SGIP rebate for battery backup? Nope, says California
Published on 01 Feb, 2019 by Michael Bishop
Considering the increasing rate of wildfires and PG&E's bankruptcy, you might be concerned about your home's electricity reliability. That's a reasonable concern!
Fortunately, you can make sure the lights stay on for your family by installing a home battery system.
California's Self Generation Incentive Program (SGIP) offers rebates for home battery systems (and other things). For example, PG&E and SCE customers would currently get a $3,500 rebate for a second-generation Tesla Powerwall battery (assuming an $8,000 all-in cost, including installation). SDG&E customers would get a $2,300 rebate. (You can learn more about the Powerwall battery here, and can check the latest SGIP rebate amounts here.)
Image source: Tesla
But I can't use the SGIP rebate for battery backup?
Well, not exactly. The SGIP program's primary purpose is to help reduce California's greenhouse gas emissions (not help California families improve their home's electricity reliability).
If your battery is only used when the grid goes down, it's sitting idle the rest of the time. Meanwhile, utility electricity is dirtier in the evening because no solar electricity is available. And as solar gets more popular, it's harder for utilities to take advantage of all that daytime solar production.
SGIP is okay with your battery system powering your home when the grid goes down. But when the grid is up and running, they want your battery system to help move daytime electricity into the evening. In other words, they want you to store electricity during the day, and send it to the grid in the evening.
What's the "hack" to get the SGIP rebate for battery backup?
SGIP wants you to switch to a "time-of-use" rate plan. Under a time-of-use rate plan, electricity is cheaper than normal during the daytime (the "off-peak" window). And it's more expensive during the evening (the "peak" window). To help reduce greenhouse gas emissions, your battery would store electricity during the off-peak window, and send it to the grid during the peak window. (You might save money in any case with a time-of-use plan — find out with the CutMyBill calculator.)
How much electricity do I need to send to the grid?
To qualify for the rebate, your battery would need to send all its stored energy to the grid the equivalent of 52 times every year. The Tesla Powerwall's energy capacity is 13.5 kWh, so it'd need to send at least 162 kilowatt-hours of electricity to the grid every year (which isn't that much — a small fraction of one month's use for a typical family).
Fortunately, it works out financially to meet this SGIP requirement. — By storing electricity during the cheaper off-peak window and sending it back out during the more expensive peak window, you're earning a 10¢+ premium on every kWh stored (the exact premium depends on your utility and rate plan). If that doesn't make sense, think of buying an apple for 10¢ and selling it for 20¢. The extra money earned will lower your electric bill, helping you pay for the battery system. Although, as solar expert Andy Sendy concluded in this article, that alone doesn't financially justify buying a battery system at today's battery prices.
While your backup-only battery system won't qualify for the SGIP rebate, it's easy enough to meet the program's requirements. And you can let your battery system's software handle the compliance — just set it and forget it!