Last Thursday, California regulators issued a decision modifying the Self Generation Incentive Program (SGIP), a 2001 program which provides incentives for energy storage and behind-the-meter generation. Under the new rules, 75% of the SGIP budget will be allocated to energy storage.
Additionally SGIP will move to a declining block grant incentive system, similar to the California Solar Initiative (CSI), with incentives for most systems starting at US$.50 per watt-hour (Wh) in the first step and declining to $0.30 per Wh in the fifth. Large-scale energy storage projects which receive the federal Investment Tax Credit (ITC) will start at $0.36 per Wh and decline to $0.16 per Wh.
Residential projects will be eligible for 15% of total incentives, and priority will be given to energy storage paired with renewable energy. For the remaining 25% of the program dealing with generation, 40% of the program will be dedicated to renewable energy.
GTM Research notes that these changes are in line with the intent of 2014 legislation which drove the regulatory change to spur greenhouse gas reduction as well as peak shaving. GTM Research Director of Energy Storage Ravi Manghani says that he expects impact on the market to be positive overall.