Program Overview

The Self-Generation Incentive Program ( SGIP) was extensively changed in September 2011 as a result of implementation of California SB 412 (Statutes of 2009, Chapter 182), which modified the primary purpose of the program from peak load reduction to greenhouse gas ( GHG) emissions reductions. SB 412 also extended SGIP until January 1, 2016.

The following program description reflects the changes as directed by the California Public Utilities Commission ( CPUC) in Decision 11-09-015 and will apply to all SGIP projects going forward. Existing SGIP projects will continue to operate under rules that existed when the project was reserved.

The following outline gives an overview of the SGIP program. For a detailed description of program policies and procedures, please view the SGIP Handbook.

Eligibility

Eligibility for participation in the SGIP is based on greenhouse gas emission reductions. The actual on-site emission rate that projects must beat to be eligible for SGIP participation is 379 kg CO2/ MWh.

The eligible technologies include wind turbines, fuel cells, gas turbines, microturbines and internal combustion engines, organic Rankine cycle/waste heat capture, combined heat
and power ( CHP), advanced energy storage (AES) and pressure reduction turbines. AES is eligible as stand-alone as well as coupled with solar PV or other SGIP-eligible technologies and must be able to discharge its rated capacity for a minimum of two hours. On-site or in-state directed biogas is eligible as an adder that may be used in conjunction with fuel cells or any conventional CHP technology.

Only self-generation equipment installed on the customer’s side of the electric utility meter is eligible. Typically, equipment must be sized to serve all or a portion of the electrical load at the site.

Only commercially available and factory new equipment is eligible for incentives. Rebuilt or refurbished equipment is not eligible to receive incentives under this program.

Any retail electric or gas distribution customer of PG&E, SCE, SoCalGas or SDG&E is eligible to apply as the host customer and receive incentives from the SGIP. The host customer must be the utility customer of record at the site where the generating equipment is or will be located.
Any class of customer (industrial, agricultural, commercial or residential) is eligible to be a host customer in SGIP.

System Sizing

There are no minimum or maximum size restrictions given that the project meets on-site load.

Incentive Levels and Payments

The table below shows eligible self-generation technologies and associated incentive levels:

2013 Incentive Levels for Eligible Technologies¹

Technology Type	Incentive ($/W)
Renewable and Waste Energy Recovery
Wind Turbine	$1.19
Waste Heat to Power	$1.19
Pressure Reduction Turbine	$1.19
Non-Renewable Conventional CHP
Internal Combustion Engine - CHP	$0.48
Microturbine - CHP	$0.48
Gas Turbine - CHP	$0.48
Emerging Technologies
Advanced Energy Storage²	$1.80
Biogas ³	$2.03
Fuel Cell - CHP or Electric-Only	$1.80

¹ An additional incentive of 20 percent will be provided for the installation of eligible technologies from a California Supplier.
² Stand-alone as well as coupled with solar PV or another SGIP-eligible technology.
³ The biogas incentive is an adder that may be used in conjunction with fuel cells or any conventional CHP technology.

SGIP incentive levels will decline annually. Incentives for renewable, waste energy recovery and conventional combined heat and power ( CHP) technologies will decline by 5% annually. Incentives for emerging technologies will decline 10% annually.

Projects under 30 kW in size will only receive an up-front incentive. For projects that are larger than 30 kW, SGIP will pay 50% of the incentive up front and the remaining 50% will be covered under a performance-based incentive ( PBI). The PBI payment will be paid annually for a period of five years based on recorded kWh of electricity produced over the previous 12 months.
PBI payments will be reduced or eliminated in years that a project does not achieve cumulative greenhouse gas reductions.

While SGIP projects are not capped at a maximum system size, incentives are only paid for the first 3 MWs of a project. After the first MW, the incentive is tiered as specified in the table below:

Tiered Incentive Rates

Capacity	Incentive Rate
0 MW – 1 MW	100%
1 MW – 2 MW	50%
2 MW – 3 MW	25%

The maximum incentive amount per project is $5 million. Additionally, applicants must pay a minimum of 40% of eligible project costs, which implies that the incentive cannot exceed 30% of total project cost if the system owner is eligilble to take advantage of the 30% federal Investment Tax Credit.

Budget

The annual statewide incentive budget for program years 2011-2014 authorized by the CPUC is $74.7 million. CCSE’s share of the statewide incentive budget amounts to approximately $10 million.

The SGIP budget is divided into two categories: 75% of the incentive budget will be dedicated to the renewable and emerging technology category, and 25% will be dedicated to the nonrenewable category.

In an effort to diversify the ratepayer portfolio of distributed energy resources and reduce over-exposure to any one product or developer, any single equipment manufacturer under the SGIP is limited to 40% of the annual statewide SGIP budget. The annual statewide SGIP budget is defined as the authorized budget allocation plus carry-over funds from previous program years. The SGIP manufacturer concentration limit for Program Year 2013 amounts to $64,527,148. Program Administrators will not accept applications from manufacturers that have reached this limit.

California Center for Sustainable Energy