Solar developers say state program is a mess and slow to help low-income households

Solar developers say they’re facing crippling losses and potential bankruptcy amid a stall in a state-funded solar power program.

California’s “self-generation incentive program,” or SGIP, was reworked in 2024 to help low-income households install solar and battery-storage systems for free.

But SGIP has been plagued by delays, bureaucracy, poor communication and stalled payments, according to five developers LAist spoke with. Small developers say they’ve been hit especially hard by a lottery system that they argue favors larger developers.

And customers who stood to benefit the most from free installation of solar and battery storage — low-income households in the hottest and most fire-prone areas of the state — are in limbo, waiting months for the bill savings and energy reliability they were promised ahead of what is expected to be a record-hot summer.

The issue highlights the challenges to expanding access to clean energy as fossil fuel pollution continues to accelerate climate change and is another hit to an industry that has faced significant setbacks in recent years from changes to state-level rooftop solar programs and the Trump administration’s cuts to clean energy incentives.

How we got here 

The state has offered incentives to large electric customers to install battery-storage systems since the energy crisis of the early 2000s. The latest version of the SGIP program aims to prioritize qualifying low-income residents.

In 2024, the state allocated $280 million in state funds to install solar and batteries for free on qualifying homes and apartments. The program is administered through the state’s investor-owned utilities and the Los Angeles Department of Water and Power. It officially launched last summer.

Here’s how it’s supposed to work: Developers identify projects they can take on, then apply for funding via a first-come-first-served reservation system. If requested funds exceed the total funding, then a lottery is triggered. If their project is approved, the developer does the work and covers the upfront costs of the installation with the understanding they’ll get paid back through SGIP within a year.

What’s happening in LADWP territory?

Solar panels dot the parking area at the DWP building in downtown Los Angeles.

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Lawrence K. Ho

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Getty Images

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As soon as the SGIP program launched last June, large developers quickly flooded the application system.

Sunrun, one of the nation’s largest solar developers, submitted applications requesting as much as 97% of the total funds available in Los Angeles Department of Water and Power territory, according to public data reviewed by LAist. (Sunrun declined to be interviewed for this story. LADWP didn’t agree to be interviewed about the breakdown of applications.)

LADWP said it is in the process of reviewing the 451 applications it received. So far, DWP officials have approved one: $28,000 for a single-family home project, the utility told LAist.

Smaller developers told LAist they’re concerned that there is no cap on how much any single developer can receive through the program. General market versions of SGIP not targeted for low-income properties have developer caps of 20% of the incentive funds, according to the program’s handbook.

“The purpose of the program, I believe, is not to just enrich the biggest players or to allow them to have free project financing,” said Aaron Eriksson, owner of Escondido-based Solar Symphony Construction, which applied for projects in LADWP territory. “We all got kind of left out in the cold on that one.”

Robert Cudd, a research analyst with UCLA who has studied SGIP, said the program does incentivize developers lining up as many projects as possible ahead of time to “claim the largest possible share of that rebate pool.”

That’s often the case for similar programs that aim to serve low-income customers.

The state “is agnostic about who is doing this work,” Cudd said. “They just want to accelerate the energy transition.”

Only a few large companies — including Sunrun and GRID Alternatives, as well as growing startup Haven Energy — have developed specialized expertise in these kinds of complex programs that have higher upfront costs.

Small companies on the brink 

Delayed reimbursements have developers worried about projects in the works and about new paperwork requirements.

In February, the California Public Utilities Commission — five governor-appointed regulators who oversee the program — abruptly paused SGIP. In their ruling, they said that projects submitted varied widely in costs, with many exceeding incentives “significantly.”

The ruling flagged discrepancies such as the same wall battery reportedly costing as low as $8,600 and as high as $21,000. So the CPUC decided to require developers to submit additional receipts and documentation of their costs.

But developers LAist spoke with said only a fraction of applications were at the state’s predicted costs. The developers argue costs have gone up due to inflation, tariffs and cuts to clean energy tax credits. Projects serving low-income households also often require upgrades because of the buildings’ age.

Joshua Buswell-Charkow, deputy director of California Solar and Storage Association, a trade organization that represents more than 70 companies that participate in the SGIP program, said work is already underway in some cases.

“Some of our contractors are out literally millions of dollars right now,” he said. “ I'm worried that we're going to have folks go out of business because of this.”

That could be the case for Eriksson’s company, Solar Symphony. More than 100 of the company’s applications to install solar and battery systems at no cost to qualifying customers were approved by Southern California Edison and San Diego Gas & Electric. Now, Eriksson said, they don’t know if they’ll be paid for projects they’ve already installed.

“We were very excited by the potential to deliver truly no-cost, home-sited solar and batteries to California ratepayers,” Eriksson wrote in a statement to the public utilities commission. “The regulators effectively induced us to commit under one set of rules; we accepted and delivered — and now the terms are changing.”

Eriksson told LAist he could be out of business by June if the state doesn’t release the payments.

Other companies have indefinitely paused installing systems approved by program administrators.

“We've signed contracts with hundreds of low-income families. We've purchased the equipment,” said Vinnie Campo, co-founder of Haven Energy, one of the state’s largest SGIP installers, at a Public Utilities Commission meeting in late April. “Our crews are ready to install, but systems sold in good faith to customers … are sitting in warehouses instead of on homes.”

Seven representatives of solar companies, including a lawyer representing multiple companies in Southern California, expressed their concerns at that meeting.

Lionel Rodriguez of Glendale-based Solar Optimum was one.

“Many people are hurting,” Rodriguez said, “and it's destroying the integrity of our company and also the customer's trust.”

In early May, in response to such concerns, the Public Utilities Commission released another ruling saying administrators can start paying developers when certain documentation has been submitted but that they still could audit any company that receives funds. Meanwhile, utilities have until the end of June 2028 to spend the funds, or else they’ll be returned to the state’s general fund.