California’s Self-Generation Incentive Program has a history of costly, unintended consequences that reveal flaws in the program and in human behavior.
Here’s another big incentive program problem:
Much of the $612 million “equity” and “equity resiliency” incentive for low-income, vulnerable customers and critical facilities in high-risk fire threat areas or those affected by public safety power shutoffs has been used up by customers using electricity for well pumps at second-homes, according to reporting in RTO Insider.
As pv magazine has reported, the Equity Resiliency incentive level is set at $1,000/kWh, which is enough to almost completely cover the installation of a storage system. The Equity Budget incentive was raised to $850/kWh and is directed at low-income customers in disadvantaged communities, and institutions, agencies and small businesses in disadvantaged communities.
But instead, “We were seeing some second-home residents receive the hefty grants, which pay the full cost of battery storage and solar cells to charge the units,” said CPUC Commissioner Clifford Rechtschaffen, quoted in the same RTO article.
“More than eight months after the decision took effect, the state’s three large investor-owned utilities haven’t started reaching out to medically vulnerable customers,” Rechtschaffen said. “Instead, developers of storage systems have targeted households with wells, regardless of income, and scooped up much of the funding that was supposed to last through 2024.”
The SGIP
The SGIP is a long-time, generous subsidy established by California’s PUC to support distributed energy resources, contribute to GHG emission reductions, demand reductions, and reduced customer electricity purchases. It provides one-time, upfront rebates for distributed energy systems on the customer’s side of the utility meter.
The lucrative program has gone through enormous changes since its creation as a peak-load reduction program after the California energy crisis in 2001. The old program was heavy on generation and had an inordinate fondness for fuel cells.
The 2020 SGIP is a different animal — it’s a stark response to California’s wildfires and Public Safety Power Shutoffs (PSPS) with 80% of its SB 700 funds devoted to energy storage, along with a marked emphasis on providing resiliency for vulnerable Californians in vulnerable locations.
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