California PUC approves doubling of SGIP funding, tilted toward storage

Dive Brief:

  • The California Public Utilities Commission has unanimously approved an order that doubles the budget for the state’s Self-Generation Incentive Program (SGIP) and directs the additional funding to energy storage projects.

  • The PUC ordered that beginning in 2017 the state’s three investor owned utilities shall collect $83 million on an annual basis through 2019 for SGIP.

  • 85% percent of the $249 million in funding over three years is directed to fund energy storage projects, with the remaining 15% directed to renewable energy generation projects.

Dive Insight:

In March, Commissioner Cliff Rechtschaffen proposed a doubling of funding for the SGIP program.

SGIP, created in 2001, provides funding for a variety of behind-the-meter technologies. In the past the program attracted controversy when fuel cell projects won many of the awards, even though the emission profiles of the projects were high compared with other technologies.

The result of the controversy was a realignment of the program toward energy storage.

“The important thing is to get the program up and running," Commissioner Rechtschaffen said at the CPUC meeting last week. "It has been on hold for a year, and there are many customers anxious to participate.”

Rechtschaffen said the 85-15 split is based on estimates of where the interest is among would-be program participants.

Last year, SGIP incentive rates ranged from $0.42/W to $1.49/W, depending on the type of system. Incentives are allocated through multiple rounds of bidding, with the incentive rate declining each round until all SGIP funds are doled out. 

The first round of bidding for this year's SGIP funds is expected to open May 1, with rates starting at about $0.50/Wh for small storage and large storage without the investment tax credit (ITC), or $0.36/Wh for large storage with the ITC. 

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Filed Under: Generation Solar & Renewables Energy Storage Distributed Energy Regulation & Policy
Top image credit: WikiMedia