energy Program

Interconnection

WHAT IS INTERCONNECTION?

Interconnection  Gprocedures include the technical requirements and the legal procedures whereby a customer-sited generator interfaces with the electricity grid. Generally, the distribution utility must study and approve a proposed DG system within a framework established by the state’s public utilities commission. Utilities traditionally have determined which systems may connect to the grid and under what circumstances. This arrangement presents a conflict of interest that can result in significant barriers to customer-sited DG. For example, a utility might apply a complicated set of procedures which are better suited to a 1,000 MW nuclear power plant than to a 2 kilowatt (kW) residential photovoltaic (PV) system, or impose steep fees, redundant safety requirements and other obstacles.

While the underlying engineering standards and requirements are well-known (generally, the IEEE 1547 standard covers all the bases), an engineering standard is not a complete procedure. A complete interconnection procedure must address fees, timelines, insurance requirements and indemnification, forms and certain other issues to provide a comprehensive procedure that supports investment in customer-sited DG—either by individuals or by project development investors.

Wherever the standard is unclear, or where redundant or unnecessary tests or steps are piled on the existing national standards, the results can be costly, significantly affecting small generators. To ensure best practices and eliminate the potential for utility interference the interconnection process must be governed by a transparent, non-arbitrary set of provisions.

For example, assume residential customer Ray McSolar purchased a 2 kW system—more expensive per watt than a larger solar installation, but enough for his needs. His state’s interconnection rules forced him to install a redundant external disconnect switch, allowed his electric utility to charge him extensive fees plus required his system to endure significant testing—all of which added nearly 15% to his system cost and are unnecessary.
With an average monthly savings of $48.50 from the electricity Ray’s PV system generates, it will take him more than two years to pay off the red tape involved with the installation through unnecessary equipment and extraneous forms and fees. That is two years of superfluous payments toward items that are not technically required to operate a safe, well-designed PV system.