electricity service provider.

      Reply
  3. AvatarChris Thompson

    If you qualify for the equity resiliency program ($1,000/kWh or $13,500 per Powerwall) and you purchase two Powerwalls for $21,000 installed. Does the rebate cap at $21,000? Can you take the 26% tax credit and the SGIP rebate?

    Reply
  4. AvatarRobert Singer

    I just had installed a Tesla battery (today) . How do I apply for the SGIP rebate? Do I do it? How, or does the installing company do it ( Semper Solaris)?

    Thank you,

    Reply

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