Incentives have helped reduce the cost of installing solar and battery systems for commercial and residential use. Among them, the Self-Generation Incentive Program (SGIP). This program, targeting California residents, enables them to install battery storage systems at a lower price than other states. Here’s what you need to know about the incentive.
What Is the Self-Generation Incentive Program (SGIP)?
The Self-Generation INcentive Program(SGIP) is a California Public Utilities Commision(CPUC) program that offers rebates to customers for installing energy storage technology for residential and commercial use. The technologies include a battery storage system, such as the BLUETTI AC500 + B300/B300S | Home Battery Backup, which you can use when there’s a power outage.
They can include solar batteries which allow you to utilize solar energy. As you’d expect, batteries can provide power for hours depending on the type, size, and how you are using them. It is for this reason the CPUC urges California residents to install them, through the generous rebates.
As California residents prepare for the next wildfire season, the CPUC has initiated a fund of over $1 billion to cater for the 2024 season. The money will be used to help communities living in fire-threat areas, low income households, medically vulnerable customers, and customers that have experienced the utility Public Safety Power Shut-off(PSPS).
While you can apply for the program, it is recommended to consult a professional installer who can help you choose the most ideal storage system. Luckily, you can access the installer find on the program’s website.
Currently, the rebate is capped between 15 and 20% of the cost of the battery. It is open to SDG&E, PG&E, SCE, and SoCalGas residential and commercial customers.
How Do Incentive Programs Work?
Incentive programs, as the name suggests, allow utility companies to buy power products at a reduced price. They allow customers, both residential and commercial, to transition to sustainable power production with no hiccups.
And as you’d expect, most utility companies offer incentives with SGIP being among the most popular for customers in California. Their aim is to alleviate the burden of electricity demand outpacing supply.
To the utility companies, they provide alternative ways to generate electricity, without constructing new power plants. Furthermore, they help them use renewables with the ability to control some loads.
By encouraging customers to change their energy consumption behavior and use electricity during off-peak hours, you get rewarded with varying financial incentives while helping alleviate excess loads on the power grid.
There are three major incentives that electric providers offer to their customers. They include demand response, time-based rates, and energy efficiency.
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Demand response
As the name suggests, demand response (DR) encourages customers to use electricity during off-peak hours. This helps reduce strain on the grid, mitigating frequent power outages. Utility companies often use demand response to help restore grid balance when the demand is high.
Most will use incentives such as bill credits and rate reductions to reward customers using demand response incentives. They are not only beneficial to residential customers, but also to the utility companies since they help reduce the cost of producing electricity and allowing them to use renewable sources of power.
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Time-based rates
Time-based rates charge customers different electricity prices depending on the time of day, season, or day type. The goal of time-based rates is to encourage you to use electricity during off-peak hours, which in turn reduces the cost of electricity production.
Ideally, utility companies will charge higher during peak hours and less during off-peak hours. Most companies will revise their rates once or twice a year, with prices being higher during summer months.
Some of the popular time-based rates include Time-of-Use (TOU), Real-Time Pricing (RTP), Variable Peak Pricing (VPP), and Critical Peak Pricing (CPP).
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Energy efficiency
Energy efficiency incentives aim to help you reduce overall power consumption and lower utility bills. While this might sound counterintuitive for a utility company, it is beneficial to you and the utility company.
According to the American Council for and Energy Efficient Economy (ACEEE), energy saving gains from energy efficiency incentives represents one-third of the cost constructing a new power source.
Furthermore, they can help utilities become more efficient by better managing power distribution during peak hours. For example, if the five grids serving all American homes may experience a downtime, the consequences can be catastrophic. It is for this reason they offer energy efficiency incentives to reduce sudden power spikes.
So, when choosing an incentive such as the SGIP consider the benefits. Ideally, they should outweigh any potential drawbacks.
How to Apply for SGIP Incentives?
To apply for the SGIP incentive, you must meet certain criteria. For one, you must be a customer of the following utility companies:
- Pacific Gas & Electric Company
- Southern California Edison
- Southern California Gas Company
- Center for Sustainable Energy
Since application varies between the companies, we recommend visiting their respective websites. Alternatively, you can consult a qualified installer to guide you through the application process.
That said, there are three eligibility categories:
- Equity Resiliency: Capped at $1000/kWh,it covers 100% of the cost of the storage system. It covers customers located in areas prone to frequent power outages or areas that are highly susceptible to wildfires.
- Equity: The incentive is capped at $850/kWh and covers up to 85% of the overall cost. It targets customers in disadvantaged communities or lower income households.
- General Market: Finally, you can opt for this incentive if you are a customer of the above utility companies. It is capped between $150 and 200/kWh for residential customers and $180-300/kWh for commercial customers
How is SGIP Paid Out?
The SGIP is calculated and paid depending on the project. Generally, the federal solar tax credit is applied to the project once the SGIP incentive has been applied. The incentive cannot exceed the total cost of the project and is capped at $5 million. Your battery system should also have an efficiency of more than 85%.
Residential and commercial customers are paid differently. For a residential customer, you’ll receive the incentive for the whole project upon completion and verification of the construction site. The process might however take anywhere between 6 months to a year.
For non-residential customers, they receive an upfront amount of 50% of the project’s total. The remaining 50% is paid annually based on the system’s performance over the next five years.
If your system exceeds the minimum performance, you can receive the remaining 50% earlier than five years. Non-residential customers should discharge a minimum of 104 discharges annually for the payment to be successful.
What Are the Benefits of Pairing My Battery with Solar?
There are many benefits of pairing your battery with solar. For example, you can maximize energy savings. Since the solar panels charge your batteries during the day, you can use this stored energy during peak hours, allowing you to save on energy bills.
Connecting your solar panels with batteries helps you achieve energy independence, meaning you can still light your home during power outages. For example, using the BLUETTI AC300 + 2*B300 | Home Battery Backup can help you save on your energy bills.
This model has a capacity of 3072Wh which is adequate to power most of your appliances during a power outage. And since it comes in a modular design, you can increase its capacity to 1288Wh to cater to your energy needs.
Another benefit of installing a solar system is reduction in carbon footprint. Batteries connected to solar panels mitigate the need for non renewable sources of power. This leads to reduced environmental pollution.
Will My Home Battery Work During a Power Outage?
Yes, a home battery such as the BLUETTI EP500Pro Solar Power Station | 3,000W 5,120Wh will work during a power outage since it has a high power output. Furthermore, it has a high capacity allowing you to connect just about any device. And thanks to the smart app, you can control and monitor it from wherever you are.
Simply connect your home battery to your existing electric system and set it to automatically switch on when there’s a power outage.
Final Thoughts
Well, the SGIP is no doubt a generous and much-needed incentive for qualified homeowners. It helps you install a battery storage at a reduced price. And when paired with the federal tax credit, you can install a solar system at the fraction of the initial price.
Consider pairing your battery system with solar panels to further reduce your utility monthly bill. Finally, consider consulting a qualified installer before choosing the type of incentive.
