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Interconnection

WHAT IS SOLAR INTERCONNECTION?

Interconnection is the physical and bureaucratic process of connecting your solar energy system to the local utility grid, for benefits such as Net Metering.


Interconnection is not as simple as your current one-way connection, because the electricity from your panels needs to be converted and transmitted based on how much you generate at any given time. The process is governed by rules called “standards” or “requirements,” which determine the responsibilities of utility companies and homeowners in the interconnection process.


WHY IS SOLAR INTERCONNECTION IMPORTANT?

The majority of solar panel installations throughout the U.S. are connected to the grid. With grid-tied systems, you can draw power from the power grid when your solar panel system isn’t producing electricity. Additionally, you can supplement your energy needs with electricity from the grid when the sun is shining if you’re using more electricity than your solar panels are producing. When your solar panels generate more electricity than you are using, the excess kilowatt-hours (kWh) are exported to the grid. If you are a customer of a utility that offers net metering, you will receive credits for this electricity that you can apply towards a future electric bill.


While it is possible to install an off-grid solar panel system and avoid the interconnection process entirely, it’s often not cost-effective to do so. For the average residential property, going “off the grid” with solar power requires several solar batteries to store energy. Prices of batteries are falling, however, adding multiple batteries to your system with the goal of severing your connection to the grid will add tens of thousands of dollars more to the cost of your solar installation. If you’re eligible for net metering, sending your excess solar energy to the grid and relying upon the grid when the sun isn’t shining is the most economical option.


WHAT IS THE SOLAR INTERCONNECTION PROCESS?

Interconnection standards are the legal rules for connecting a renewable energy system to the power grid. This includes the technical and contractual terms that both system owners and utilities must follow. Most small renewable energy systems can be approved and interconnected quickly; larger systems generally take more time and may require system impact studies to ensure they will not cause any issues on the grid. In some cases, additional system upgrades may be required to interconnect the renewable energy system.


If you are working with a solar contractor, they will help you submit an interconnection and net metering application to your utility and schedule the inspections needed to connect your system to the electric grid.

There are two major steps involved in the interconnection process: applying for interconnection and receiving permission to operate (PTO).


APPLYING FOR INTERCONNECTION

Utility companies won’t just let any solar energy system connect to their grid; they need to ensure that your solar energy system meets necessary electrical safety standards. They’ll also ensure that your solar panel system will meet their respective net metering guidelines.


Interconnection applications often require information about your property, your electricity usage history, and the specifics of the system you’re looking to design (i.e., equipment, system size, production estimates, system design and location of the system). Applications for interconnection may be submitted by the utility account holder, but most installation companies will submit it on your behalf. If there are any red flags or missing information in the application, a utility may deny interconnection to the grid and request updates or resubmission.


Once your electric utility grants approval for the installation, you and your installer can proceed with the remainder of the installation process. The final step of solar interconnection, permission to operate, will occur post-installation of your solar equipment.


PERMISSION TO OPERATE (PTO)

After your solar panel system is installed on your property and your local government has finished their own inspection process, the final step towards connecting to the grid is receiving permission to operate (PTO).

As the first step towards PTO, utilities often send a representative out to your property to examine the system. At this visit, the utility representative typically looks at the inverter, the connection at the electrical panel, and the functionality of the system. They also typically install an additional meter (or upgrade an existing one) so that they can track your solar electricity exports to the grid, therefore enabling you to take advantage of the utility’s net metering incentive.


Following the inspection and meter upgrade, you’ll receive official PTO documentation notifying you that you can officially turn your solar panel system on for electricity generation.

HOW MUCH DOES SOLAR INTERCONNECTION COST?

The cost of interconnection will vary by utility company, location, and system size; for residential solar panel systems, the cost of interconnection typically ranges from no cost to a couple hundred dollars. You may not even see this fee when you go solar because many installation companies will include the cost of interconnection in the total cost for your solar energy system.


It is rare for small-scale, residential solar panel installations to require major grid upgrades for interconnection, but this often occurs with larger, commercial solar projects. The electrical grid is designed to take electricity from centralized power plants to homes and businesses that are using the electricity. The grid is equipped to handle smaller scale, residential installations pushing electricity back onto the grid.


However, because commercial installations produce more electricity, the grid needs to be equipped to handle this electricity generation and therefore may need upgrades to the existing grid infrastructure. Depending on the type of upgrade needed, these additional costs can vary substantially. Fortunately, many states have regulations that will limit the unexpected costs a solar customer would have to pay before the utility incurs the added fees.


For utility-scale solar installations, transmission upgrades of the local distribution system are even more frequently required for integration. Often times the cost of these transmission upgrades, which can be in the tens of millions, are borne by the solar project developer and not by the transmission operator. As such, in many parts of the country, a key barrier to higher levels of integration of utility-scale solar is the interconnection process, an obstacle that industry organizations–such as the Interstate Renewable Energy Council and the Solar Energy Industries Association–are actively working to mitigate.


HOW LONG DOES SOLAR INTERCONNECTION TAKE?

Similar to the cost of interconnection, the amount of time it will take to interconnect your solar panel system to the grid will largely depend upon two factors: your utility company and system size.

The interconnection application process takes two to three weeks on average for residential solar panel installations. Once the solar panel system is installed and passes local inspection, it takes another one to two weeks on average to receive permission to operate.


For large commercial projects, this process can be longer because the application and grid infrastructure often require a more thorough review to confirm everything is up to appropriate electrical safety standards.


WHAT ARE SOME OF THE LIMITATIONS FOR INTERCONNECTION?

Closed utility/circuit, size restrictions, …etc.


ABOUT NATIONAL ENERGY PARTNERS:

National Energy Partners (NEP) is a solar energy development company dedicated to bringing clean, renewable energy to businesses and residential consumers alike. At the forefront of the solar energy landscape, our passion is in fostering relationships through integrity, knowledge, and efficiency. NEP embraces the specific needs and challenges of each project, offering our valued clients the best experience through strategic management, trusted relationships, and eco‐friendly solar energy solutions. With over ten years of experience in the solar industry, our portfolio includes over $100 million of projects with more in development. Learn More at https://www.nepsolar.com


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