California home battery rebate: Self-Generation Incentive Program (SGIP) explained

CA home battery rebate for home

California’s SGIP rebate is one of the best incentives in the country for homeowners who want to install a home battery with their solar panels. The Golden State already leads the country in solar energy – it has more solar capacity than any other state in the U.S., and nearly six times more solar than number-two state Arizona. Now, California is becoming a leader in energy storage. Thanks to the Self-Generation Incentive Program (SGIP) you can get a rebate for most or all of your solar battery installation in California, and it’s about to become a lot easier for homeowners to access. Here’s everything you need to know about SGIP rebate in 2017.


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California SGIP rebate program can help you save

The California energy storage rebate program, technically referred to as the Self-Generation Incentive Program (SGIP), was established back in 2001. SGIP supports a variety of “behind the meter” technologies that are installed at your home or business, including energy storage, fuel cells, and combined heat and power generators.

Until recently, the process for applying to get a home battery rebate through SGIP was difficult, particularly for residential customers. All of the program funds became available on a specific day, and the vast majority were taken very quickly by industrial-sized energy storage projects, leaving nothing left for homeowners interested in small home batteries.

Luckily for homeowners with energy storage in California, the program is getting an overhaul. There are a few changes that will lead to major incentives for CA home batteries.

First, and most importantly, homeowners who are customers of either PG&E, SCE, or SDG&E will be eligible for an incentive as high as $500 per kilowatt-hour (kWh) when you install a home battery. That’s enough to cover most, if not all, of your costs. The value of the per-kWh incentive depends on the size of the battery you purchase and will be reduced as more batteries are installed in the Golden State, so it pays to be an “early adopter” of home batteries.

 

powerwall solar option

 

How much could you save on a Tesla Powerwall with SGIP?

The second-generation Tesla Powerwall has a 13.5 kWh capacity, which means that it is eligible for a $500/kWh incentive totaling $6,750. The list price for the Powerwall is $5,500. Supporting hardware costs $700, bringing equipment costs to $6,200. Tesla estimates that installation will cost an additional $800 to $2,000. Assuming that installation costs $1,000, the total price comes to $7,200. Subtract the $6,750 incentive and you’re left to cover just $450 of your battery costs.

13.5 kWh * $500/kWh incentive = $6,750 rebate
$5,500 (list price) + $700 (supporting hardware) + $1,000 (installation) = $7,200 cost

$7,200 cost – $6,750 rebate = $450 net price

California storage incentive value graph

Second, 75 percent of the program’s funds (equal to more than $62 million annually) will be marked specifically for energy storage. This is a departure from past years, when more of the funds were used for fuel cells and other forms of energy production. Fifteen percent of the funds will also be marked specifically for residential applications to ensure that homeowners who want to install batteries with their solar panels can afford to do so.

funds for California battery incentives

Finally, instead of being released all at once, funds will be available throughout the entire year. A continuous program is more in line with how most other incentive programs are structured, particularly for solar power. This way, your solar-plus-storage installer can tell you exactly how much of a rebate is available to you before you install your system.

Why get a California home battery rebate?

Home energy storage offers many benefits, particularly if you have a solar panel system on your roof. In essence, installing a home battery allows you to store your excess solar power at home instead of feeding it back into the grid.

Feeding your excess power into the electric grid is an easy way to balance out your daily electricity production and use. Under California’s original net metering policy, homeowners receive bill credits equal to the price they pay for electricity for every kWh of extra solar power they send back onto the grid. However, the state is implementing a few changes to net metering that will make a battery more valuable for homeowners.

In early 2016, California approved net metering 2.0, which will eventually require all new solar homeowners to switch to time-of-use (TOU) rates. In summer 2016, San Diego Gas & Electric became the first CA utility to start implementing net metering 2.0. If you have TOU rates for your electricity, the cost of one kWh (and the value of every kWh you send back to the grid) will vary depending on the time of day. By installing a home battery with your solar panel system, you can store your excess solar power at home when utility rates are low and use it when rates are highest.

When you install a home battery, you also have the benefit of some backup power in the event that the electric grid goes down. However, most batteries for home use are designed to store a few hours of electricity, so they won’t run your home at full power for multiple days.

How to get the best price on solar-plus-storage in CA 

California’s incentives for home energy storage are yet another indicator of the Golden State’s leadership in sustainability. With SGIP, homeowners in CA can install a battery as part of their home solar system with little to no additional cost. When you combine your SGIP savings with the 30 percent federal investment tax credit (ITC), you could potentially cut your solar-plus-storage costs in half.

The first step to finding the right price for your solar investment is to understand the market in your area. You can use EnergySage’s Solar Data Explorer for California to get a sense of what homeowners in your area are paying for their systems, how much their solar panels are saving them, and how long it takes for them to break even on their solar investments.

If you’re ready to start exploring your solar options, join the EnergySage Solar Marketplace. You can access qualified, pre-vetted solar installers local to you, compare multiple solar offers, and find the best deal for your home. To get quotes for solar-plus-storage systems, simply indicate during the registration process that you want installation offers that include battery storage.

 

california home battery sgip graphic

6 thoughts on “California home battery rebate: Self-Generation Incentive Program (SGIP) explained

  1. Michael

    WOWZERS! Its a great time to go solar and have a battery installed in California! I built a mobile tiny house on wheels including 6 rooftop PV solar panels and a 750 Ah battery bank. With the SGIP program, my off-grid solar kit would cost just $2,500!

    Reply
    1. Keith

      One thing this article does not mention is that there are conditions to the rebate. It requires a commitment to do the equivalent of 52 full discharges back into the grid over a one year period for at least five years. At 13.5 kWh * 52 means you would have to send at least 702 kWh per year to qualify for the rebate.

      Reply
  2. Jim

    Sounding more and more like a scam to me. First of all, CAENERGY.ORG sounds like an official CA gov organization, but it doesn’t appear to be. It just refers you to Swell energy, who is selling batteries. And the above comments from Keith raises concerns. Batteries are mainly meant for backup for a grid outage. Yes, you can go “off grid”, charging the battery during the day from solar and using that over night. But every discharge/charge reduces the life of the battery and even the battery companies don’t recommend that sustained mode of operation. So if Keith is right on requiring x number of full discharges to qualify, it doesn’t sound like a good deal to me. I’m very suspicious when a supposedly gov org site just ends up with a battery salesman.

    Reply
    1. Jim Jenal

      ” But every discharge/charge reduces the life of the battery and even the battery companies don’t recommend that sustained mode of operation”

      Not necessarily – while older style batteries were designed for “off-grid” applications, new energy storage systems, like the Enphase Energy AC Battery, is designed to capture energy from a PV array that would have gone back to the grid, and store it to be used by the homeowner when demand is greater than what the PV can produce. In other words, it is perfectly designed for time-of-use rates which will be mandated as part of NEM 2.0.
      These units are designed for a depth of discharge >80% on a daily basis for up to 10 years!

      Reply
  3. Craig Crouch

    Seems like the trade off of annual energy from two panels (700 kWh/90%) for five years gets you a 13 kWh backup system for the ten-year battery life. That assumes you are lucky enough to win the early May grant “lottery”, which one battery maker tells me is already oversubscribed. Don’t forget the $500 application fee, and the contract to buy the battery even if you don’t win a grant. Also, the grant per-kWh amount drops with increased participation. My impression is that the up-funded SGIP is for rich hobby solar adopters. Those who can afford to buy batteries in any case.

    Reply

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