Solar interconnection: What you need to know

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There are several important steps along the path to installing solar: obtaining quotes, choosing your equipment, selecting an installer, and installing it. Arguably the most important step is connecting your solar energy system to the utility grid, commonly known as solar interconnection.

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Most 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 use more electricity than your solar panels produce. 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 utility customer offering net metering, you will receive credits for this electricity to apply toward a future electric bill.

While installing an off-grid solar panel system and avoiding the interconnection process entirely is possible, it's often not cost-effective. 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 to sever 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.

Two major steps are 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). The utility account holder may submit applications for interconnection, but most installation companies will submit them 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 approves 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 its 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 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 system's functionality. They also usually 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.

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 of 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 can 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 require upgrades to the existing grid infrastructure. Depending on the upgrade needed, these additional costs can vary substantially. Fortunately, many states have regulations limiting the unexpected costs a solar customer would 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, the solar project developer and not the transmission operator bears the cost of these transmission upgrades, which can be in the tens of millions. 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.

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 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.

The first step towards going solar is to research your options. By registering on the EnergySage Solar Marketplace, you can obtain up to seven solar quotes to compare side-by-side. These quotes will be custom to your property and include costs, savings estimates, and information about solar equipment. If you'd prefer to start with a quick ballpark on what it would cost to go solar, try our Solar Calculator.

Find out what solar panels cost in your area in 2024
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