SGIP 2025 Guide: How California’s New Solar + Battery Incentives Can Cover Up to 100% of Your Costs

California’s Self-Generation Incentive Program (SGIP) is entering its most equity-focused chapter ever.

Starting June 2, 2025, a new $280 million Residential Solar and Storage Equity budget will offer the highest battery and solar incentives in SGIP history:

• $1,100 per kWh for battery storage

• $3,100 per kW for solar

• In many cases, up to 100% of installation costs covered when combined with the 30% federal Investment Tax Credit (ITC) and other Inflation Reduction Act (IRA) bonuses.

Whether you’re a homeowner, a church, or a commercial property owner, SGIP can dramatically lower the cost of energy storage and solar—if you know which budget you qualify for and how to apply correctly.

This guide from Raya Solar breaks down how SGIP works in 2025, who qualifies for the new equity incentives, and how to stack SGIP with federal tax credits to maximize savings.

Key Takeaways for SGIP in 2025

• Record-High Equity Incentives:

  The new Residential Solar & Storage Equity budget launches June 2, 2025 with $1,100/kWh for storage and $3,100/kW for solar—often enough to fully cover system costs for qualifying low-income households when combined with federal incentives.

• Choosing the Right Budget Is Everything:

  SGIP incentive rates range from about $150/kWh in general market categories to $1,100/kWh in equity categories. The right budget can be the difference between 15% vs. 100% cost coverage for nearly identical systems.

• 10-Year Compliance Matters:

  SGIP’s 10-year permanency requirement and 52 required discharge cycles per year mean that correct system sizing, quality monitoring, and a reputable contractor are essential to avoid penalties and keep your savings.

• Federal + State Stacking = Huge Savings:

  When you combine SGIP with the 30% federal Investment Tax Credit (ITC) (through 2032) and potential IRA adders, California homeowners and businesses may see the best distributed energy economics in state history.

What Is SGIP? A 2025 Overview

The Self-Generation Incentive Program (SGIP) is California’s flagship incentive program for customer-side distributed energy resources—primarily battery storage and, increasingly in 2025, solar + storage in equity categories.

• Launched: 2001

• Administered by: California Public Utilities Commission (CPUC)

• Program Administrators:

  
  

  • PG&E

  • Southern California Edison (SCE)

  • San Diego Gas & Electric (SDG&E) / Center for Sustainable Energy

  • Southern California Gas Company (SoCalGas)

  • LADWP (joining in 2025 for certain equity budgets)

  
  

SGIP by the Numbers

• Over $1.5 billion in incentives awarded since inception

• 25,000+ energy storage projects completed

• 500+ MW of distributed energy capacity installed

• $280 million allocated to the new Residential Solar & Storage Equity budget in 2025

If you live or operate in PG&E, SCE, SDG&E, SoCalGas, or LADWP territory, SGIP is likely relevant to you.

SGIP Budget Categories & Incentive Rates in 2025

SGIP is divided into budget categories, each with its own incentive levels and eligibility rules. Understanding which bucket you fit into is the first step to maximizing your rebate.

1. Residential Solar & Storage Equity Budget (New in 2025)

This is the headline change for 2025—and the richest incentive in SGIP history.

• Storage Incentive: $1,100 per kWh

• Solar Incentive: $3,100 per kW

• Total Coverage: Often up to 100% of installed cost when combined with the 30% ITC and potential IRA adders

• Launch Date: June 2, 2025

• Availability: Statewide, including Community Choice Aggregators and certain municipal utilities (e.g., LADWP focus areas)

This budget is designed to eliminate upfront cost as a barrier for qualified low-income households, making solar + storage realistically accessible for the first time.

2. Equity Resiliency Budget

The Equity Resiliency budget targets customers with high vulnerability to outages, fire risk, and other climate-related events.

• Incentive: $1,000 per kWh

• Typical Coverage: About 80–100% of system costs

• Who It’s For:

  
  

  • Homes or facilities in Tier 2 or Tier 3 High Fire Threat Districts (HFTD)

  • Areas with repeated PSPS (Public Safety Power Shutoff) events

  • Customers on Medical Baseline, low-income households, or those reliant on electric well pumps

  
  

• Status: Some territories have limited availability and waitlists—timing is critical.

This budget is especially relevant for high fire risk communities, critical facilities, churches, and community centers that need reliable backup power.

3. Los Angeles County Programs

A special carve-out exists for disadvantaged communities in Los Angeles County.

• Residential Storage: $1,100 per kWh (through 2025)

• Non-Residential (SCE): $1,000 per kWh

• Eligible Counties: Los Angeles (specific ZIP codes)

These programs are designed to address historic underinvestment in rural and low-income Los Angeles communities.

4. General Market Categories

For customers who don’t meet equity criteria, general market categories still offer meaningful savings.

• Small Residential Storage:

  
  

  • $150 per kWh (often ~15% of system cost)

  
  

• Non-Residential Equity (for qualifying businesses / nonprofits):

  
  

  • $850 per kWh

  
  

• Large-Scale Commercial Storage:

  
  

  • $250 per kWh

  
  

• Qualifying Generation Technologies:

  
  

  • Up to $2,000 per kW for fuel cells, wind, and some CHP technologies

  
  

While these incentives are lower than equity programs, they can still significantly improve payback periods, especially for time-of-use and demand charge management.

What Technologies Qualify for SGIP?

In 2025, SGIP is heavily focused on battery storage—but several technologies are eligible.

Primary Eligible Technologies

• Advanced Energy Storage Systems:

  
  

  • Lithium-ion batteries

  • Flow batteries

  • Other CPUC-approved storage technologies

  
  

• Solar + Storage (especially in equity categories):

  
  

  • Systems where solar and batteries are installed together to maximize incentives and qualify for the ITC

  
  

• Other Eligible Technologies:

  
  

  • Fuel cells

  • Small wind turbines

  • Waste heat-to-power / CHP

  • Microturbines and gas turbines

  
  

System Sizing Rules

• Residential Storage (most budgets):

  
  

  • Typically up to 20 kWh

  
  

• Residential Solar & Storage Equity:

  
  

  • Up to 30 kWh of storage

  • Solar generally sized to match annual usage

  
  

• Non-Residential:

  
  

  • No hard size cap, but larger systems use a three-step application and more documentation

  
  

All systems must meet minimum performance standards and California Energy Commission requirements.

SGIP Eligibility Requirements by Budget

Each SGIP budget has its own set of rules. Getting these right is crucial for qualifying.

Residential Solar & Storage Equity Eligibility

To qualify for the top-tier incentives in 2025, applicants typically must:

• Have household income at or below 80% of Area Median Income (AMI)

• Participate in programs like CARE, FERA, or Energy Savings Assistance

• Provide income verification (tax returns or other approved documentation)

• Be located anywhere in California (statewide access, including CCA and some municipal areas)

• Renters may qualify with landlord approval and 10-year site permanency.

Equity Resiliency Eligibility

Equity Resiliency is based on a mix of location risk and vulnerability factors.

You generally must meet at least one location requirement such as:

• Living in a Tier 2 or Tier 3 High Fire Threat District

• Experiencing 2+ PSPS events

• Experiencing 5+ Enhanced Powerline Safety Setting (EPSS) outages since 2023

And at least one additional qualifier, such as:

• Enrollment in Medical Baseline

• Income at or below 80% AMI

• Relying on an electric well pump for water

• Participation in SASH or DAC-SASH solar programs

• Participation in Energy Savings Assistance (ESA)

General Market Eligibility

For general market SGIP categories, eligibility is more straightforward:

• You must be a customer of a participating utility (PG&E, SCE, SDG&E, SoCalGas, or soon LADWP for select programs)

• You must enroll in an approved demand response program

• If you have solar, you must be on Net Billing Tariff or a Solar Billing Plan

• The customer typically must own the system (many lease models are not eligible)

How the SGIP Application Process Works (2025)

The SGIP process varies by system size and customer type. Most homeowners and smaller facilities use a two-step process. Large commercial projects use three steps.

Good news: A qualified SGIP contractor will usually handle this entire process for you.

Two-Step SGIP Process (Most Residential Projects)

Step 1 – Reservation Request Form (RRF)

• Submit application + eligibility documentation

• Provide system details (size, equipment, location)

• Receive a Confirmed Reservation Letter when approved

• Some equity customers may receive up to 50% of incentives upfront via the Advanced Payment option

Step 2 – Incentive Claim Form (ICF)

• Submit after system installation + interconnection

• Include final invoices, permits, and performance verification

• A field inspection may be required

• Remaining incentives are paid after approval

Three-Step Process (Large Non-Residential Systems)

Step 1 – Reservation Request Form

• Submit initial project application

• Receive a Conditional Reservation Letter

Step 2 – Proof of Project Milestone (PPM)

• Show progress through permits, signed contracts, equipment purchases

• Conditional reservation becomes Confirmed

Step 3 – Incentive Claim Form

• Submit final documentation post-installation

• For some projects, incentives are paid as Performance-Based Incentives (PBI) over time

Typical Documentation You’ll Need

• Completed SGIP application forms

• Utility bills (usually last 3 months)

• Income verification (for equity programs)

• System designs, equipment data sheets, spec sheets

• Proof of site ownership or landlord consent

• Contractor license information

• Local permits and approvals

• Interconnection agreement with your utility

A good SGIP contractor will package all of this for you.

Who Administers SGIP in Your Area?

SGIP is administered regionally. Here’s a quick snapshot:

• PG&E – Northern & Central California

• Southern California Edison (SCE) – Greater LA, Inland Empire, and surrounding counties

• SDG&E (via Center for Sustainable Energy) – San Diego and Imperial counties

• SoCalGas – Focus on fuel cell / CHP for natural gas customers

• LADWP – Joining SGIP in 2025, with a focus on Residential Solar & Storage Equity inside Los Angeles city limits

Raya can help you figure out which administrator you fall under and which budgets are open.

Long-Term SGIP Requirements You Need to Know

SGIP is not just a one-time rebate—it comes with long-term obligations that affect how your system is designed and operated.

Performance & Usage Requirements

• At least 52 full discharge cycles per year

• Enrollment in an eligible demand response program

• For solar customers, being on the correct rate schedule (e.g., Net Billing Tariff)

• Systems must ultimately help reduce greenhouse gas emissions

Equipment Permanency & Monitoring

• Systems must remain at the installation site for 10 years

• A 10-year performance warranty is required from the contractor

• Real-time monitoring systems must be in place

• Annual performance data is typically reported to the program administrator

Your Responsibilities as the Customer

• Keep the system properly maintained

• Notify the program administrator of any major changes or relocations

• Continue to comply with rate schedules and demand response participation

• Allow for inspections if requested

This is why contractor selection and system design matter so much.

How Much Money Can SGIP Save You?

SGIP benefits stack across rebates, tax credits, and bill savings.

Upfront Rebate Coverage

• Equity Budgets: Often 80–100% of installed costs covered when paired with the federal ITC

• General Market: Typically 15–25% of system costs covered

• Typical residential battery systems: $15,000–$25,000 before incentives

For qualifying equity customers, SGIP plus federal incentives can essentially remove the upfront cost barrier.

Federal Tax Credit (ITC) Stacking

The federal Investment Tax Credit adds an additional 30% savings (through 2032) on top of SGIP:

• Batteries qualify when they are charged by solar

• In some equity cases, SGIP + ITC + IRA adders can exceed 100% of project costs, creating net-positive economics for the customer.

Long-Term Bill Savings & Resilience

With a well-designed system, you can benefit from:

• Time-of-use optimization:

  
  

  • Shifting usage away from peak rates; typical savings $500–$1,500/year for homeowners

  
  

• Demand charge reduction (for businesses):

  
  

  • Often $200–$800/month for the right commercial profiles

  
  

• Backup power during outages:

  
  

  • Avoiding generator rental or fuel costs and protecting critical operations

  
  

• Grid services revenue:

  
  

  • In some cases, participation in demand response programs pays additional incentives or credits.

  
  

Typical Payback Periods

Actual payback depends on rate structure, load profile, and incentive category, but general ranges:

• Equity Budget Customers: Immediate or near-immediate positive ROI

• General Market Residential: ~8–12 years

• Commercial Customers: ~5–8 years

• High Fire Risk Areas (with resilience value factored in): ~6–10 years

How to Find and Vet an SGIP-Qualified Contractor

Because SGIP is documentation-heavy and compliance-driven, the contractor you choose will make or break your experience.

Using the Official SGIP Developer List

The SGIP Developer List (at selfgenca.com) helps you find:

• Contractors with active CSLB licenses

• Their service territories

• Which technologies they specialize in

• Contact details and websites

Raya can also help you understand what to look for in a partner if you’re comparing multiple contractors.

What Makes a Good SGIP Contractor?

Look for contractors who can clearly demonstrate:

• An active CSLB license

• Formal SGIP registration

• Proper insurance coverage

• Recent SGIP project experience with references

• Ability to handle all paperwork and utility coordination

Essential Questions to Ask

• How many SGIP projects have you completed in the last 12 months?

• How long does it typically take from application to installation?

• Do you take care of all application and interconnection paperwork?

• What warranties (labor + performance) do you provide beyond manufacturer coverage?

• How do you help customers stay compliant with the 10-year and 52-cycle requirements?

Red flags include:

• High-pressure or door-to-door sales

• Asking for full payment upfront

• “Guaranteed” incentive amounts without reviewing your eligibility

• Reluctance to share references, licenses, or insurance documentation

Common SGIP Challenges (and How to Avoid Them)

1. Budget Exhaustion & Waitlists

Popular budget categories can run out quickly.

How to avoid issues:

• Apply as early as possible when budgets open—especially equity and equity resiliency

• Consider alternative categories you may qualify for

• Stay in touch with your contractor about waitlist status and budget step changes

2. Application Delays

Incomplete documentation is the #1 cause of delays.

Solutions:

• Work with a contractor who has deep SGIP experience

• Use official checklists and submit complete packages

• Respond quickly to any requests for additional information

3. Interconnection Delays

Utility interconnection can take longer than expected.

Solutions:

• Start interconnection applications early in the design phase

• Ensure your contractor has direct relationships with utility engineering teams

• Build a 60–90 day buffer into your project timeline

4. Performance Compliance Issues

Missing the 52 cycles/year requirement could lead to partial repayment of incentives.

Solutions:

• Use smart monitoring and automation to schedule discharge cycles

• Enroll in appropriate demand response programs

• Choose a contractor who offers ongoing compliance support

What’s New in SGIP for 2025?

2025 brings some of the biggest program updates in years, especially for low-income and disadvantaged communities.

1. Residential Solar & Storage Equity Launch

• Launch Date: June 2, 2025

• Funding: $280 million

• Scope: Statewide, including municipal utilities like LADWP

• Impact: For qualifying low-income households, solar + storage can effectively be zero out-of-pocket when coordinated correctly.

2. Stronger Integration With the Inflation Reduction Act (IRA)

• Cleaner stacking with federal ITC

• Domestic content bonuses for qualifying equipment

• Labor standard requirements (prevailing wage, apprenticeships) for larger projects

3. Updated Storage Sizing Rules

• Higher storage caps for equity customers

• Stronger focus on load-based sizing (matching your historical usage)

• Tighter rules against oversizing to keep incentives aligned with real needs

4. LADWP Joins SGIP

• Territory: City of Los Angeles customers

• Focus on Residential Solar & Storage Equity and environmental justice communities

• Applications expected to open before the end of 2025

SGIP 2025 FAQ

Do I need solar panels to qualify for SGIP?

Not always. Many SGIP categories allow standalone batteries charged from the grid. However:

• The Residential Solar & Storage Equity budget specifically incentivizes paired solar + storage.

• Batteries must be charged by solar to qualify for the 30% federal ITC.

Can renters participate in SGIP?

Yes—especially in equity categories.

• Renters can qualify with landlord approval

• The system must be committed to the property for 10 years

• Income and program participation (CARE/FERA/ESA) rules still apply for equity incentives

What happens if I move before the 10-year requirement is up?

SGIP requires 10-year equipment permanency at the original site.

• If you sell the home or building, the system usually stays

• Any changes or relocations must be approved by the program administrator and could affect incentives

• In some cases, improper relocation can trigger repayment obligations

Does SGIP participation affect my immigration status or federal benefits?

No.

• SGIP application data is used only for program eligibility and verification

• It is not shared with immigration authorities

• SGIP incentives generally do not count as income for federal programs like Medicare or Medicaid

Can I combine SGIP with other rebates and incentives?

Yes—with some limits.

You can usually combine:

• SGIP

• Federal ITC (30%)

• Certain local utility rebates

You generally cannot stack SGIP on top of other California state incentives for the same piece of equipment. A knowledgeable contractor should optimize your incentive stack while keeping you compliant.

What if my system doesn’t hit 52 discharge cycles per year?

Falling short of the minimum discharge requirement may trigger incentive recapture, meaning you might need to pay back part of the rebate.

To prevent this:

• Use automated discharge schedules

• Enroll in demand response

• Choose a contractor who sets up monitoring and alerts from day one

How long does the SGIP process take from start to finish?

Timelines vary, but typical ranges are:

• Reservation approval: 30–60 days

• Installation & interconnection: 90–180 days

• Final incentive payment: 30–45 days after claim submission

Total: ~6–12 months from initial application to final payment.

Conclusion: How Raya Can Help You Maximize SGIP in 2025

SGIP remains one of the most powerful tools in the country for turning high electricity costs and grid instability into affordable, resilient clean energy.

In 2025, with the launch of the Residential Solar & Storage Equity budget, qualifying low-income households in California can realistically achieve:

• Zero upfront cost for solar + storage

• Long-term bill savings

• Reliable backup power during outages

• A meaningful contribution to California’s clean energy transition

Key moves for 2025:

• Apply early, especially to equity and equity resiliency budgets

• Make sure you’re in the right budget category (equity vs general market)

• Work with a seasoned SGIP contractor who’s comfortable with compliance and paperwork

• Design your system with 10-year performance and 52-cycle requirements in mind

• Stack SGIP + federal ITC + IRA bonuses wherever possible

Ready to See What You Qualify For?

At Raya Solar, we specialize in helping California homeowners, churches, and commercial properties:

• Understand which SGIP budget they qualify for

• Design right-sized solar + storage systems that comply with SGIP requirements

• Coordinate SGIP applications, interconnection, and federal incentives

• Build a long-term plan for bill reduction and resilience

If you’re considering solar, batteries, or both, now is the time to explore your options.

Next step: Reach out to Raya for a free SGIP eligibility assessment and customized savings analysis—so you can turn California’s 2025 incentives into long-term energy independence.