The California legislature has put its stamp of approval on SB 700, a bill that will provide up to $830 million in new incentives to add behind the meter storage to residential and small business solar systems. “What we’re trying to do is create a mainstream market for energy storage, like we’ve done for solar PV,” Bernadette Del Chiaro, executive director of the California Solar & Storage Association, tells Green Tech Media.
Backers of SB 700 call it the “Million Solar Roofs of Energy Storage” bill. They anticipate the legislation will help boost the state’s behind the meter battery storage total to 3,ooo MW by 2026, compared to only 176 MW today.
The official name of the program is the Self Generated Installation Program and it has been around in one form or another since 2006. Companies like Tesla, Stem, Green Charge Networks, and Sunverge have taken advantage of its incentives for systems under 30 kilowatts in size.
The California PUC has amended the program to direct that 75% of the funds be used for energy storage. The application process now favors proposals that feature additional greenhouse gas or grid balancing benefits. The incentives also decrease over the period of the program, a decided advantage for those who want to add battery storage now rather than later.
While behind the meter storage is important, it comes at greater cost than grid-scale storage while giving individual customers greater control over their personal energy usage. However, some industry analysts expect the growing use of time of use rate structures could provide many of the benefits of behind the meter storage without the upfront expense.
“Funding is always a boon for an emerging technology like storage, so an additional infusion of cash will only boost the market,” says Brett Simon, senior energy storage analyst for Wood Mackenzie Power & Renewables.. “However, we’ve seen in recent years that SGIP, while still important, has been less of a factor in California deployments compared to the program’s early years.”
In fact last year, of the 6.5 megawatts of residential storage deployed in California, only 1.6 megawatts were SGIP projects. On the non-residential side, only 17 MW of the 45 megawatts of behind-the-meter storage installed last year received SGIP credits. “We’ve heard from developers and installers that, as storage economics have improved and customer demand has risen, some customers forgo the SGIP,” Simon adds. Many residential customers “just want to get systems installed ASAP, don’t want to worry about additional paperwork and red tape, and are generally emotional buyers anyhow who aren’t concerned with price.”
“That’s not to say SGIP isn’t important,” he cautioned. “But it’s more like just one pillar that’s holding up the California behind-the-meter storage market, rather than the entire foundation.” That being said, California’s approach is far more progressive than what is happening next door in Arizona, where that state’s largest utility is pouring millions of dollars of rate payer cash into a vicious campaign to knock out a grassroots campaign funded by internet billionaire Tom Steyer to force the state to adopt a meaningful renewable energy standard.
“It’s our electricity,” Arizona Public Service, the state’s largest utility company, seems to be saying, “and we will decide how much you use when and at what cost.” The California approach may have some flaws and plenty of critics, especially among Republicans, but it is preferable to the head in the sand, take us back to the glory days of the 1930s approach put forward by APS and its supporters.
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