About the Self-Generation Incentive Program

The Self Generation Incentive Program (SGIP) is one of the longest-running and most successful distributed generation incentive programs in the country.  As of December, 2016, SGIP has funded 2,178 completed projects representing over 450 MW of rated capacity. An additional 312 projects representing over 178 MW of rated capacity are in process towards completion. The program continues to make strides towards a cleaner, distributed-energy future.

The SGIP was initially conceived of as a peak-load reduction program in response to the energy crisis of 2001. Assembly Bill 970 (Ducheny, 2000) designed the Program as a complement to the California Energy Commissions’ Emerging Renewables Program, which focused on smaller systems than the SGIP. Since 2001, the SGIP has evolved significantly. It no longer supports solar photovoltaic technologies, which were moved under the purview of the California Solar Initiative after its launch in 2006. It has also been modified to include energy storage technologies, to support larger projects, and to provide an additional 20% bonus for California-supplied products.

Senate Bill 412 (Kehoe, 2009) modified the focus on the Program to include greenhouse gas reductions. Specifically, this bill directed the Commission, in consultation with the Air Resources Board, to identify distributed energy resources which will contribute to greenhouse gas reduction goals and to set appropriate incentive levels to encourage their adoption. The Commission took this opportunity to expand the portfolio of eligible technologies, modify the incentive approach, and to enact other operational requirements including warrantees and performance monitoring to ensure greenhouse gas reductions.

SGIP was significantly modified by D.16-06-055 to reflect changing conditions and priorities with respect to the program.  The changes made by D.16-06-055 include the allocation of 75% of the incentive budget to energy storage projects, capping each technology developer to no more of 20% each of the incentives for large-scale energy storage, residential energy storage and generation, the creation of a step system for incentives and the creation of a lottery system for allocating incentives to projects when a given step is oversubscribed.

The Self-Generation Incentive Program will offer incentives to energy storage systems based on several factors, including the kilowatt-hour (kWh) capacity of the system. The incentive amount offered to new storage customers will decline over time as the market matures to ensure efficient use of these ratepayer-funded incentives. Each incentive level is known as a “step,” and a certain amount of money is reserved for each step. On a statewide basis, approximately $40 million has been reserved for energy storage systems in each step. There will be five steps for energy storage systems.

The table below illustrates the planned incentive steps for residential energy storage systems 10 kilowatts (kW) in size or less. For systems above 10kW, please refer to the SGIP Handbook available at this webpage for more details on the incentive levels that apply (the 2017 version of the SGIP Handbook may not be posted until March, 2017).

Residential Energy Storage Systems less than or equal to 10kW in size

Incentive rate per Watt-hour (see important disclaimer below)

Step 1

50 cents/Watt-hour

Step 2

45 cents/Watt-hour

Step 3

40 cents/Watt-hour

Step 4

35 cents/Watt-hour

Step 5

30 cents/Watt-hour


Step 1 will commence when the program reopens in spring 2017. Each subsequent step will begin once the previous step’s budget is extinguished.

IMPORTANT DISCLAIMER: The amount of incentive decrease between steps can accelerate if a step extinguishes the entirety of its budget in 10 days or less. In that event, the decrease between steps is 10 cents/Watt-hour rather than 5 cents/Watt-hour. For example, if Step 1 extinguishes its budget within 10 days of its opening date, then the Step 2 incentive rate will be 40 cents/Watt-hour rather than 45 cents/Watt-hour.

Contact Us

  • If you have any questions about the SGIP, please contact the Program Administrator for your utility as identified under the Applying for SGIP Incentives section of the main SGIP page


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