SGIP California home battery rebate: 2021 updates

(Update: California's Governor Brown signed SB 700. This adds approximately $800 million in additional funding for SGIP and extends the program through 2025.)

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 the 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 much easier for homeowners to access. Here's everything you need to know about the SGIP rebate.

Equity Resiliency Budget

California's Governor Brown signed SB 700 - this added approximately $800 million in additional funding for SGIP and extended the program through 2025, most of which is being allocated to the Equity Resiliency Budget. This extension of funding covers more solar projects across the state thanks to more inclusive eligibility requirements. These include but aren't limited to:

• Customers that have notified their utility of serious illness or condition that could become life-threatening if electricity is disconnected

• Customers categorized as "low income"

• Customers residing in Tier 3 or 4 fire risk zone

You can check out the full Equity Resiliency Budget document for more details on SGIP eligibility.

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

Until recently, applying for a home battery rebate through SGIP was difficult, particularly for residential customers. 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 has made changes to promote major incentives for CA home batteries.

First and most importantly, homeowners who are either PG&E, SCE, SCG, or SDG&E customers will be eligible for an incentive as high as $200 per kilowatt-hour (kWh) when they install a home battery. That's enough to cover the majority of your battery costs. The value of the per-kWh incentive depends on the battery size 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. You can check the current value of the incentive at the SGIP Program Metrics dashboard.

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

The second-generation Tesla Powerwall has a 13.5 kWh capacity. Under SGIP step 6, you're eligible for an incentive rate of $200/kWh, worth $2,700. That's enough to cover a significant portion of the purchase of the Powerwall equipment, which is priced at $6,700. (Note that this incentive value changes as more energy storage projects are installed in California. You can check the current value of the incentive at the SGIP Program Metrics dashboard.)

Additional costs are associated with installing a Powerwall, including other hardware, shipping, installation, and taxes. Tesla estimates that supporting hardware costs $1,100, and installation costs $800 to $2,000. However, their estimates do not include electrical upgrades (if necessary), taxes, permit fees, or any retailer/connection charges that may apply. These can add another $3,000-$4,000 to installed costs, depending on the characteristics of your personal installation. In most cases, the Powerwall is also eligible for the federal investment tax credit (ITC), which reduces prices by a further 26 percent. When you combine the SGIP incentive and federal ITC, you can expect to reduce your costs by more than half.

Tesla Powerwall savings through SGIP

Additional benefits of the overhauled SGIP program

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

Finally, funds will be available throughout the year instead of being released all at once. A continuous program aligns more 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 before installing your system.

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

Feeding 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, requiring all new solar homeowners to switch to time-of-use (TOU) rates. In the summer of 2016, San Diego Gas & Electric became the first CA utility to implement 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 benefit from backup power if the electric grid goes down. However, most home-use batteries are designed to store a few hours of electricity so that they won’t run your home at full power for multiple days.

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. Combining your SGIP savings with the 26 percent federal investment tax credit (ITC) could 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 understand what homeowners in your area are paying for their systems, how much their solar panels are saving them, and how long it takes to break even on their solar investments.

If you're ready to explore 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, indicate during the registration process that you want installation offers that include battery storage.