What is solar interconnection and why does it take so long?

SPW editor-in-chief Kelly Pickerel opposes the California project that the team installed in 2017.

Installing a solar PV system on a home may take as little as one day, but the timing to connect that system to the grid and start generating electricity is still unpredictable. What happens during residential interconnection, and why is this bureaucratic utility process still holding back projects in the increasingly mature solar market?

Solar Energy World spoke with Interstate Renewable Energy Council (IREC) attorney Sky Stanfield to learn more about residential interconnection and what can be done to improve the process.

What is interconnection?

Interconnection is the approval process by which utilities study a solar energy project to identify potential grid effects. If the utility determines that there will be consequences — for example, if the service transformer is not properly sized to absorb the extra power — the utility then identifies the changes that need to be made to the grid or project to mitigate them. Then the utility company determines who is responsible for the bill.

Some utilities are notorious for denying applications, requiring changes to solar projects or expensive additional studies that cause more latency.

The process

In most cases, the utility studies the potential impacts of the project before granting a permit to ensure system changes can be made in advance. In some states with more solar energy, small residential projects can be installed before they even receive an interconnection agreement because they rarely impact the grid.

After the interconnection agreement is issued and the project is installed, there are some instances where the utility company will send a representative to the site to perform a physical assessment (sometimes called witness testing) to verify that it is installed as planned and working properly .

Often in that step in the process, the utility will physically install the special meter that will keep track of the system’s energy and the net meter benefits a homeowner will receive. This installation step can cause delays as it involves truck roll and manual labor.

Some utilities instead ask contractors to submit photos of the project as verification. If the project passes that assessment and is allowed to operate (PTO), the owner can turn on the system to generate its own electricity and, if applicable, collect credits for netting.

Stanfield said that receiving PTO approval is the part of the interconnection process that causes the most headaches for project owners.

“One of the problems with many interconnection standards, especially historically, was that the rules defined the process up to the interconnection agreement and then maybe had a section on witness testing, but there would be no timeline for when you would get that official permission to operate,” said Stanfield.

The PTO isn’t a physical switch somewhere – it’s paperwork. Some utilities do set a time frame for issuing the PTO, but often still miss the deadline.

“Here’s a customer who has panels on his roof and they say, ‘I want to start saving money.’ If the utility is just sitting on the paperwork, it’s pretty frustrating,” Stanfield said. “Then the installer kind of gets stuck between the client and the utility.”

Most of the time, the paperwork about the interconnection just languishes because of a shortage of utility personnel who can complete it.

“The bottom line is, how many people does the utility have processing applications and what internal processes do they have to keep themselves organized and manage the workflow?” she said.

The delay in approval may also be due to the installer, for example if contractors submit incomplete or erroneous interconnection requests. The utility must then notify the contractor of errors, the contractor must resubmit, and the process drags on.

Stanfield said most states offer accelerated interconnection processes for smaller projects, where the application essentially includes the interconnection agreement. If there are no paperwork errors and no necessary grid upgrades or project changes, the utility will co-sign the application, return it, and give the customer and contractor the go-ahead to install the system.

IREC is urging more states and localities to adopt simplified processes to reduce the soft cost of wait times. Utilities can help accelerate solar projects by implementing efficient processes and hiring the right staff to handle the amount of interconnection applications in their queue.

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