California lawmakers have extended a program that supports energy storage by five years, a move that advocates estimate will spur about 3,000 megawatts of new behind-the-meter storage.
The bill — S.B. 700 — gives new life to the California Public Utilities Commission’s Self-Generation Incentive Program, which was set to expire at the end of 2020. The program allows California’s investor-owned utilities to collect $166 million a year for incentives that mainly support energy storage.
The bill, which is waiting to be signed by California Gov. Jerry Brown, would provide about $800 million in incentives through 2025.
The measure will create demand for energy storage and help the industry become more mature much like state incentives for rooftop solar did, according to the California Solar and Storage Association.
The SGIP program has been refined and extended several times since it was started in 2001 in response to the Western Energy Crisis, according to an analysis prepared by staff for the California Assembly. Two years ago, for example, the PUC was given the authority to double the program’s incentives from $83 million a year.
So far, the SGIP program has supported 318 MW in behind-the-meter storage, according to Janice Lin, co-founder and chair of Energy Storage North America, an annual conference for the storage industry.
According to the PUC, eligible technologies include wind turbines, waste heat-to-power, pressure reduction turbines, internal combustion engines, microturbines, gas turbines, fuel cells and advanced energy storage systems. However, 85 percent of the program’s funds are spent on energy storage.
The just-passed legislation bars funds from being spent on fossil-fuel technologies starting in 2020 and requires that storage systems that receive incentives cut greenhouse gas emissions.
Last year, the PUC ordered that a quarter of the energy storage incentives be steered to low income households and environmentally burdened communities. Eligible customers include state and local government agencies, educational institutions, non-profits and small businesses, according to the PUC.
San Diego Gas & Electric Co. and Southern California Gas opposed the bill, saying it tended to support wealthier customers who could afford distributed resources and that subsidized resources should stand on their own, according to the bill analysis.