Center for Sustainable Energy clarifies SGIP and Soma funding misconceptions

The Little Hoover Commission convened on March 27, 2025, to discuss critical issues surrounding California's electricity costs, focusing on the implications of various energy programs. The meeting highlighted the importance of affordable energy solutions and the role of specific programs in achieving decarbonization goals.

The Center for Sustainable Energy presented its mission to decarbonize California's energy landscape, emphasizing the affordability of such initiatives for all residents. A key point of discussion was the correction of misconceptions regarding the funding of two significant programs: the Self Generation Incentive Program (SGIP) and the Soma program.

The SGIP, which previously relied on ratepayer funding, has transitioned away from this model as of December 2024. It is now being integrated into the upcoming Residential Solar and Storage Equity Program (RSSE), mandated by Assembly Bill 209 in 2022. This shift means that SGIP should no longer be considered a ratepayer-funded program, which is crucial for the Commission's focus on affordability.

In contrast, the Soma program has never been funded by ratepayers. Instead, it is financed through cap-and-trade funds from investor-owned utilities. This program is designed to provide equity-focused climate credits to residents of multifamily affordable housing, significantly reducing their energy bills by an average of 39-61% each month. The program aims to redistribute funds from carbon emitters to support socioeconomic equity, demonstrating its effectiveness in alleviating energy costs for vulnerable populations.

Furthermore, evaluations of the Soma program indicate that it has successfully shifted costs away from ratepayer-funded care programs by over $4 million in total, with $1.7 million in savings projected for 2024 alone.

The meeting underscored the importance of accurate reporting on energy programs and their funding sources, as well as the need for continued efforts to ensure affordable energy solutions for all Californians. The Commission's ongoing discussions will likely shape future policies aimed at enhancing energy equity and sustainability in the state.