UPDATE: Nearly-free Powerwalls for The OC

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For many in California, the thought of installing a rooftop solar system paired with battery storage moves closer and closer from a luxury to a necessity by the day. The driver behind this reality has been the Public Safety Power Shutoffs (PSPS) being instituted by Pacific Gas and Electric (PG&E) and Southern California Edison (SCE).

In a move that feels equal parts convenient timing and necessary resource recognition, California regulators have awarded 19 contracts under Southern California Edison’s 125-megawatt Preferred Resources Pilot (PRP), contracts that had previously been languishing in the land of delays.

One of the companies awarded such a contract is Swell Energy, a residential battery startup which was awarded 5 MW of battery capacity. Under the program, eligible customers in Orange County can combine  federal incentives, plus a discount made available through Swell Energy of up to $5,200 for the installation of a Tesla Powerwall 2. This figure includes the state-provided Self Generation Incentive Program (SGIP) credit and 30% Federal Investment Tax Credit (ITC) will substantially reduce the investment cost to these lucky homeowners. That investment, by the way, usually comes in somewhere around the ballpark of $7,600.

And lucky indeed they are, as SCE has predicted that the current round of shutoffs will be affecting more than 22,500 customers. Broken down by county, that means blackouts for 4,218 customers in Los Angeles County could be, along with 419 in Ventura, 891 in Riverside, 2,007 in Orange and 6,702 customers in San Bernardino counties. So the majority of Orange county, which has the second-highest median income of five counties listed, just behind Ventura, will see substantial incentives. As for the remaining 21,000, nothing as of yet.

What’s interesting is that the credit program is not the only initiative to come out of this Swell’s award. According to Swell, SCE has commissioned the company to build an interconnected fleet of 3,000 residential energy storage systems that will be able to provide up to 20MWh of reduced demand, on demand.

SCE’s battery program has actually existed since 2017 and was initiated in response to the closure of the San Onofre Nuclear Generating Station. The closure of the San Onofre plant as well as somen costal gas plants created a 7 GW need for generation in Southern California. The program was instituted to fill the power need with local generation and to prevent the need for new fossil fuel infrastructure.

This is important not only in the scope of resilience it will provide during the outages, but as a major commitment to distributed storage by a utility. It will likely take time before any non-California utility sees the value provided by distributed generation + storage, but getting one to promote the resource as a way to reduce fire and outage risks in the first place is a huge step.

This move is an inspiring, albeit confusing step taken by SCE. $5,200 is a pretty big incentive, and it’s even more important that a utility is offering them and praising the efficacy of distributed storage on a large grid. And, while it would understandably be uneconomic to provide that level of credit to the entirety of the 22,500 customer base subjected to blackouts, it is very strange that only Orange County gets to cash in.

Note: This article was originally published on November 8 but was removed due to inaccuracies in a prematurely-release outline of Swell’s contract award. The original article contained inaccuracies regarding the total discount, type of incentive and the relationship between SCE and Swell. We apologize for the mistake and any confusion it may have caused.