How California's SB 913 Is Changing Battery Storage
California's SB 913 is transforming battery storage incentives—find out how it impacts homeowners and investors alike!
California adds roughly 8,000 residential battery installations every single month. That's 100 MW of distributed storage coming online — quietly, rooftop by rooftop — while state policy has largely treated these assets as afterthoughts rather than infrastructure. SB 913 is designed to fix that, and a new $11.25 million program from Ava Community Energy is betting that homeowners are ready to become real participants in the grid.
Understanding SB 913 and Its Implications
Introduced by Democratic state Sen. Josh Becker and advanced by California legislators in April 2026, SB 913 would update the state's resource adequacy rules to allow aggregated distributed energy devices — residential batteries, electric vehicles, and similar assets — to qualify as resource adequacy capacity. That's the same designation currently reserved for conventional power plants and large-scale storage facilities.
The bill's core argument is simple: if a resource can reliably deliver power when the grid needs it, the regulatory framework should recognize that — regardless of where the resource sits.
Resource adequacy (RA) is the mechanism California uses to ensure there's enough generation available to meet peak demand. Utilities are required to procure a certain amount of RA capacity. Right now, that procurement almost exclusively flows toward utility-scale resources. Thousands of residential batteries sitting in garages across the state contribute nothing to that formal accounting, even when they're actively discharging into the grid during a heat event.
Brandon García, California director for Advanced Energy United, called the bill "overdue recognition" — and that framing is apt. California has spent years pushing consumers to buy EVs, install smart thermostats, and pair rooftop solar with batteries. The policy logic was sound: distributed load flexibility reduces strain on transmission infrastructure and defers costly upgrades. But the compensation and regulatory structures never caught up. Homeowners invested in hardware that the grid depends on, without the market access to be compensated like the grid depends on them.
SB 913 would change that math. Once residential batteries can count as RA capacity, utilities and community choice aggregators have a genuine procurement incentive — not just a feel-good incentive — to aggregate them. That's when the economics start to get interesting for everyone involved.
The SmartHome Battery Program Explained
Ava Community Energy didn't wait for SB 913 to pass. The Oakland-based community choice aggregator launched its SmartHome Battery program just two days before the bill advanced — an $11.25 million initiative that puts real money behind the concept of residential battery sharing.
The structure is straightforward. Customers who install qualifying home batteries can choose to share 40%, 60%, or 80% of their battery's capacity with Ava. In exchange, they receive upfront installation rebates and ongoing monthly payments.
Income-qualified customers receive $500 per shared kilowatt-hour in rebates. Customers outside that threshold receive $90/kWh — still meaningful, but the tiered structure signals Ava's intent to make this program accessible rather than exclusive.
On top of the rebate, participants receive $3 per shared kilowatt-hour in monthly participation payments. For a homeowner sharing 80% of a 10 kWh battery, that's $24/month just for letting Ava dispatch their battery during peak periods. Not life-changing on its own, but when stacked against avoided electricity costs and the upfront rebate, the combined value proposition becomes hard to ignore.
Timing matters here. Ava's CEO Howard Chang cited two specific headwinds driving the program: the 2023 rollout of NEM 3.0, California's revised solar compensation framework that significantly reduced export credits for solar-only systems, and the expiration of the federal investment tax credit for residential solar at the end of last year. Both shifts eroded the financial case for solar alone. The response from California consumers has been telling — the solar-plus-storage attachment rate more than doubled in the 12 months after NEM 3.0 took effect, according to U.S. Energy Information Administration data. Homeowners didn't stop investing in distributed energy. They started investing smarter.
The Role of Distributed Energy Resources
Distributed energy resources — DERs in industry shorthand — are any small-scale power assets connected to the distribution grid rather than the transmission system. Rooftop solar, home batteries, EV chargers, smart thermostats, and water heaters with flexible load controls all qualify. Individually, none of them move the needle. Aggregated, they represent a meaningful and increasingly reliable grid resource.
The insider reality that often gets lost in policy debates: DERs are already performing grid services. During California's heat emergencies in recent years, enrolled battery and thermostat programs have dispatched hundreds of megawatts of flexible capacity on short notice. The grid relied on these resources. The regulatory framework just hasn't been built to formalize that reliance — or compensate it accordingly.
What SB 913 recognizes is that the distinction between "distributed" and "utility-scale" is increasingly a legal fiction, not a technical one.
The Demand Side Grid Support program — a battery-based virtual power plant framework launched in 2022 — demonstrated this concretely. It grew into one of the largest statewide VPPs in the country before California legislators cut its funding last year. That funding cut was a setback, but programs like Ava's SmartHome Battery are filling part of the gap through private incentive structures. SB 913 would give those programs a formal pathway into the resource adequacy market, making them more durable than budget-dependent state programs.
Financial Benefits of Battery Sharing
For homeowners, the calculus has shifted. Battery storage paired with solar no longer requires a purely environmental motivation — the economics are starting to justify themselves, especially with program incentives layered on top.
Consider a homeowner who installs a 10 kWh battery system and elects to share 80% with Ava. At $500/kWh for income-qualified customers, that's $4,000 in upfront rebates on the shared capacity alone. Monthly participation payments add roughly $288 annually. Against the backdrop of rising electricity rates — California residential customers pay some of the highest rates in the continental U.S. — self-consumption from a battery system further reduces bills during peak pricing hours.
For investors and developers watching this space, the residential battery segment represents something different from utility-scale storage: a distributed asset base that doesn't require land acquisition, interconnection queues, or large capital outlays per project. The aggregation model — what Ava is doing here — is the mechanism that makes residential storage investable at scale. A portfolio of aggregated residential batteries behaves, from a grid-services standpoint, like a mid-size peaker plant. Without the permitting timeline.
California battery storage incentives at the program level are currently making that portfolio economics work. If SB 913 passes and RA qualification follows, the revenue stack for aggregated residential batteries gets another layer — one that doesn't depend on utility discretion or annual program funding.
What Comes Next
The legislative path for SB 913 isn't guaranteed. Resource adequacy reform touches multiple stakeholder interests — incumbent generators, investor-owned utilities, and the CPUC all have seats at that table. But the direction of travel is clear.
California has already committed to the distributed energy future through years of consumer incentives and policy mandates. The question was always whether the market structures would follow. SB 913, alongside programs like Ava's SmartHome Battery initiative, represents the regulatory infrastructure finally catching up to the hardware that's already in the field.
For anyone investing in residential solar-plus-storage, community energy programs, or DER aggregation platforms, the timing is worth paying attention to. The assets are there — 100 MW added every month, compounding. The question is who builds the programs and policy structures to unlock their full value before the next heat emergency makes the case for everyone.
[INTERNAL LINK: SB 913 details]
[INTERNAL LINK: Ava Community Energy programs]
[INTERNAL LINK: distributed energy resources]
EDITOR NOTES: Consider cutting the paragraph discussing the Demand Side Grid Support program if it feels too detailed for the overall focus on SB 913 and Ava's program.