SGIP Incentive Levels
Incentives are issued upon final approval of the incentive claim. The goal of the program is to help reduce the cost of installing on-site self-generation equipment by providing a one-time incentive payment. The financial incentives range from $1.50/W-$4.50/W depending on the type of the system and the system size. The table below describes the three different incentive levels for systems not greater than 1 MW.
|Technologies||Incentive||System Size||Maximum Incentive Size|
|Renewable||Wind turbines||$1.50/W||30 kW – 5 MW||1 MW|
|Non-Renewable||Fuel Cells||$2.50/W||≤ 5 MW||1 MW|
Even though the SGIP incentives are capped at 3 MW, the maximum renewable system size is 5 MW. The incentive levels for systems greater than 1 MW are listed in the table below. Those systems receive incentives that decline according to the system capacity as follows:
|System Capacity||Incentive Rate|
|0 – 1 MW||100%|
|>1 MW – 2 MW||50%|
|>2 MW – 3 MW||25%|
Numerous incentive limitations complicate the calculation of the correct incentive. The incentive amount may be reduced, if the project in question receives incentives under other self-generation incentive programs. The incentive payments may also not exceed the total eligible cost of the system. The following example:
A customer is installing a fuel cell of 1.0 MW. The fuel cell is operating on renewable fuel. The total system cost is $5 million. Another IOU ratepayer funded program provided a previous rebate of 20% of the total system cost ($1 million). The SGIP incentive for the project is $4.50/W. The maximum SGIP incentive based on the size of the system is calculated as follows:
1,000,000 W x $4.50/W = $4,500,000
Because the system received previous IOU funding, the total incentive is adjusted. The SGIP incentive is discounted by the total amount of the other incentive (the portion by which the SGIP incentive is discounted largely depends on the source of the additional funding). The incentive in the example is adjusted as follows:
$4,500,000 – 1.0 x $1,000,000 = $3,500,000
In addition, the SGIP incentive regime dictates that the out-of-pocket expense of the system owner must not be less than zero. The out-of-pocket expense is the total project cost less the different incentives (including the SGIP incentive). In the example the total incentive of $4.5 million ($1.0 milllion + $3.5 million (SGIP)) is lower than the eligible project cost of $10 million. Therefore, the total SGIP incentive is $3.5 million.
If you have questions about your own renewable project, you may contact us for professional guidance and advice.