Schwarzenegger Holds Press Conference On Passing Of California BudgetCalifornia continues to pave the way for unique legislation concerning energy infrastructure. A new bill that has already partially passed in the State Senate will authorize rebates for the installation of energy storage systems. The Senate’s energy and utilities committee voted 7-2 in favor of the bill, with two abstentions. Now the full Senate will consider the merits and vote.

SB 700 would require utility companies to collect even more funds from ratepayers to help establish an Energy Storage Initiative, an ESI. This ESI would work in conjunction with the existing Self Generation Incentive Program that has been so successful in California. The ESI would need to be funded through 2027.

In addition, the bill calls for 25% of the funds collected for the initiative to be allocated towards low incomes neighborhoods and job training programs. This provision was included out of fear that the energy incentive programs are not reaching all members of the community equally – the “market transformation” programs must do so to be effective. Low-income customers pay a higher percentage of their incomes to their utility bills.

The largest energy storage market in the nation can be found in California – largely because the state has mandated the implementation of storage solutions for most utilities, while also incentivizing deployment for end users.

In 2016, the state of California passed four bills to help encourage storage. These bills did everything from raise the funding provided to the SGIP, to reallocating existing funds to different purposes, to mandating the number of megawatt/hours of storage each utility must create. These bills each played a part in accelerating the growth of the energy storage market. But still missing from equation are incentives that would be paired with solar power installations outside of the SGIP. To date, the program has been mostly used to deploy C&I storage assets.

The proponents of SB 700 hope that this gap in the equation will be filled. The establishment of this new rebate program would incentivize the implementation of solar-plus-storage systems. As it stands, the SGIP and the California Solar Initiative provide rebates for standalone BTM solar installations. However, the new bill would work in combination with the aforementioned groups to grow the breadth of those rebates.

If the bill ends up passing, current energy storage systems that may be eligible for rebates (according to the SGIP) would be transferred to the new ESI program; they would lose their eligibility under the old program. SB 700 would also cut the amount of money utilities have to pay ratepayers under the SGIP by the amount equal to what they would receive from the ESI.

The bill requires that the California Public Utilities Commission establish and erect the ESI by December 1st, 2018. It would run until 2027, which is a longer timeframe than the SGIP – currently, the latter is funded through 2020.

As the debate over the bill continues, the SGIP program has remained the most lucrative state incentive program for energy storage in the entire country. Another round of applications were made available on Monday, May 1st, but an additional four rounds of applications will be open in the near future. There is currently a $400 million budget that runs through 2019.