Amidst massive wildfires, rolling blackouts and the continued threat of large-scale grid outages, California is shifting more than $100 million of its $1.2 billion Self Generation Incentive Program budget to help low-income communities install about 100 megawatts of stalled behind-the-meter battery projects.
The shift won’t tap the $613 million in SGIP funds earmarked for low-income and medically vulnerable customers at highest risk of fire-prevention power outages. Instead, Thursday’s decision from the California Public Utilities Commission will shift $108.5 million from SGIP’s undersubscribed large-scale storage budget. That money will help fund some of the $306 million in projects in low-income and disadvantaged communities that applied for SGIP funds this year, applications that outstripped the existing $53 million “equity budget” available to them.
That equity budget offers incentives of 85 cents per watt-hour for installations of up to 30 kilowatts of power capacity, more than SGIP’s general incentive categories — a critical piece to making projects cost-effective. More broadly, SGIP funds have fueled much of the more than 400 megawatts of commercial and residential behind-the-meter batteries installed in California to date, according to Wood Mackenzie data.
The California Energy Storage Alliance (CESA) and storage vendors including Stem have pushed to fund waitlisted projects on the grounds that many are equally at threat of fire-prevention outages as those deemed eligible for the larger $613 million budget.
Since 2018, hundreds of thousands of Pacific Gas & Electric customers, and tens of thousands of Southern California residents, have experienced blackouts as utilities de-energize power grids to prevent them from sparking wildfires.
CESA’s filing with the CPUC highlighted unfunded projects including a hospital and a wastewater treatment plant within a mile of high-fire-threat districts, and schools that suffered outages last year but aren’t eligible under the CPUC’s “critical facility” criteria.
CESA and Stem had originally asked for another $150 million to be drawn from the $613 million “equity-resiliency” budget, which is restricted to a narrowly defined class of customers most threatened by fire-prevention outages. That program, which offers a $1-per-watt incentive that covers almost the entire up-front cost of battery installations, has been heavily tapped in PG&E territory, with its budget of $270 million down to a mere $22,700 remaining as of this week.
PG&E, which emerged this year from a 2019 bankruptcy caused by tens of billions of dollars in liabilities related to wildfires started by its power grid failures, implemented widespread fire-prevention shutoffs last year. This year’s fire season has brought more public safety power shutoffs from PG&E, including the potential for outages across the San Francisco Bay Area this weekend.
The state’s other investor-owned utilities, which haven’t been forced to de-energize their grids at the same scale as PG&E, have seen less demand for the fire-threatened SGIP incentives, and still have a collective $200 million-plus available.
CPUC’s decision to earmark more than half of SGIP’s budget for equity-resiliency customers has been controversial. California Sen. Scott Wiener, author of the 2018 law that increased SGIP’s budget through 2024, accused the commission of undermining the program by creating eligibility rules “so restrictive” that the funds for it will “almost certainly be under-utilized.”
But others have championed the carveout for fire and blackout-vulnerable customers. Grid Alternatives, a nonprofit that installs solar and batteries for low-income residents, demanded that the CPUC preserve the funds. Residential solar installer Sunrun has worked with Grid Alternatives to offer free batteries to eligible customers, its first moves into installing standalone batteries without accompanying rooftop solar systems.
Source: Greentech Media
