California Taking Charge of Energy Storage As Policies and Incentives Align for Success Progressive actions shaping the potential of energy storage
California is again poised to lead the nation in sustainable energy development with recent legislation and regulations clearing the way for advanced energy storage and, most importantly, an extended incentive program with funds to support it.
Similar to California's experience with solar energy during the past decade, the state's market for energy storage is now primed for greater success, according to Rebecca Feuerlicht, a distributed generation project manager at the California Center for Sustainable Energy in San Diego.
"Energy storage is the mechanism needed to allow California to fully maximize the benefits of renewable generation, reduce fossil fuel use and GHG emissions and eliminate inefficient ramping up and down of existing power plants," Feuerlicht said.
California has a long history of policies and initiatives that support renewable energy and a cleaner, more reliable grid. Since the California Solar Initiative (CSI) rebate program launched in 2007, state energy consumers have added some 140,000 solar photovoltaic (PV) systems through the program, amounting to more than 1,500 megawatts, a sevenfold increase in the total amount of installed solar.
Even though CSI rebate amounts have declined and soon will run out, a strong solar market continues thanks to lower per-watt installation costs, long-term leasing agreements and creative energy loans, according to Feuerlicht. She is optimistic that the energy storage market is set to follow a similar path with strong regulatory and legislative support.
In October 2013, the California Public Utilities Commission set a specific target for California's investor-owned utilities (IOUs) to procure 1.325 gigawatts of energy storage by 2020 that requires them to set individual storage procurement goals beginning this year. In May, the commission followed up with a ruling that energy storage systems paired with net energy metering-eligible technologies, such as solar PV, are exempt from interconnection application fees, supplemental review fees and standby charges, which were restraining energy storage growth.
California's energy storage market received a boost on the legislative side in mid-June when Governor Jerry Brown authorized renewal of the state's Self-Generation Incentive Program (SGIP), the nation's longest-running distributed generation rebate initiative, through 2019. It was due to sunset in 2015. The extension comes with $83 million per year for behind-the-meter generation technologies, including standalone and PV-paired energy storage systems. Since 2011, SGIP has received more than 55 MW of energy storage system incentive applications, however, only 3 MW were installed at the start of 2014.