SGIP Explained: What’s In, Out, and Missing In the Newly Expanded Program

The California Public Utilities Commission’s (CPUC) recent decision to modify and expand the Self Generation Incentive Program (SGIP) was news that was welcomed by the Distributed Generation (DG) and Combined Heat and Power (CHP) industries. Now, the fun part, understanding what was modified, added, removed, etc. from the program.


Here’s a quick tutorial based on our reading, understanding, and analysis of the recent decision. You can do what we did and read the documents yourself or you can get a quick snapshot below. Please note: Some decisions are still under evaluation and will require further discussion at CPUC-sponsored workshops. However, what’s summarized below is the CPUC’s current position on SGIP.


The decision expanded the list of eligible technologies from an extremely limited list to now include wind turbines, fuel cells, gas turbines, micro-turbines and internal-combustion (IC) engines, organic Rankine cycle / waste-heat capture, combined heat and power (CHP), advanced energy storage (AES), and pressure reduction turbines. The CPUC removed solar technologies from the SGIP and established its own separate program. All of these technologies are eligible to receive up-front and performance-based incentives (PBI) —50% upfront, 50% PBI—based on kWh generation of on-site load.


The goal for all of these technologies is to help California reduce its greenhouse gas emissions (GHG baseline is 349 kg CO2/MWh), and use the power “inside the fence” as opposed to exporting/selling it to the utility (up to 25% can be exported). A PBI will be based on a technology’s performance in meeting these goals.  


The maximum total incentives per watt of capacity that each technology may receive are summarized in the table below:

In addition to expanding the program to include a more comprehensive list of DG and CHP technologies, and specifying new incentive amounts, the CPUC also made some important decisions regarding metering and warranty requirements, budget allocation among eligible technologies, and eligibility requirements.

Here’s a quick summary of those key decisions:


Metering Requirements
SGIP now requires that all SGIP facilities, as a condition of receiving incentives, must install metering equipment capable of measuring and recording 15-minute interval data on electrical generation out, and (where applicable) fuel input, heat output (for CHP), and storage system charging and discharging.


They must also  report the data to the Program Administrator (a.k.a. your utility) on a quarterly basis for the first five years of operation. The owner, manufacturer or contractor can fulfill this responsibility.


There is still some debate on who carries the cost of monitoring the equipment that hasn’t yet been resolved.


Warranty Requirements
It’s not final yet, but the SGIP plans to hold a workshop to discuss its recommendation to have a 10-year service warranty. Currently, the SGIP only requires projects have a 5-year warranty on parts.


Budget Allocation
The budget is broken down into 75% for renewable and emerging technologies and 25% non-renewable.  There’s a supplier concentration as well. No more than 40% of the annual statewide budget may be allocated to any single manufacturer’s technology during a calendar year. The maximum project incentive is $5 million.


How does this impact the Leva Energy Power Burner?
The newly expanded SGIP sweetens the already sweet opportunity for boiler owners in California who are under the gun to meet ultra-low NOx emission regulations. The Leva Energy Power Burner qualifies for a $500/kW rebate meaning that your business or institution can receive up to $50,000 back in your pocket. That’s on top of the already attractive value proposition that the Power Burner provides (~$0.065 / kWh LCOE).