On April 6th, the energy storage market received a boost in California when state regulators authorized $196 million in new rebates for customers who install onsite (behind the meter) energy storage systems.

Background

The change occurs under the California Self Generation Incentive Program (“SGIP”). SGIP provides a financial rebate to energy customers who install new qualifying technologies that meet all or a portion of the customer’s on-site electricity needs. Qualifying technologies include wind turbines, waste heat to power technologies, pressure reduction turbines, internal combustion engines, microturbines, gas turbines, fuel cells, and advanced energy storage systems.

SGIP was established in 2001 and has been one of the longest-running and most successful distributed generation incentive programs in the country.  As of December 2016, SGIP has funded 2,178 completed projects representing over 450 MW of rated capacity. An additional 312 projects representing over 178 MW of rated capacity are in process towards completion.

A Win for Behind the Meter Storage

In 2016, a new California law authorized an increase in the total SGIP budget from $83 million per year to $166 million per year. On April 6, the California Public Utilities Commission (“CPUC”) formally approved this increase for years 2017, 2018, and 2019, raising the total SGIP incentive budget authorized through 2019 to $566,692,309.

The big winner in the decision was the behind the meter energy storage market. The CPUC allocated 85% of the new funds toward energy storage projects, with the remaining 15% allocated to renewable generation projects. That means the California energy storage market will receive a boost of $196 million over the next three years. In terms of the specific details, 90% of the allocation for energy storage projects must be used for projects greater than 10 kilowatts (“kW”) in capacity, with the remaining 10% available for projects less than or equal to 10 kW.

The win reflects the intent of the SGIP program to facilitate the state’s achievement of climate change goals through driving transformation of the energy system. Specifically, the decision finds that as “the proportion of renewable electricity on the grid increases, energy storage can play an increasingly important role in meeting California’s climate goals… and [i]ncentive programs can help facilitate market transformation.” This type of thinking represents continued leadership by California in the field of energy storage policy.

Next Steps

Applications for the new SGIP funding will be accepted beginning on May 1, 2017. Applications can be submitted through a portal on the SGIP portal page available here.

 

Photo of Brian Orion Brian Orion

Brian Orion is an attorney in Stoel Rives’ Energy Development group. He assists clients in the wind, solar, energy storage, electric vehicle, and similar industries. His services involve preparation of project development agreements, handling mergers and acquisitions, assisting with equity and debt financings…

Brian Orion is an attorney in Stoel Rives’ Energy Development group. He assists clients in the wind, solar, energy storage, electric vehicle, and similar industries. His services involve preparation of project development agreements, handling mergers and acquisitions, assisting with equity and debt financings, and other transactional matters. He serves as Strategic Advisor to the Smart Energy Enterprise Development Zone (SEEDZ) Initiative, a project of Joint Venture Silicon Valley. In 2009, he co-founded the UC Hastings Cleantech Roundtable, a forum for discussing hot topics in the area of renewable energy and clean technology law, held annually at the University of California, Hastings College of the Law.

Photo of Parissa Florez Parissa Florez

Parissa Florez focuses her practice in environmental and energy law, emphasizing land use, environmental due diligence, the California Environmental Quality Act (CEQA) permit approval process, municipal law, and land use and environmental litigation. She also works with Indian tribes and parties engaged in…

Parissa Florez focuses her practice in environmental and energy law, emphasizing land use, environmental due diligence, the California Environmental Quality Act (CEQA) permit approval process, municipal law, and land use and environmental litigation. She also works with Indian tribes and parties engaged in business or other transactions with Indian tribes. Prior to joining the firm, she was a clean tech policy intern for the U.S.-China Green Energy Council, where she worked on current policy, legislation and trends in clean tech and green energy. Parissa was also a Green Policy and Leadership Intern at Green For All working under Van Jones to collaborate on key provisions to be entered into the 2009 Climate and Energy Bill passed through the House of Representatives.