California has been at the forefront of the adoption of residential solar energy. In combination with the federal tax credit, to continue this leadership, California has put a program in place to incentivize homeowners to add energy storage. The Self-Generation Incentive Program (SGIP) has been developed to provide homeowners with a rebate for installing a solar battery system at their homes. SGIP can be confusing at first, so let’s walk through everything a homeowner needs to understand about the SGIP rebate.
Key points about the SGIP Rebate
The Self-Generation Incentive Program (SGIP) was designed by the state of California to help residents install more energy storage systems at their homes
Home energy storage is used to provide backup power and help customers who have Time of Use utility rates structures
The SGIP incentive can save homeowners thousands of dollars on a battery installation
The program is designed to decrease as more homeowners install batteries
To learn more about the SGIP program, energy storage, and solar, schedule a free consultation with Alchemy Solar today
California SGIP rebate history
The Self-Generation Incentive Program (SGIP) is not a new program. It was established in 2001 as a way to support the expansion of “behind the meter” energy storage installations. The energy storage was not only solar batteries but also fuel cells, heat and power generation, and other energy storage.
The challenge with the program for homeowners has been the application process. Historically, all the funds would become available on the same day, leading to large scale industrial energy storage claiming all the funds and leaving little for homeowners.
As California has realized the importance of solar energy storage for the continued growth of residential solar, it has updated the Self-Generation Incentive Program to make it easier for California homeowners to access the rebate.
Homeowners who receive electricity from Pacific Gas and Electric (PG&E), Southern California Edison (SCE), Southern California Gas (SCG), or San Diego Gas and Electric (SDG&E) are all eligible for SGIP incentives when they install a home battery.
How much can a homeowner save on energy storage under the SGIP program?
The amount that the Self-Generation Incentive Program can offset depends on the size of the batteries installed, the level of funding available in each utility, and additional factors such as the home in a high wildfire zone, do the homeowners have financial or medical needs? Regardless of the exact amount of the battery rebate, when combined with the Federal Solar Tax Credit (ITC), a homeowner can save thousands of dollars on solar battery installation.
Because the ITC (federal tax credit) is stepping down and SGIP incentive rate does decrease over time, it makes financial sense for residential customers to be an early adopter of energy storage technology!
Why get a solar battery in California?
Solar battery storage is valuable in California and is becoming an increasingly common part of solar system installations. As many utilities in California have transitioned over to Net-Metering 2.0, they require homeowners to switch over to time-of-use (TOU) rates. Time-of-use is a utility rate structure that charges different amounts for electricity at different times of the day.
A home battery allows the extra energy produced by a home solar panel system to be stored when electricity is the cheapest and deployed from the home battery when the TOU rates are the highest. All three investor-owned utilities, Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E), are all under NEM 2.0 but have different TOU rate structures. The TOU rates in SDG&E are especially beneficial for energy storage.
In addition to the savings under a TOU plan, solar-powered home battery systems also provide residential customers with battery backup capabilities at home. Battery backup allows some of the electrical circuits in a home to stay powered during a power outage. During the heatwave in August of 2020, nearly 3.3 million Californias were projected to lose power. This would more than double the record, set in 2001 for California residents who experienced a rolling blackout.
During the time of COVID, with so many people working from home or schooling children from home, the loss of power can have a devastating impact. This is backup power is so appealing for many homeowners to improve safety for homeowners during a power outage provides.
When combined, the savings under a TOU rate plan and battery backup capabilities make home solar batteries a fascinating option for many homeowners. With the addition of the Self-Generation Incentive Program (SGIP), the ITC batteries go from being not only an exciting option but also an extremely cost-effective one.
If you are SDG&E, PG&E, or SCE customer interested in learning more about the SGIP program or would like to see if home solar batteries make sense for you, schedule a free consultation with Alchemy Solar.