SGIP Rebate in California

Here’s a simple rebate calculation for a residential energy storage system using Discover Energy’s AES RACKMOUNT modules in a Slimline enclosure, paired with the Sol‑Ark 15K inverter—to demonstrate the potential SGIP rebate you can earn.

Typical System Configuration

Let’s assume a 20 kWh battery energy storage system installed with the Sol‑Ark 15K inverter:

• AES RACKMOUNT modules (e.g., 4 × 5.12 kWh modules = approximately 20 kWh)
• Installed by a licensed installer (with permits and inspection)
• Pair the batteries with solar panels to potentially qualify for further SGIP rebates in addition to federal rebates from the Solar Tax Credit (ITC). Check the SGIP portal for information on what incentives are available in your location.

Incentive Rebate Rates under SGIP (2025)

• Standard residential rate: $0.85 per Wh of storage, depending on the incentive step and equity status results in $850 per kWh.
  Solar is not eligible for a rebate at this level.
• Equity-resiliency (low-income or high-fire-threat areas): $1.10 per Wh of storage, which converts to $1,100/kWh for the batteries, and $3.10 for each watt of solar.

Rebate Calculation

The following calculation assumes a 7 kW solar array.

• Standard Tier: $0.85 per watt, or $850/kWh
  Rebate = 20,000 Wh × $0.85 = $17,000
  TOTAL Rebate = $17,000
• Equity-Tier or High-Fire Zone: $1.10 per watt, or $1,100/kWh
  Rebate = 20,000 Wh × $1.10 = $22,000 PLUS 7000 watts x $3.10 = $21,700
  TOTAL Rebate = $43,700

Net System Cost

Batteries + Inverter

Assuming the net cost for equipment (batteries and inverter) is $25,000:

• Standard Tier with $17,000 rebate → the net cost is $8,000
• Equity Tier or High-Fire Zone with $22,000 rebate → the net cost is $3,000

Solar + Batteries + Inverter

Assuming the cost of equipment (solar, batteries, and inverter) is $40,000:

• Standard Tier with $17,000 rebate → the net cost is $23,000
• Equity Tier or High-Fire Zone with $43,700 rebate → the net cost is $0 (FREE!)

Depending on your location, customer status, and the system you install, up to 100% of the system cost could be covered by the SGIP rebate. Any remaining costs for the system could net a further 30% federal rebate under the Solar Tax Credit (ITC).

----------------------------------------------------------------------------

Ready to Get Started?
Contact an approved installer and ask to use the Discover Energy Systems batteries.

Why Discover?

• SGIP-listed equipment: Our AES RACKMOUNT modules are expressly listed on the SGIP Verified Equipment List, along with compatible Sol‑Ark 15K inverters.
• Field‑tested configuration: Real-world installations regularly partner the Slimline battery enclosure with Sol‑Ark 15K units, meeting SGIP performance specs.

Summary

• Transitioning from residential to Commercial & Industrial (C&I) solar offers significant opportunities for installers.

• The C&I energy storage market spans four distinct categories: Light Commercial, Commercial, Industrial/Institutional, and Utility, each with different technical requirements and complexity levels.

• For installers entering the C&I space, Commercial projects (50kW-300kW, 200kWh-1MWh) represent the optimal bridge between residential simplicity and industrial complexity.

• Modern hybrid C&I inverters paired with purpose-built commercial energy storage systems like the AES 210HV are simplifying entry into the Commercial sector by integrating components and reducing complexity compared to traditional large-scale systems.

• Success requires new expertise, but commercial-grade technologies can ease this transition, enabling businesses to grow in the C&I solar market.

 

Introduction

Residential solar installers are increasingly looking to expand into the growing Commercial & Industrial (C&I) sector. While C&I presents unique technical demands across different project scales, modern hybrid inverter solutions are lowering barriers to entry, particularly in the commercial space. This article demystifies the C&I market by outlining the four distinct project categories and highlighting how commercial projects can serve as an ideal stepping stone into larger-scale solar installations.

 

Understanding the Four Categories of Commercial & Industrial Energy Storage Projects

Light Commercial (below 50kW or 200kWh): These projects serve small retail stores, small standalone businesses, and small agricultural operations. While slightly larger than residential, they maintain similar simplicity in design and installation approaches.

Commercial (above 50kW or 200kWh, up to 300kW or 1MWh): This category includes commercial sites, multifamily residential buildings, pharmacies, gas stations, and agricultural operations. These projects represent the sweet spot for transitioning installers—large enough to be profitable but manageable in complexity with integrated solutions.

Industrial/Institutional (above 300kW or 1MWh, up to 5MW or 20MWh): These encompass mines, islands, campuses, community microgrids, data centers, EV charging stations, large agriculture, and vertical agriculture facilities. Projects at this scale require sophisticated multi-component systems with custom engineering.

Utility (greater than 5MW or 20MWh): Large-scale utility applications requiring extensive custom engineering, multiple stakeholders, and complex regulatory compliance.

 

Key Technical Differences Across Project Categories

Power Systems and Voltages: Light commercial maintains proximity to residential single-phase systems. Commercial projects shift to three-phase C&I systems (120/208V or 277/480V) with DC voltages up to 1000V compared to residential 600V. Industrial/institutional and utility projects may also require transformers to achieve required voltages for different equipment.

Wiring Practices: Commercial, industrial/institutional, and utility installations require materials like MC cables and metallic conduits versus residential Romex. Stricter safety standards and more robust construction principles apply, with materials designed for longer life and demanding environments.

System Architecture Evolution: Light commercial systems can often use residential-style approaches. Commercial projects can leverage hybrid C&I inverters with integrated energy storage solutions (like Discover Energy Systems’ AES 210HV). Industrial/institutional and utility installations feature multiple battery cabinets or containers, customized switchgear, transformers, large Power Conversion Systems (PCS), microgrid controls, Energy Management Systems (EMS), and AC-coupled PV arrays with dedicated inverters.

Operational Considerations: Commercial projects demand moderate project management levels and multi-stakeholder coordination. Industrial and utility projects require strict timeline adherence, complex procurement processes, larger crews, and comprehensive occupational health and safety compliance.

 

The Commercial Sweet Spot: Bridging Residential and Industrial Complexity

Traditional Approach: Historically, any C&I project required the same complex, multi-component architecture as large industrial systems. This made smaller commercial projects disproportionately expensive, with costs nearly identical to much larger projects. Commissioning required coordinating multiple teams for PCS, BESS, EMS, and microgrid controls—often involving 2-3 different commissioning groups.

The New Commercial Solution: Commercial projects now benefit from hybrid C&I inverters (like the Sol-Ark 60k-3P or Solis S6-EH3P) paired with purpose-built commercial energy storage systems like Discover Energy Systems’ AES 210HV. These integrated solutions consolidate functions previously requiring separate PCS, EMS, and microgrid controls. This dramatically lowers barriers by reducing complexity and potentially allowing single-team commissioning with appropriate commercial-grade products.

Why Commercial Projects Are the Ideal Bridge: Commercial-scale projects offer the perfect transition point because they:

• Maintain manageable complexity while introducing three-phase power concepts

• Use integrated solutions that don't require the multiple specialized teams needed for industrial projects

• Provide sufficient project size for meaningful revenue growth

• Allow installers to develop C&I expertise before tackling industrial/institutional complexity

 

Beyond "Scaling Up" Residential: The Importance of Commercial-Grade Solutions

Residential solutions are inadequate for commercial & industrial applications for several critical reasons:

Technical Limitations: You cannot simply connect residential batteries in series. Commercial Battery Management Systems must be designed for high-voltage scenarios. Adapting residential technology through DC-to-DC converters reduces efficiency and introduces failure points.

Purpose-Built Advantages: Commercial energy storage systems like the AES 210HV bring utility-scale components and design principles to the commercial market. They feature:

• Industrial-grade batteries, inverters, and control systems

• Advanced fire suppression, deflagration ventilation, and redundant safety mechanisms

• Compliance with UL 9540 standards and UL 9540A fire testing

• Advanced thermal management through liquid cooling versus scaled-up residential HVAC solutions

• Superior performance, longevity, and safety

• US and Canadian standards compliance for electrical safety, emissions, and grid interconnection

 

Preparing Your Team for C&I Transition

Success requires developing expertise in:

• Commercial system design, installation, and maintenance

• Three-phase power, transformers, and commercial wiring practices

• New standards, safety protocols, and construction principles

• Leveraging modern hybrid C&I inverters to ease learning curves

• Building partnerships with manufacturers, distributors, and service providers

• Delivering solutions addressing commercial client needs: cost savings, resilience, and sustainability

 

Conclusion

The transition from residential to C&I solar installations presents significant opportunities across multiple project categories. Commercial projects (50kW-300kW, 200kWh-1MWh) represent the ideal bridge between residential simplicity and industrial complexity. Understanding the technical differences in power systems, wiring, and architecture across all four categories prepares installers for success. Integrated hybrid C&I solutions paired with commercial-grade energy storage systems like the AES 210HV are making the commercial space accessible by simplifying design, installation, and commissioning while maintaining the robustness required for larger installations. With proper strategies and technological advancements, businesses can confidently pursue commercial projects as a stepping stone to the broader C&I market and drive growth in the dynamic clean energy landscape.

By Nick Holden, Senior Regulatory Engineer, Discovery Energy Systems 

 

Tl;dr

• UL 9540 is a safety standard for certification of Energy Storage Systems (ESS’s)
• UL 9540a is a test method for gathering data and  assessing an ESS’s ability to withstand a thermal runaway event, but doesn’t offer a pass or fail verdict
• Manufacturers use UL 9540a test results along with other compliance efforts to obtain UL 9540 certification
• The UL 9540a test method is a comprehensive, four-step procedure evaluating an ESS starting with individual cells, battery modules, to the complete energy storage system
• Consumers should choose energy storage systems with UL 9540 certification for peace of mind and safety
• Be cautious of confusing terminology regarding certifications like "UL 9540a certified"
• Proper certification like UL 9540 for ESS' is required for installation approval in certain regions, such as major urban areas of California
• Prioritize finding a qualified professional who understands the importance of UL 9540 certification when choosing a solar installer
  
• For an example of a UL 9540-certified energy storage system, please see our AES Rackmount Slimline Enclosure here:
  https://discoverlithium.com/products/lithium-batteries/aes-rackmount 
  
  

Harnessing the power of the sun is a fantastic way for homeowners to save money, become more energy-independent, and help our planet. However, when it comes to storing solar energy, safety is paramount. Certifications have been established to ensure the safety of consumers, but two terms often cause confusion: UL 9540 and UL 9540a.

What is UL 9540?

While UL 9540 and UL 9540a sound similar, they play very different roles. UL 9540 is a safety standard and is considered the industry benchmark to ensure energy storage systems work safely. UL 9540 is approved by the American National Standards Institute (ANSI) and the Standards Council of Canada (SCC). To meet the standard, energy storage systems must comply with strict requirements for construction methods, system safety, and system performance and perform up to specified levels on a series of tests, including UL 9540a.

What is UL 9540a? 

UL 9540a, on the other hand, is a test procedure. It assesses an energy storage system’s response to thermal runaway, a potentially dangerous situation where a battery enters an uncontrolled, self-heating state. The test gathers data on how the battery responds but doesn’t offer a pass or fail verdict. Think of UL 9540a as a single hurdle within the bigger race of achieving 9540 certification. Manufacturers use the 9540a test results along with other compliance efforts to obtain certification from an authorized third-party agency for UL 9540.

What are the steps of the UL 9540a test procedure?

The UL 9540a test is a comprehensive, four-step procedure that starts with testing the individual components and ends with testing the product as a whole. The first step, the cell level test, evaluates an individual battery cell. It’s forced into thermal runaway in a pressure vessel, and the gasses produced are gathered and analyzed. If the cell test triggers thermal runaway, the process moves to the module test.

 

This test assesses how the module handles a runaway cell. The goal of the module test is to evaluate how the battery responds when cell-to-cell propagation occurs. This is done as an iterative process starting with forcing thermal runaway in a single cell, and monitoring whether it propagates to adjacent cells. If yes, the flammable gases are collected and analyzed. If cell-to-cell propagation does not occur, the test is repeated but starts with forcing two cells into thermal runaway and monitoring for propagation. Then if needed, three cells, etc.

 

The third step, the unit-level test, evaluates the complete energy storage unit as installed per the manufacturer's installation instructions. Using the same method determined in the Module level test, a runaway event is simulated in one of the modules, and the test observes the temperature rise in the cabinet, whether any fire escapes the enclosure to adjacent units, overall safety performance, and how a thermal runaway event in one ESS will affect adjacently installed ESS's.

 

Finally, if the unit-level test reveals any safety hazards, such as escaping flames, the installation-level test is conducted. It evaluates potential risk mitigation strategies, such as creating specific installation instructions and limitations of installation locations.

 

What certification should homeowners and installers look for when assessing home solar batteries?

Consumers can achieve peace of mind by choosing an energy storage system that is certified to the UL 9540 standard. This rigorous process, conducted by an independent third-party agency, ensures home batteries meet strict safety standards, lowering the risk of fires and other potential hazards. Certification to UL 9540 standards involves simulating real-life scenarios during testing, providing an extra layer of confidence in the safety of a chosen solar battery system.

 

Unfortunately, some manufacturers use confusing terminology regarding certifications. This can make it difficult to know if a product is truly safe. Consumers should be cautious of manufacturers claiming their products are “UL 9540a certified.” While the test is part of the UL 9540 certification process, simply undergoing the test doesn’t guarantee that the product is safe to use. Similarly, claims of “designed to UL 9540a or UL9540” or “tested to UL 9540 or UL 9540a'' offer little assurance. These could indicate testing was performed on a preliminary component but not the whole product, or even that the test results were unsatisfactory. Look for wording like “UL 9540 listed” or “certified” to indicate the ESS has undergone independent third-party evaluation and certification to ensure it meets all requirements of the standard.

 

It’s a good idea to visit manufacturers’ websites and look for their energy storage systems’ test results and certifications. However, it’s important to be wary of any incomplete reports that only show the first page or two. Below are examples of a UL 9540 certificate and the first and last page of a UL 9540a test report.

 

Figure 1. Discover Energy Systems’ AES Rackmount Slimline Enclosure’s UL 9540 certificate.

 

Figure 2 & 3. The first and last page (pg. 1 & 38)  of Discover Energy Systems’ AES Rackmount Slimline Enclosure’s UL 9540a test report

Why do you see confusing language around UL 9540 and UL 9540a in the solar battery market? 

New solar battery technology is growing incredibly fast, and the regulations are changing just as quickly. Manufacturers may find it challenging to keep up with the various regulations in this rapidly evolving landscape. Since its introduction in 2016, the UL 9540 standard has undergone three revisions. The technical and legal language used in the standards can also be difficult to understand. For overseas manufacturers relying on translation tools, a few misplaced words can lead to significant misunderstandings.

 

At the end of the day, the installation likely won't be approved in certain places, such as California, without ESS certification to UL 9540. Proper certification ensures a safe installation, saving consumers time and money and preventing potential delays.

 

Why UL 9540 is important

When choosing a solar installer, prioritize finding a qualified professional who understands the importance of selecting products that are certified to UL 9540 standards. This ensures a safe and inspector-approved installation, saving you time and money in the long run. Their expertise can ultimately mean the difference between a smooth installation and costly delays.

 

While solar power offers a path toward energy independence and a greener future, safety remains a top priority, especially when it comes to battery storage. Don't be misled by confusing terminology. UL 9540 certification is the gold standard, ensuring a battery system meets strict safety protocols through rigorous testing. This translates to peace of mind for consumers, knowing their home is equipped with a safe and reliable energy storage solution. It’s important to remember that certification to UL 9540 standards is also mandatory for installation approval in many areas. By prioritizing safety and choosing a UL 9540-certified system and a knowledgeable installer, consumers can confidently embrace the future of solar power.

For an example of a UL 9540-certified energy storage system, please see our AES Rackmount Slimline Enclosure here:
https://discoverlithium.com/products/lithium-batteries/aes-rackmount 

- By Nick Holden, Senior Regulatory Engineer, Discovery Energy Systems

In an energy storage system, “closed loop” refers to the digital communication and control between different components from different manufacturers.

In a battery energy storage system (BESS), the battery management system (BMS) shares with the inverter-charger the battery's present state of charge (SOC), voltage, current and cell temperature as well as the requested charge voltage and current. The inverter-charger uses the information shared by the BMS to adjust its charge settings, thereby closing the loop (see diagram below).

 

Figure 1. Closed-Loop Communication

Conversely, an “open loop” system refers to a charging system where the battery BMS does not share information with the inverter-charger during the charging process. In an open-loop system, you must manually program the inverter-charger with fixed charge parameters. And potentially use external tools, such as a battery shunt or temperature compensation sensor, to give the inverter-charger information about the current, battery temperature, and calculated battery SOC.

 

Benefits

A closed-loop charging system offers many benefits.

1) Safety

Closed-loop charging supports battery safety by enabling features embedded in the BMS to interact with the charging system’s controls. This typically results in alarms or warnings requesting to stop the charge or discharge.

 

2) Ease of configuration

Given the automatic communication of the parameter values, the configuration of a closed-loop charging system is much easier than the manual process of configuring settings for an open-loop system.

 

3) Faster Charging

A closed loop system enables the communication of dynamic charge voltage requests, which can speed up the charging process. Up to 25 to 40% faster than open loop charging.

 

4) Monitoring

A closed-loop system can allow the inverter-chargers monitoring system to display accurate battery SOC and other parameters provided by the BMS.

 

Battery Management Systems (BMS) and Safety

A BMS in a closed-loop charging system can communicate with other devices in the system enabling safety mechanisms. Typically, the BMS prevents charging when there is over-temperature, under-temperature, over-voltage, or over-charge current. The BMS also typically prevents discharge when there is over-temperature, under-temperature, under-voltage or over-discharge current. Except for an under voltage condition, the BMS In a closed-loop system can also communicate that the issue has been cleared and automatically enable discharging or charging to resume.

For example, if a lithium battery is charged when it is below 0 °C (32 °F), the battery loses capacity and its internal resistance is permanently increased before ultimately failing. To avoid under-temperature charging, the BMS in a closed-loop system can terminate the charging process when the battery cell temperature is below 0 °C (32 °F) and restart when cell temperatures rise above the threshold.

A good example of this is the BMS in Discover’s AES RACKMOUNT lithium battery, which is configured to operate only in a safe temperature range. It stops receiving a charge when the battery cell temperature is below 4 °C (39.2 °F) and only resumes charging after 120 seconds have elapsed and the battery cell temperature is 4 °C (39.2 °F) or higher. Discover also offers a AES RACKMOUNT battery model that comes with internal heating that allows it to maintain operating in colder climates.

 

Configuration

A closed-loop system minimizes the amount of setup required by enabling the BMS to automatically communicate the charging parameters to the inverter-charger.

To enable closed-loop communication, the BMS must use the correct inverter-charger protocol and be hardwired, usually by CAT5 cable, with the inverter-charger. Many batteries come pre-installed with the preferred protocol. However, the wiring of CAN High, CAN Low, and CAN Ground and serial cable signals differ between inverter chargers. This can often be confusing to installers and requires the ability to crimp and install custom CAT5 crossover cables correctly. Always, refer to the inverter-charger documentation for wiring information.

Batteries networked in closed-loop communication with the power conversion system must also take into account the state of charge across multiple batteries which is often coordinating the output of multiple inverter-chargers. How battery data is amalgamated and whether an inverter-charger acts as a client or server needs to be coordinated. To do this many Lithium batteries require the manual setup of the master-slave relationship between batteries and power conversion equipment using DIP switches on the battery modules.

An advantage offered by Discover’s lithium battery systems is the LYNK II Communication Gateway, which supports closed-loop communication between Discover Lithium batteries and various brands of inverter chargers. The LYNK II provides a protocol gateway between the inverter-charger network and the Discover Lithium battery network.

LYNK II is also used to select signal wiring requirements of the inverter-charger so that no crossover CAT5 cables are required. In most cases, no further setup is required, as Discover lithium batteries manage the battery network automatically.

 

Figure 2. LYNK II between a Discover Lithium Battery Network and the inverter Protocol Network.

 

Dynamic Charging

In addition to communicating basic battery information, such as the battery capacity, battery SOC, and maximum charge parameters (voltage, current), some inverter chargers support receiving dynamic charge requests from the battery.

Dynamic Charging in a closed-loop system enables faster charging than is normally possible with the conservative static charge voltage targets used by an open-loop system. Lithium batteries with Dynamic Charging firmware continually send to the inverter-charger the safe, but optimized voltage and current

settings. In a closed-loop system, the inverter-charger receives these parameters and dynamically adjusts the charge settings.

With dynamic charging, the system automatically adjusts to overcome voltage losses due to cable and terminal resistance and balances the cells at the end of the charge cycle. This results in a longer bulk phase (maximum current) and a shorter absorption phase.

The graph below compares both the static charging and dynamic charging of a Discover Lithium Battery.

 

Figure 3. Open-Loop vs. Closed-Loop charging times of a Discover Lithium Battery.

 

Dynamic Cell Balancing

The balancing of battery cells reduces the uneven aging of the cells.

At the end of the charge cycle, as the battery approaches 100% SOC, the BMS adjusts down the overall charge current but forces voltage to rise slightly causing any cell that has diverged from the lowest voltage cell to continue absorbing current safely.

Unfortunately, in an open-loop charging system, maintaining a high target balancing charge voltage often causes individual cells to trigger battery over-voltage protection, which prematurely stops the overall cell balancing process. This results in a shorter balancing period with cells remaining unbalanced. This shortens the useful battery life.

A BMS with Dynamic Balancing controls the target voltage to within a safe range avoiding the premature stoppage of the process. The result is a longer, more thorough cell-balancing process that delivers the longest useful battery life possible.

 

Conclusion

The BMS delivers safety, allowing the battery to operate only within acceptable limits. The BMS will provide charge parameters to the inverter-charger in a close-loop system enhancing safety and simplifying system configuration. Some BMS will also deliver fast dynamic charging, and dynamic cell balancing in a closed-loop system.

For information about the batteries offered by Discover Energy Systems, please visit: https://www.discoverlithium.com