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

SPW editor-in-chief Kelly Pickerel turns on the California project the team installed in 2017.

Installing a solar PV system on a home can take as little as one day, but the timing to connect that system to the grid and begin electricity generation is still unpredictable. What happens during residential interconnection, and why is this bureaucratic utility process still holding up projects in the ever-maturing solar market?

Solar Power World talked to Sky Stanfield, attorney for the Interstate Renewable Energy Council (IREC), 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 project to identify any potential impacts it will have on the grid. If the utility finds there will be impacts — like if the service transformer is not sized appropriately to take on the extra power — the utility then identifies the changes that must be made to the grid or the project to mitigate them. Then the utility determines who is responsible for the bill.

Some utilities are notorious for denying applications, requiring changes to solar projects or costly additional studies that add more waiting time.

The process

In most cases, the utility studies the project’s potential impacts prior to granting a permit to ensure that system changes can be made in advance. Some more solar-forward states allow small residential projects to be installed before they even receive an interconnection agreement since they rarely have grid impacts.

After the interconnection agreement is issued and the project is installed, there are some cases where the utility will send a representative to the site to perform a physical review (sometimes called witness testing) to ensure it was installed according to plan and is operating correctly.

Often, at that step in the process, the utility physically installs the special meter that tracks the system’s energy and the net-metering benefits a homeowner will receive. This installation step can cause delays since it involves a truck-roll and manual labor.

Some utilities instead ask contractors to submit photos of the project as verification. If the project passes that review and receives permission to operate (PTO), the owner may turn on the system to begin generating their own electricity and collecting net-metering credits, if applicable.

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

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

The PTO is not a physical switch somewhere — it’s paperwork. Some utilities do set a time frame for issuing the PTO, but they often still miss the deadline.

“Here, you have a customer who has panels on their roof, and they’re like, ‘I want to start saving money.’ If the utility is just sitting on the paperwork, that’s pretty frustrating,” Stanfield said. “Then, the installer gets kind of caught in the middle between the customer and the utility.”

Most times, interconnection paperwork just languishes because of a shortage of utility staff that can complete it.

“It comes down to: How many people does the utility have processing applications and then what internal processes do they have to keep themselves organized and manage the workflow?” she said.

The approval holdup could also be the fault of the installer — for example, if contractors submit incomplete or erroneous interconnection applications. The utility then has to notify the contractor of errors, the contractor has to resubmit and the process drags on.

Stanfield said most states do offer expedited interconnection processes for smaller projects, where the application essentially contains the interconnection agreement along with it. If there are no paperwork errors and no necessary grid upgrades or project changes, the utility will counter-sign the application, send it back and give the customer and contractor the go-ahead to install the system.

IREC is pushing for more states and localities to adopt simplified processes to lower those soft costs incurred with waiting time. Utilities can help speed up solar projects by instituting efficient processes and hiring the appropriate staff to process the volume of interconnection applications in their queue.

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