How to model the Self-Generation Incentive Program (SGIP) for Energy Storage incentive

Summary

The Self-Generation Incentive Program (SGIP) provides substantial rebates for installing battery energy storage systems (BESS) at both residential and non-residential properties in California. Rebates are categorized into three tiers—Equity Resiliency, Equity, and General Market—with incentives ranging from $150 to $1,000 per kWh, depending on customer eligibility. The program supports communities affected by grid instability and encourages distributed energy storage for greater grid reliability and resilience.

Key Highlights:

• Rebates up to $1,000/kWh for vulnerable or high-risk communities

• Upfront and performance-based payments depending on customer type

• OpenSolar allows you to model SGIP rebates directly in project proposals

• Incentive amounts and payout structures vary by tier and system size

What is SGIP?

The SGIP offers financial incentives for customers who install energy storage systems. It is available to both residential and non-residential customers served by California's major investor-owned utilities:

• PG&E

• Southern California Edison (SCE)

• San Diego Gas & Electric (SDG&E)

• Southern California Gas Company (SoCalGas)

SGIP Incentive Categories & Amounts

1. Equity Resiliency

• 💰 $1,000/kWh

• Designed to cover up to 100% of battery system costs

• Targeted at:

  • Households and facilities in high fire-threat districts

  • Customers who rely on electricity for life-support systems

  • Areas subject to Public Safety Power Shutoffs (PSPS)

2. Equity

• 💰 $850/kWh

• Covers up to 85% of battery costs

• Targeted at:

  • Disadvantaged communities

  • Low-income housing and multifamily buildings

3. General Market

• 💰 ~$150–$200/kWh (residential)

• 💰 ~$180–$300/kWh (non-residential)

• Covers around 15–30% of the battery system cost

Eligibility Criteria

Equity Resiliency

• Live in Tier 2 or Tier 3 fire risk areas OR

• Participate in Medical Baseline programs OR

• Are subject to frequent outages (PSPS events)
   

Equity

• Must live in a Disadvantaged Community (DAC), or

• Reside in low-income multifamily housing
   

General Market

• Available to customers who do not qualify for Equity/Resiliency rebates
   

How is the SGIP Incentive Paid?

Residential Customers

• Receive 100% of the incentive upfront (via check or wire transfer)

• Payment issued after project completion and site verification

• Timeline: Typically 6–12 months

• Must discharge system at least 52 times/year

Non-Residential Customers

• Receive 50% upfront, and the remaining 50% through Performance-Based Incentives (PBI) over 5 years

• Faster payouts possible for systems exceeding minimum performance

• Must discharge at least 104 times/year

• Required to reduce GHG emissions by 5 kg CO₂/kWh annually

  • Penalties apply for underperformance, up to 100% of annual PBI

Tax Credit Impact (ITC)

• The 30% federal Investment Tax Credit (ITC) applies after SGIP rebates are deducted.

  • Example:

    • Project cost = $10,000

    • SGIP rebate = $1,500

    • ITC applies to $8,500, not the full amount

Technical Requirements

• Must be enrolled in a time-of-use (TOU) rate with:

  • Peak period starting at 4:00 PM or later

  • Summer peak-to-off-peak price ratio ≥ 1.69

• Must have a round-trip efficiency > 85%

• System performance must meet GHG reduction thresholds for non-residential

Creating the incentive in OpenSolar

You can model SGIP incentives in OpenSolar proposals by:

1. Navigating to:
   Control > Other > Incentives

2. Clicking + Add Incentive

3. Set the type to be Self-Generation Incentive Program 

Note: Below we have an example of the SGIP incentive for small residential storage (< 10 kW).

You can input the incentive amount per kWh based on the SGIP incentive category you are trying to model. You can see the full list of SGIP categories on this website here. 

Modelling SGIP's Performance-Based Incentive (PBI)

Non-residential customers receive 50% of the incentive upfront, and the remaining 50% paid annually based on the actual performance of the system over the next 5 years. If the performance of the system exceeds the minimum requirement, the customer could get the remaining 50% of the incentive amount paid out earlier than 5 years.

Non-residential systems are also required to discharge a minimum of 104 full discharges per year. To model this you need to enable the toggle "Is Paid PBI" and input the relevant details of the PBI as shown in the example of the SGIP Non-Residential Large-scale Storage (>10 kW) below:

Opting out of Resiliency Operation

If a customer decides to opt-out of resiliency, they will get a reduced incentive paid out depending on the discharge duration (hours) of the installed energy storage system. To create an incentive that models the incentive amount when a customer opts out of resiliency, please enable the Opted out of Resiliency Operation toggle.

Below is the incentive decline based on discharge duration (hours) for resiliency systems and non-resiliency systems (i.e. customer that opt-out of resiliency operation):