California Regulator Allots $1 Billion for Distributed Energy Projects to Boost Wildfire Resiliency

The California Public Utilities Commission on Jan. 16 approved $830 million in new funding for the Self-Generation Incentive Program, or SGIP, prioritizing energy storage projects for communities most impacted by utilities’ public safety power shutoff events to avoid the risk of power lines starting wildfires. When added to unspent funds from previous years, the decision allocates a total of $1.2 billion in incentives for distributed energy resources under the program. The decision also extends eligibility to customers affected by at least two prior shutoff events.

The agency approved an SGIP annual budget of $166 million for 2020-2024 period, for a total of $830 million. The program earmarks 63 percent to fund equity or resiliency projects; 12 percent for renewable generation, 10 percent for large scale batteries, 7 percent for residential projects, 5 percent for heat pump water heaters, and 3 percent for residential equity projects.

The agency said that local distributed energy resources,such as battery storage and rooftop solar, can provide reliable energy when electricity is shut off to reduce wildfire risks. SGIP equity incentives allow low income and medically vulnerable customers and disadvantaged communities the opportunity to access benefits that would otherwise be unavailable to them due to the relatively high cost of the technology.

The SGIP program, adopted in 2001 to incentivize distributed resources and reduce power demand, has been revised multiple times. In 2016, the legislature authorized the commission to double the collections to $166 million per year through 2026. The agency allocates 85 percent of the funds to battery technologies.