California SGIP re-opens Monday with greater funding for energy storage

Dive Brief:

California’s Self Generation Incentive Program (SGIP) re-opens for applications on Monday with double its previous budget and a greater emphasis on energy storage projects.
Under the revised program, 79% of SGIP’s $567 million budget through 2019 is now earmarked for energy storage projects. Funding will be allocated over five separate rounds, with 20-day waiting periods in between.
Incentives for large-scale energy storage begin at $0.50/Wh for standalone systems and $0.36/Wh for those paired with storage eligible for the investment tax credit. Incentive levels decrease in future rounds depending on demand from developers.

Dive Insight:

SGIP has been one of California’s most successful renewable energy incentive programs, resulting in the allocation of more than $1.2 billion and over 2,150 MW of solar, wind, storage, fuel cell and combined heat and power projects since its inception in 2001.

SGIP has also attracted its share of controversy with reports that two companies, Bloom Energy and Stem, were able to win large shares of the available incentives in separate auction processes. That led to a revamping of the program and a greater emphasis on energy storage.

Under the revised program, SGIP has a total of $391 million reserved for large-scale storage projects, 10 kW or bigger, and $57 million reserved for residential storage projects equal to or less than 10 kW.

Funding applications will be received in up to five rounds, known as "steps," with the first opening Monday. When funding is exhausted for one step, a 20-day “pause period” is triggered until the next step opens with a lower incentive rate.

When the program opens, the incentive for large storage projects that do not take the investment tax credit will be set at $0.50/Wh. Those paired with storage eligible for the ITC will start at $0.36/Wh.

If demand for incentives is strong, the incentive level will decrease by $0.10/Wh between steps. If funds for a given step are not exhausted in 10 days, the incentive for storage would decrease by $0.05/Wh.

Incentive levels for wind power projects will begin at $0.90/W and are subject to a $0.10/W step-down. Incentives for other generation projects begin at $0.60/W, with the same $0.10/watt step-down.

If demand for incentives is strong, a lottery mechanism in the SGIP program prioritizes solar-plus-storage facilities and batteries sited in the Los Angeles Basin area affected by the Aliso Canyon natural gas leak.

Due to higher incentive levels in early steps, demand from developers is expected to trigger both the lottery mechanism and higher incentive step-down in early rounds. More information on applications is available at the SGIP site.