California Bill’s Passage Boosts Prospects for a Smarter, Cleaner Energy Future

California Governor Jerry Brown and the state legislature breathed new life into the state’s pioneering clean energy storage initiatives this past weekend, allocating $415 million to keep the Self-Generation Incentive Program (SGIP) running through 2019.

A core aspect of California’s drive to reduce greenhouse gas emissions and develop a more distributed and cleaner energy economy, SGIP provides incentives, in the form of rebates, to small- and medium-sized businesses (SMBs) who install any of a range of “behind the meter” energy efficiency and advanced energy storage/management systems, such as Green Charge’s GreenStationTM.

Landmark California legislation enacted in October, 2013 – Assembly Bill 2514 (AB2514) – sets annual energy storage capacity procurement targets for the state’s investor-owned utilities (IOUs). AB 2514 requires they acquire a total 1.325 gigawatts (GW) of energy storage capacity by 2020.

Fostering adoption of intelligent energy storage solutions among small to medium sized commercial, industrial and residential utility customers, SGIP plays a key role in realizing the goals set out in AB 2514, “landmark legislation that will create a smarter, cleaner electric grid, increase the use of renewable energy, save Californians money by avoiding costly new power plants, and reduce greenhouse gas emissions and other harmful air pollutants through the use of energy storage technologies by utility companies.”

Run by the California Public Utilities Commission (CPUC), SGIP provides “rebates for qualifying distributed energy systems installed on the customer-side of the utility meter.” In addition to wind turbines, waste heat-to-power systems, pressure reduction turbines, internal combustion engines, microturbines and fuel cells, qualifying SGIP technologies include advanced energy storage systems, which are poised to play a significant role in the emergence of clean, renewable California energy ecosystem.

As explained in SB 861, Section 156:

“It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage systems to facilitate the integration of those resources into the electrical grid, improve efficiency and reliability of the distribution and transmission system, and reduce emissions of greenhouse gases, peak demand, and ratepayer costs. It is the further intent of the Legislature that the commission, in future proceedings, provide for an equitable distribution of the costs and benefits of the program.”

With SGIP funding due to expire by the end of this fiscal year, Gov. Brown’s enactment of SB861 – a sweeping Public Resources trailer bill – maintains SGIP’s annual budget at $83 million for the next five years. As it has turned out, SGIP has received more rebate requests for energy storage systems ($53 million, 34 percent of the total) than any other eligible distributed energy technology over the course of 2012, according to CPUC’s latest, publicly released SGIP Budget Review. SGIP requests for combined heat-and-power (CHP) fuel cells followed a close second with $52 million (33 percent of total SGIP requests).

While the majority of SGIP energy storage applications were submitted by “just a handful of developers,” the variety of applications ranged from peak load shifting and demand reduction to back-up power generation and electric vehicle (EV) charging.

The average storage size of SGIP advanced energy storage rebate requests ranged between 5 to 25 kilowatts (kW), which, SGIP notes, “is relatively small compared to the average size of other participating SGIP technologies.” As a result, SGIP energy storage requests accounted for just 27 percent of overall funding during 2011-2012 but over 80 percent of SGIP application volume.

Co-founder of the California Energy Storage Alliance (CESA) Janice Lin explains the critical role SGIP is playing in fostering development of innovative energy storage solutions that can lead to a cleaner, healthier environment, reduce electricity costs, and create “green collar” employment opportunities.

Peak power demand charges in California are among the highest in the nation, and, in contrast to standard household rates, they are on the rise. By installing intelligent energy storage and management solutions such as Green Charge’s GreenStationTM, a growing list of businesses, municipalities and educational organizations are realizing substantial savings on their utility bills.

The economics for GreenStationTM installations in California make sense not only because of SGIP, but because Green Charge’s Power Efficiency Agreements offer a financing option with no upfront cost, no risk, and just savings. Pioneering programs such as SGIP and legislation such as AB 2514 and SB 861 strengthen the economic case for making use of intelligent energy storage solutions. And they’re critical to the emergence of a healthier, sustainable clean energy economy and society.