The SGIP (Self-Generation Incentive Program) Explained

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One of our whole house residential battery backup systems.

How much is the SGIP rebate and how does it work?

The Self-Generation Incentive Program (SGIP) rebate is a tiered rebate applicable to grid-tied battery storage installations. To incentivize backup power solutions and reduce peak load demand on the grid, the state of California launched the SGIP program. Though the program has existed since 2011, the recent boom in residential energy storage has popularized the program.

The SGIP rebate program has a set amount of funds allocated to it, which are then administered to the various utility companies in California as follows:

The funds for each utility provider are then divided into multiple tiers of rebates. As one tier runs out of funds, it is closed and applications are pushed to the next tier down.

Before the 5th tier closed in the 3rd quarter of 2019, the rebate was .25¢ per watt hour of storage. The next tier of the SGIP is due to open in April 2020 and the latest guesstimate is that it will be .20¢ per watt hour. However, this rebate amount could change.

The tier your application ends up in depends on how long it takes to submit it, how long it takes SGIP to review it, and how many completed applications are ahead of yours.

There is an application fee of 5% of the requested incentive amount that must be mailed directly to the Program Administrator within 7 days of the project being assigned an incentive step. If it is not received within 7 days, the project may be cancelled. A scanned copy of the application fee must be uploaded for each project.

Because the application is complicated, we outsource the process to Your SolarMate, a company specializing in SGIP rebate applications, for a more expedited process.

Does my battery project qualify?

To qualify for the SGIP rebate your system must meet the following requirements:

  • System must be grid-tied.
  • System cannot be used only for emergency backup.
  • System must be capable of discharging fully at least once per day.
  • System owner is required to discharge the battery a minimum of 52 full discharges per year, for five years.
  • System must pass the energy storage Field Verification Inspection.

As stated above, SGIP systems are required to fully discharge their batteries 52 times per year (once a week) for five years.

To meet this requirement your system can be scheduled to discharge itself over the course of several days (or a week) while maintaining an energy retainer in case of emergencies. This gives owners of lead acid battery systems the flexibility to discharge their batteries over several days, ensuring the system’s longevity. As long as it reaches the equivalent of 100% discharge once per week, the system meets this requirement and also qualifies as not an emergency only system.

SGIP approved systems are subject to audits to make sure owners comply with the above requirements. If a battery system fails to pass inspection, the system has 60 calendar days to be brought up to compliance or the application will be cancelled. More information on these requirements can be found in the SGIP Handbook.

Why SGIP is controversial to some

The SGIP program was designed to alleviate the demand on the utility grid during high demand periods (like during a summer heat wave when many use AC at the same time). To cope with extra high demand, the utilities rely on Peaker Plants that can be found throughout California.

These Peaker Plants run on nuclear, natural gas, diesel, biogas or other energy types. Generally, they are highly polluting and inefficient because they take so much energy to gain inertia. In an effort to reduce the use of these plants, SGIP was proposed so that the utility companies could remotely access energy stored in battery systems.

While this is a great initiative to reduce the overall carbon footprint of California and rely more on renewable energy, it also means giving utility companies even more control over how you use your energy. Even if utility providers pay for the energy drained from the system, it contradicts the motive some customers may have to operate independently from the grid.

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