April 25, 2018
Government Entities Can Take Advantage of Valuable Programs to Build Solar And Energy Storage. Here’s How.
Solar and energy storage are appealing to public agencies for a number of reasons. Advanced energy systems enable water districts, schools and other government entities to save taxpayers’ money while achieving sustainability goals. Unfortunately, public sector customers are not allowed to take advantage of the federal Investment Tax Credit that makes renewable energy a great value for so many commercial businesses.
The good news is public customers can optimize their solar or energy storage investment through several key programs and financing options.
Self-Generation Incentive Program (SGIP)
The most recent addition to California’s renewable energy incentive programs is the Self-Generation Incentive Program (SGIP). This program enables public entities to install advanced energy systems like energy storage on the customer side of the meter and receive significant rebates.
Battery storage is particularly helpful for reducing high demand charges by storing energy and discharging it when energy use is highest. Storage also helps with the shift to time-of-use rates as customers can store the electricity they generate on site when rates are low and consume the energy later in the day when rates are higher.
For public entities serving low-income communities in California, the SGIP Equity Budget creates an additional incentive to install solar + energy storage. The Equity Budget allocates 25% of SGIP funds for customer-sited energy storage projects in disadvantaged areas.
The SGIP budget steps down after each allotment is met, so it pays to act fast to receive maximum rebates.
Power Purchase Agreements
One of the best ways a public agency can monetize tax benefits is through a power purchase agreement (PPA). With a PPA, your facility acts as a host for a PV system, and a third-party financier (like CalCom) passes on a portion of the tax savings in the form of reduced, long-term electricity rates. PPAs are great for water districts and schools because they require no upfront capital investment, and no maintenance of the system since it’s owned by the financier. You get a guaranteed low rate of clean energy for 15-20 years, and usually a buy-out option around year six.
Renewable Energy Self-Generation Bill Credit Transfer (RES-BCT)
Another way public entities can squeeze the most value out of a solar project in California is to utilize the Renewable Energy Self-Generation Bill Credit Transfer (RES-BCT) program. RES-BCT allows a local government with one or more eligible renewable generating facilities to export energy to the grid and receive generation credits to benefitting accounts of the same local government -- defined as any city, county, special district, or other public agency.
One of the hardest acronyms in the business (just think “Respect” and you’ll remember it!), RES-BCT is incredibly valuable for public sector customers because it enables them to optimize savings from solar across remote locations as long as they’re in the same city or county.
NEM and NEMA
Net Energy Metering (NEM) is the basic building block of the solar industry in California – and likely will be for several years to come. NEM enables customers to earn the full retail value of the clean energy they produce on site by crediting their utility bill for any excess energy. While this can get complex, CalCom has a top-notch team of utility bill analysts that work with every customer to ensure they’re getting the full value of their energy credited on their bill every month.
Next Step? Free Energy Assessment
To find out which program is right for your water district, school or public agency, contact us.