The Self-Generation Incentive Program stopped accepting ratepayer-funded applications on December 30. Its statutory authority to operate expired on January 1.
If you search for California battery storage incentives this month, you will still find a substantial number of pages describing SGIP as available and explaining how to apply. Those pages are now wrong, and some of them will stay wrong for a long time.
This post is a plain accounting of what happened, what remains, and what it means if you were carrying an SGIP line in a project budget.
SGIP began in 2001 under AB 970, created in response to the energy crisis of 2000 and 2001. It was originally aimed at distributed generation: fuel cells, microturbines, small wind, internal combustion engines. SB 412 reoriented it toward greenhouse gas reduction in 2011. The decisive turn came in 2016, when the CPUC allocated 75 percent of the incentive budget to energy storage. In the most recent program period that share reached 88 percent.
SB 700, enacted in 2018, extended the program and set the dates that have now closed it. Public Utilities Code Section 379.6 authorized annual ratepayer collections through December 31, 2024, and required the Commission to administer the program until January 1, 2026. The statute goes on to direct that on January 1, 2026, the Commission “shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs.”
Those are two dates doing two different jobs. Collections stopped at the end of 2024. Administration authority ran one further year and then expired.
The program did not run out of money in the ordinary sense. It ran out of statute.
Decision 25-12-003, adopted December 4 and issued the following day, is the governing document. It is explicitly a closure decision, establishing the conditions for returning ratepayer funds and closing out ratepayer-funded activity, and setting terms for the remaining state-funded portion.
The timeline it establishes runs as follows. December 30, 2025 was the final day to submit ratepayer-funded applications, and waitlists closed the same day. The state-funded residential equity budget closes to new applications June 30, 2028. A final impact evaluation report is due in 2032. Program administrators return remaining funds in January 2033 and cease all SGIP administrative activity in February 2033.
The decision also shortened the performance-based incentive term from five years to two for projects entering that structure after December 30, 2025, while existing PBI projects keep their original five-year terms. It provided additional six-month extensions for qualifying non-residential equity projects that meet proof-of-project milestones and commit to demand response participation.
One category, and it is not one most commercial, agricultural, or municipal customers can use.
Residential Solar and Storage Equity is funded not by ratepayers but by a $280 million appropriation from the state Greenhouse Gas Reduction Fund. It opened for reservations in June 2025, with incentive rates of $1,100 per kWh of storage and $3,100 per kW of solar, calibrated to cover roughly the full cost of a paired residential system for qualifying low-income households.
It is a residential program with income eligibility requirements. It is not a substitute for the general market and non-residential categories that have closed.
A detail worth understanding, because it will generate questions.
Several closed categories still show unspent balances. That money is not available for redeployment. Under the statute and Decision 25-12-003, unspent ratepayer funds above a $1 million threshold return to ratepayers through annual rate true-up.
This is the statute working as written. Section 379.6 directs repayment of unallocated funds to reduce ratepayer costs. But it does mean that a project that missed the December application deadline cannot be accommodated out of a balance that visibly exists.
There was, and it did not succeed.
SB 453 is the bill people point to. As amended in May 2025 it was titled “Self-generation incentive program: microgrid incentive program,” amended Section 379.6 directly, and would have extended the program to January 1, 2028 while redirecting unallocated funds toward areas experiencing repeated de-energization events.
A July 2025 amendment stripped all of that. The current version is titled simply “Microgrid incentive program,” adds a new Section 8371.6, and does not amend Section 379.6 or extend SGIP.
We are also not aware of any CPUC proceeding establishing a successor distributed storage incentive program.
If you hold an existing reservation, it remains valid subject to the standard milestone and extension rules. The default structure allows three six-month extensions before automatic expiration, with an expanded allowance for qualifying non-residential equity projects. If your project is at risk of missing a milestone, the extension process is what to be managing right now, this quarter.
If you were planning to apply, the ratepayer-funded incentive you were modeling no longer exists. We say that plainly because we are still seeing project pro formas that carry an SGIP line.
If you are re-underwriting a project that no longer pencils, the stack has changed rather than disappeared. The federal investment tax credit remains available for storage on a long runway, unaffected by the wind and solar termination provisions enacted last summer, and public agencies can monetize it through elective pay rather than needing a tax appetite. One hundred percent bonus depreciation is permanent. Demand charge management, resource adequacy value, and resilience against de-energization remain real, and for agricultural water pumping loads in particular they are usually the larger part of the case anyway.
The honest summary is that California has removed a subsidy that made marginal storage projects work, at roughly the same moment federal rules got more restrictive about where the batteries can come from. Projects that penciled on the incentive alone will not pencil. Projects with a genuine operational case still do, and for our water district clients that case has generally rested on demand charges and outage exposure rather than on SGIP.
We wrote this post partly because the search results on this topic are unusually poor. A large share of the pages ranking for California storage incentives right now are installer marketing content that has not been updated and still describes SGIP as open with funding available.
Everything above is drawn from the statute, the CPUC decision, and the program administrators’ own status pages. If someone shows you an SGIP incentive in a proposal this year, the statewide program metrics page is the place to verify it, and it is public.
