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Please visit the SGIP Program Metrics page for the current incentive rates, current available funds and step opening dates for all budget categories.

SGIP Background

The Self-Generation Incentive Program (SGIP) was initially conceived as a peak-load reduction program in response to the California energy crisis of 2000-01, during which Californians experienced electrical outages throughout the state. Through Assembly Bill 970, the legislature directed the California Public Utilities Commission (CPUC) to offer financial incentives to electric customers of the major investor-owned utilities to install on-site distributed generation (DG) technologies to offset all or a portion of their energy needs. In 2001, SGIP was established to encourage the development and commercialization of renewable and nonrenewable DG technologies.

In 2011, California Senate Bill 412 modified the primary purpose of SGIP from peak load reduction to greenhouse gas (GHG) emissions reductions and subsequently, the CPUC modified the program's incentive eligibility criteria to support technologies that achieve GHG emissions reductions. Eligible technologies include energy storage, wind turbines, pressure reduction turbines, fuel cells, waste heat capture and combined heat and power, internal combustion engines, microturbines and gas turbines.

In 2014, California Senate Bill 861 extended administration of the SGIP through 2020. In conjunction with this extension of the program, in 2016 the CPUC implemented major program modifications, including a new program structure and incentive rates. The most significant change was the allocation of 75% of the total incentive budget to energy storage technologies.   

Today, SGIP is recognized as one of the longest running distributed generation incentive programs in the country.

SGIP legislative and regulatory history

SGIP has an extensive legislative and regulatory history. The following California Senate and Assembly bills have created, directed and revised the program based on the state's evolving energy policies.

AB 970 (Ducheny, 2000)
  • In response to California’s energy crisis, the legislature called for more distributed generation and demand response
  • CPUC Decision 01-03-073 adopted SGIP in response to AB 970
AB 1685 (Leno, 2003)
  • Extended SGIP through 2007 and established emissions and efficiency requirements for fossil fuel technologies
SB 1 (Murray, 2006)
  • Established California Solar Initiative and removed solar photovoltaic systems from SGIP effective 1/1/2007
AB 2778 (Lieber, 2006)
  • Extended SGIP through 2011
  • Limited technologies to only wind and fuel cells effective 1/1/2008
SB 412 (Kehoe, 2009)
  • Extended SGIP through 2015
  • Defined technologies eligible for the SGIP as those distributed energy resources that the CPUC determined, in consultation with CARB, will achieve reductions in GHG emissions
  • Provided for a total annual SGIP budget of $83 million per year for 2010 and 2011
  • Provided an additional incentive of twenty percent from existing SGIP funds for the installation of eligible DG resources from a California supplier
  • CPUC Decision 11-09-015 adopted SGIP in response to SB 412
  • The SGIP Program Administrators filed advice letters to implement Decision 11-09-015, as well as to propose revisions to incentive amounts and payment structures, warranty requirements and metering and monitoring protocols
AB 1150 (Pérez, 2011)
  • Extended SGIP annual collections of $83 million per year through December 31, 2014
  • Granted the CPUC the authority, in administering the SGIP, to adjust the amount of incentives and evaluate other public policy interests, including, but not limited to, ratepayers, energy efficiency, peak load reduction, load management and environmental interests
  • CPUC Decision 11-12-030 adopted SGIP in response to AB 1150
SB 861 (Committee on Budget and Fiscal Review, 2014)
  • Extended SGIP annual collections through December 31, 2019, and extended administration through 2020
  • In response to SB 861, CPUC Decision 14-12-033 set the budget at $83 million per year for years 2015-2019
AB 1478 (Committee on Budget and Fiscal Review, 2014)
  • Made slight revisions to Public Utilities Code section 379.6. Specified that SGIP-eligible technologies must reduce peak demand, or shift demand to off-peak times
  • In accordance with SB 861 and AB 1478, CPUC Decision 16-06-055 implemented major changes to the SGIP, including administration of the program on a continuous basis, new incentive rates, minimum biogas blending requirements, and other program modifications. Notably, D.16-06-055 allocated 75% of the budget to energy storage technologies and 25% to generation technologies.  
AB 1637 (Low, 2016)
  • Authorized the CPUC to up to double the amount of funds collected for SGIP on an annual basis through 2019
  • In response to AB 1637, CPUC Decision 17-04-017 increased SGIP’s total budget per AB 1637 and allocated additional funding between budget categories and incentive steps. Additionally, it revised incentive amounts for storage projects receiving the federal ITC.