San Diego: when the battery rebate money runs out fast

San Diego Community Power buys electricity for about a million customer accounts in seven cities in San Diego County. San Diego Gas & Electric still owns the wires (DOE Liftoff). Like every California load-serving entity, Community Power must buy resource adequacy contracts to cover its share of the peak, plus a reserve margin.

The risky hours are early evening, after solar fades. Charging home batteries with midday solar and discharging them in that window cuts the peak Community Power must cover. Before the program, it saw little evening capacity from home batteries. Its pilot had to add them.

RA prices surged. The capacity-weighted average price paid by California load-serving entities was $11.42 per kW-month for 2024 delivery. In September 2024, 10% of bilateral trades were priced above $54 per kW-month (CalCCA). The CPUC’s system RA benchmark nearly doubled from 2023 to 2024, and staff warned that some prices might reflect market power (CPUC Energy Division). The 2025 forecast eased, to $11.05 per kW-month for all RA types combined (CPUC).

Community Power expected the pilot to pay for about 45% of itself, about $5 million, through RA savings (DOE Liftoff).

Unlike programs that enroll batteries already in place, Solar Battery Savings paid to add new ones. The pilot launched in 2024 (Community Power load management plan). Four design choices shaped it:

1. A daily schedule, not an event. The pilot discharged batteries in a two-hour window that changed monthly with Community Power’s demand. The relaunch moves to four-hour weekday dispatch in 2026 (Community Power board).
2. The platform sends the schedule. Community Power’s distributed energy resource management system, run by Virtual Peaker, coordinates the batteries. From the relaunch, only battery makers integrated with it are eligible (Community Power).
3. Batteries discharge half their energy. Each battery discharges 50% of its usable capacity to the home first, then to the grid (Community Power).
4. Monthly checks. Each site is expected to perform at 90% or more of its expected capacity each month (Community Power).
5. Annual payment. Performance pay is mailed in the first quarter of the following year (Community Power FAQ).

Solar Battery Savings is neither event-based demand response nor a fully orchestrated VPP. It is scheduled daily dispatch: the same evening discharge every weekday, controlled by software. Community Power counts it as the battery part of a 150 MW VPP goal for 2035 (Community Power board). Compare event-based programs in California’s DSGS and Puerto Rico’s CBES.

For program designers, the lesson is that a fixed upfront rebate sells out. DOE reports the pilot hit its budget cap of about $11.5 million between August and November 2024 (DOE Liftoff). Staff told the advisory committee that the pilot launched in June 2024 and “the funds were expended by November” (Citizen Portal). Contractors were limited to 25% of the budget each, and projects beyond the cap went on a waitlist (pilot manual).

The pilot drew 1,600 participants and 2,200 batteries, with an average incentive of about $6,900 per participant (Community Power board). More than 50 contractors took part (Citizen Portal). A mapping partner estimates the batteries at about 13 MWh (Quartic Solutions).

Performance data are thin. Community Power commissioned an independent study of participant bill impacts in 2026 (Community Power), but we found no published results on peak reduction or RA savings.

For Community Power’s customers, the pilot is not yet a proven success. It cost about $1,575 per kW upfront, or about $890 net of the RA savings it expected. Ten years of RA at 2025 forecast prices would cost about $1,326 per kW, before discounting. So the pilot breaks even only if batteries perform for most of a decade and RA prices stay high. They have already fallen from their 2024 peak.

For households and adoption, it worked. Lower-income customers received about 40% of the funds, and small contractors took part (Community Power board). Performance pay adds only about $134 a year for a typical battery, by our estimate; the rebate is what changed the purchase.

Community Power applied several of these lessons. The relaunch, opened September 30, 2025, splits a 90 MWh goal into three 30 MWh steps with falling rebates, pays $250 per kWh for batteries added to existing solar, and claws back the rebate on a sliding scale if a customer leaves within five years (2025 program manual, Community Power). Staff expected the first 30 MWh step to last about 13 weeks (Citizen Portal).