Program Overview
SGIP was established by the California Public Utilities Commission (CPUC) to support the adoption of distributed energy resources, with a particular focus on energy storage systems. The program provides upfront rebates that directly reduce the cost of qualifying battery installations for California ratepayers served by Pacific Gas and Electric (PG&E), Southern California Edison (SCE), Southern California Gas (SoCalGas), and San Diego Gas & Electric (SDG&E).
As of 2026, SGIP continues to prioritize grid resiliency and equity, with enhanced incentive rates available for specific customer categories and geographic areas.
Incentive Structure for 2026
SGIP incentives are calculated on a per-kilowatt-hour (kWh) basis, with rates varying by customer category and budget step. The program operates in budget steps, with incentive rates declining as each step is exhausted. As of 2026, key incentive categories include:
- General Market Residential: Base incentive rates for standard residential customers
- Equity Budget: Enhanced rates for customers in disadvantaged communities or low-income households
- Equity Resiliency Budget: Highest incentive rates for qualifying customers in high fire-threat districts
Equity and Resiliency Adders
A significant feature of SGIP is its equity-focused incentive structure. The program provides substantially higher rebate rates for specific categories of customers who may benefit most from backup power capabilities:
- Low-Income Customers: Households enrolled in utility low-income programs (CARE, FERA) or with income below 80% of area median income
- Medical Baseline Customers: Customers with medical equipment requiring electricity
- High Fire-Threat District Residents: Customers located in Tier 2 or Tier 3 high fire-threat districts as designated by the CPUC
- Customers Experiencing Multiple PSPS Events: Those who have experienced two or more Public Safety Power Shutoffs
For qualifying equity and resiliency customers, SGIP incentives can cover a substantial portion of battery system costs, sometimes approaching or exceeding 85% of eligible expenses when combined with federal tax credits.
Eligibility Requirements
To qualify for SGIP incentives, applicants must meet several requirements:
- Be a customer of a participating California investor-owned utility
- Install a qualifying energy storage system meeting program technical requirements
- Use an approved SGIP developer and installer
- Meet cycling and operational requirements (batteries must charge primarily from renewable sources)
- Complete installation within program timelines after reservation
Application Process
The SGIP application process involves several steps:
- Step 1: Work with an approved SGIP developer to design your system
- Step 2: Developer submits a reservation request on your behalf
- Step 3: Upon reservation approval, complete installation within the specified timeline
- Step 4: Developer submits proof of installation and incentive claim
- Step 5: Receive incentive payment (typically applied to system cost)
Stacking with Federal Incentives
SGIP incentives can typically be combined with the federal Investment Tax Credit (ITC), though specific rules apply. The ITC is calculated based on the net cost of the system after SGIP rebates are applied. This stacking can result in substantial total savings, potentially reducing battery system costs by 50% or more for qualifying customers.
Homeowners should work with qualified installers and tax professionals to understand how incentive stacking affects their specific situation.
Program Budget and Availability
SGIP operates with allocated budget that may be depleted before program expiration. Budget availability varies by utility territory and customer category. Equity and resiliency budgets often have stronger funding availability compared to general market budgets. Prospective applicants should verify current budget status with their utility or an approved SGIP developer.
Important Notes
Program terms, incentive rates, and eligibility requirements are subject to change. The information provided reflects program structure as of 2026 and should be verified with official CPUC or utility sources. Working with an experienced SGIP developer ensures access to current program requirements and available incentives.