Electricity customers are lining up to generate their own clean, affordable solar energy, but to get it to them, solar developers must navigate the impediments of a congested and outdated electricity grid.
For this episode of the Local Energy Rules podcast, host John Farrell speaks with Yochi Zakai, attorney with Shute, Mahaly, and Weinberger representing Interstate Renewable Energy Council (IREC). The two discuss hosting capacity analysis and how publicly shared grid information can help solar developers, electric customers, and others make more informed decisions.
Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.
Podcast (localenergyrules): Play in new window | Download | Embed Subscribe: RSS
Yochi, welcome to the Local Energy Rules. Hey, thanks for listening to Local Energy Rules. If you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes. As you’ve probably noticed, we don’t have any corporate sponsors or ads for any of our podcasts. The reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, our listeners. Your donations not only underwrite this podcast, but also help us produce all of the research and resources that we make available on our website and all of the technical assistance we provide to grassroots organizations. Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ilsr.org and click on the donate button. And if making a donation isn’t something you can do, please consider helping us in other ways. You can help other folks find this podcast by telling them about it, or by giving it a review on iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this and ILSR’s other podcasts, Community Broadband Bits and Building Local Power. Thanks again for listening. Now, back to the program. Well, having tried to tongue tie you with a challenging off the cuff question at the end here, Yochi, thank you so much for taking the time to explain this complicated issue and its importance to distributed energy. Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.
Yochi Zakai:
Yeah, California’s map is also supposed to include information that would be helpful for customers looking to install equipment that uses electricity from the grid, called loads. And we’re commonly looking at installing things like electric vehicle chargers or electric heat. As the listeners likely know, if we’re going to slow climate change, we need to stop using fossil fuels in our cars and to heat our buildings. But in order to really decarbonize the transportation and building sectors, California plans to use renewable electricity to charge the batteries and electric vehicles and to heat buildings.
John Farrell:
As rooftop solar and other distributed energy resources continue to grow, we need more information about where on the grid it can best plug in. In most states, developers have to ping the utility company for information for every site and size of project. Some states are making things easier. Yochi Zakai, attorney with Shute, Mahaly, and Weinberger representing the Interstate Renewal Energy Council explains the purpose of a hosting capacity analysis and how it can help facilitate more clean energy resources in your neighborhood. I’m John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance and this is Local Energy Rules, a bi-weekly podcast sharing powerful stories about local, renewable energy.
Yochi Zakai:
Hey John, thanks for having me today.
John Farrell:
So I always like to know a little something personal about folks who are on the program. So I’m always mining bio is before these conversations, and I see that from your bio that you brew beer. So this is a very into the weeds pun. So this is about that integration capacity analysis ICA, uh, out there that you were working on in California. Have you ever attempted any brews that you give a name that alludes to your work, like a double ICA?
Yochi Zakai:
That’s a good idea. Um, unfortunately, I have not. I’m a new father, so recently my brew schedule has taken a back seat to parenting, but last year my brews were all baby themed brews. So I had a third trimester ale and a bebe French saison.
John Farrell:
That’s wonderful. I definitely appreciate folks who were able to find good punny names. And I think I worked really, really hard to try to come up with double ICA and I apologize for that and to everyone else listening. Um, but I certainly am sympathetic. Congratulations on being a new father, that is a lot of work and it’s completely understandable that the brewing might fall off for a little bit.
Yochi Zakai:
That’s all right. Hoping to pick it back up soon.
John Farrell:
Yeah. So more seriously, we’re seeing across the United States a surge of interest in distributed energy, things like solar and batteries to provide resiliency. If you talk about places like California, where they’ve had wildfire-induced power outages, you’ve got this recent freeze in Texas where the grid went down for days for some folks… practically speaking folks still want to be connected to the electric grid and use their rooftop solar, use their batteries, as a supplement, and it also means that the energy that they own can help the grid. I guess a question is here is can you, as a developer, as a customer, can you install new rooftop solar in any neighborhood?
Yochi Zakai:
Yeah, generally you can, but it might require some changes to the grid. So today’s distribution grid is a product of our legacy electricity system where utilities designed it to move electricity that was generated at large plants that are located far away from customers to transmit that electricity over high voltage lines and then distribute it through the neighborhoods to customers. And the grid was built for this one way flow of electricity. But as more customers decide to install generation in their homes, the way that the distribution grid operates is also going to change. Instead of having this one way flow of electricity, just from the utility’s plant to the customers, electricity produced at one rooftop might end up serving the needs of other homes on the same block, or even around the same neighborhood. Utilities didn’t build the distribution grid to handle this two way flow of electricity. So sometimes a utility is going to require upgrades to the system in order to facilitate the connection of new distributed generation. While most of the time customers can install rooftop solar without a problem, in some cases, especially in areas that have a lot of other generation expensive upgrades can be needed.
John Farrell:
What we’re talking about might be, I think, Adam Browning at vote solar was probably the first person that, that I came across, who was talking about solar being contagious. And this is that effect where you see someone in your neighborhood who’s got it. You go to find out a little bit more about it. You realize, Hey, this is a good deal. You’ll do it too. So you have some neighborhoods like that, maybe where folks have clustered and installed these rooftop solar arrays in a way that puts more of a strain on the grid than say if they were all dispersed around the city.
Yochi Zakai:
Yeah, you could see that. Or maybe you’re looking at a grid in a rural area that’s particularly well-suited for a ground mounted solar project. And if they’re in there, could end up being a cluster in an area like that as well.
John Farrell:
That segues really nicely into my question about other forms of solar generation, like community solar in Minnesota, for example. Independent developers have been building community solar projects that serve over 12,000 households and businesses now, I think somewhere over 800 megawatts of projects – that’s the equivalent of a fairly significant utility scale project. Does the connection process differ for these larger, but you know, still sort of community scale projects that are more like a megawatt then for the rooftop solar projects that we were talking about?
Yochi Zakai:
Yeah. Yes. Larger projects are more likely to trigger those expensive grid upgrades I was talking about. Community solar developers put a lot of work into figuring out where to site their projects. They’re going to consider who wants a solar project on their property, the average intensity of the sun in the area, local permitting requirements. And as I mentioned before, the potential for the expense of upgrades. So, you know, in most states, solar developers don’t have any publicly available resources which help them figure out which sites are more likely to trigger these upgrades or which can host new distributed generation without upgrades. So in this case, developers end up sending utilities a lot of speculative applications for projects, and then they make the decision to continue or not after they hear back from utility if the site can actually host a new project or not.
John Farrell:
I like the way that you’ve given that context about, you know, without that public knowledge, you actually have a lot of resource consumption, both for developers and for the utility of them sending in applications, just trying to get more information about whether or not they can do a project. So what it sounds like is there’s really, in some ways, a two way knowledge exchange that has to happen. A project developer is trying to figure out, you know, where can I affordably connect to the grid? Where does the grid have capacity? And the utility is wanting to know where are folks trying to plug in? And if there are any barriers to the grid infrastructure, they also need that information. And that’s where these studies that I sort of preface in the introduction, they’re either called an integration capacity analysis or a hosting capacity analysis come from. Can you explain a little bit about what information these kinds of analyses provide and how they can be used to connect solar or batteries or electric vehicles or other useful things to the grid?
Yochi Zakai:
Yeah. Utilities can proactively run studies on the distribution grid to figure out the largest size of distributed generation that a site can accommodate without upgrades. As you mentioned, we call these hosting capacity analysis generally across the country, California being special at everything also came up with their own name for it. So in California, they’re referred to as integration capacity analyses, but it’s really the same thing. The studies produce a wealth of information that developers can use to cite and design the systems so they don’t trigger upgrades. And in some cases they can even make the grid more reliable. Utility has published the information in a web based maps. So if you’re on a hosting capacity map and you click on a particular spot on the distribution grid, you get a pop-up box with a wealth of data that helps customers design a system. You can of course find the hosting capacity for new solar generation, but also the voltage of the line, the load profile, if certain equipment is installed on the circuit, and the amount of other generation that’s on the circuit. The hosting capacity results also include detailed power flow modeling information, or what I like to call geeky grid data. With geeky grid data, developers can design the solar project that selectively charges from an energy storage system to avoid the expensive upgrades. For example, the system could be designed to send power to the battery in hours when the grid is constrained and can’t accept power. So instead of spending a lot of money on upgrading the grid, this allows a customer to spend a little money, installing her own energy storage system, multiple uses.
John Farrell:
We’re going to take a short break. When we come back, we discuss which states and utilities have adopted a hosting capacity analysis to streamline distributed energy adoption, whether it can automate grid interconnection, and what happens to distributed energy development in the absence of good grid data. You’re listening to a Local Energy Rules interview with Yochi Zakai, attorney with Shute, Mahaly, and Weinberger representing the Interstate Renewable Energy Council.
John Farrell:
I love this idea about how that detailed information can allow these projects to sort of play nice with, at a minimum, but, or even better, support the grid. I guess the one key question is how many places around the country, can you get a map like that and, and see what the grid is like and how you can plug in? Is this widespread, like lots of utilities are doing this, or is this not such a common thing yet?
Yochi Zakai:
It’s becoming more and more commonplace in areas that have robust distributed energy resource markets. So we’re seeing maps currently published in California, New York, Massachusetts, and Hawaii. And there are a lot of other places that have either published maps or are looking at exploring to publish maps right now. So it really is something that’s gaining traction, both among some utilities that are publishing it voluntarily like Pepco in the Mid-Atlantic, and others that have been required to do so by their regulators, like NV energy in Nevada.
John Farrell:
You know, the idea behind these studies is that the more easily accessible information that’s out there about the grid, the more cost-effective distributed energy we get, we get cleaner electricity. We’re supporting folks during grid outages when they have energy storage. Let’s talk about one of these states that is sort of leading on this. That’s got a lot of distributed energy what’s happening with the integration capacity analysis in California. How has it being improved beyond having that information already on a map?
Yochi Zakai:
Yeah, California’s map is also supposed to include information that would be helpful for customers looking to install equipment that uses electricity from the grid called loads. And we’re commonly looking at installing things like electric vehicle chargers or electric heat. As the listeners likely know, if we’re going to slow climate change, we need to stop using fossil fuels in our cars and to heat our buildings. But in order to really decarbonize the transportation and building sectors, California plans to use renewable electricity to charge the batteries and electric vehicles and to heat buildings. When these maps were first published, IREC noticed that the results provided for the load hosting capacity analysis appeared to be wrong. Utilities agreed with us that it didn’t seem quite right, but in the initial rollout, they prioritized completing their maps and the integration capacity analysis tools for solar developers. Instead of for those who are looking to install new load. IREC filed a motion with the California Public Utilities Commission, which regulates the state’s investor owned utilities, to ask them to order the utilities to come up with a plan to make the load hosting capacity analysis more useful for customers who are really seeking to design and site electric vehicle chargers and new building loads. In January, 2021, the commission issued an order requiring the utilities to begin that process and make other improvements to the map. IREC’s really looking forward to working with the utilities to see these changes implemented.
John Farrell:
Yeah so to me, this is fascinating because when I have been looking at the hosting capacity analysis and the work that we’ve done directly in Minnesota, we have been almost entirely focused on this notion of where can we plug in new power generation and not where are we going to use energy, but of course, in a state like Minnesota, when we talk about building electrification for like heating load, that could be a really big load. Cause we’re talking about a lot of heating need in the winter. Is that kind of information, that sort of thing that, like, a homeowner is going to need in order to electrify their home heating system? Or are we talking more about, it would be a commercial building or like a, a DC fast charger, a high capacity charger for an electric vehicle?
Yochi Zakai:
It’s a good question. I think it has uses for both. Certainly the two things I like to talk about with hosting capacity maps are both the citing and the design elements. So if you’re someone looking to install an electric vehicle charger, it’s likely they, you could consider putting that at one of multiple sites. Or if you’re looking to design a heating load that’s going in a particular building, you can’t move the buildings. So it’s going to go in one place. But what you could do is modify the design of the system, such as to use a more efficient system, which would decrease the total load and mean that you could connect without upgrades, or you could say, well, I think what I’m going to need here is a battery system in addition to my new loads, or a solar system in addition to my new loads, which would allow me to reduce my total impact on the system and avoid those expensive upgrades.
John Farrell:
I may actually ask you specifically about that because I realized we haven’t said it out loud – is something that you and I both know, but typically the policy on the electric grid around the country is he who requires the upgrade pays for the upgrade, right? So that’s why this kind of analysis is helpful is if I can find out ahead of time I’m going to trigger a need for an upgrade, I can then go about avoiding triggering that expense at all, by designing my system in a different way.
Yochi Zakai:
Yeah. There have been certain states such as California that have decided that the need for a grid upgrade which is triggered by a small residential rooftop system should be shared by everybody who pays for the electricity grid, but that’s the exception and not the rule. And in most states, what you see is even for a small rooftop solar system, if you’re the last person in the neighborhood that wants to add solar and you end up being the new system that triggers that expensive upgrade, you’re responsible for the cost of that entire upgrade. Even if there are a dozen other systems in the neighborhood that came before you that are contributing to the need for that upgrade.
John Farrell:
I feel like we could spend an entire episode just talking about that policy by itself and the implications it has for how we’re going to electrify the grid system and how California’s thinking about that differently. But I want to ask you something more specifically about this hosting capacity analysis, which I think is really important in terms of the near term impact. It seems like you’re getting a lot of really good information about whether or not a project can connect, if there’s enough capacity, whether that’s new load or new generation from a solar project or something like that, does that mean that a really good integration or hosting capacity analysis can automate grid connections? You know, can it make the grid essentially plug and play for all the things that we want to connect?
Yochi Zakai:
Unfortunately, it’s probably not possible to automate all the new grid connections because if the grid is not designed to manage fluctuations, the consequences can be as insignificant as a wall clock showing the wrong time or as severe as burns and fires. So hosting capacity analysis can be used to automate and increase the precision of some of the most problematic technical review processes that the utilities use when they evaluate new grid connections. Last fall, California became the first state in the country to make a final decision to use the hosting capacity analysis to automate some of these processes, but it’s not possible to completely automate them, but certain parts of them can be. IREC was really excited about this decision out of California, because it means that developers are going to be able to rely on publicly available maps to design and site projects and be fairly certain that the projects will be approved if they’re within the size limits provided on the map. That means that developers are going to spend less money designing projects that would require expensive upgrade and utilities are going to spend less money reviewing projects that won’t get built because customers can’t afford the upgrades in the first place.
John Farrell:
You know, I think it’s just such an interesting, it highlights such an interesting issue about cost allocation in a way. And this has come up before when I’ve talked with folks from the clean coalition who also do a lot of work in California about a bidding process for procurement, for new, renewable energy. But we are so focused on in a public utilities commission proceeding about the costs to utilities and utility customers. Cause we, those are transparent. We’re not, we know those utilities will obviously volunteer that information. When we talk about how we’re going to do new policy, we don’t often talk about the costs to independent developers, right? Like there’s hundreds or thousands of companies now that are developing distributed energy resources in California. If the hosting capacity can really, a really well-designed one can, cut down on the time and money they spend developing projects. Well, that’s better for everybody, but we don’t necessarily see that on a spreadsheet, in a proceeding in the same way that we might, what the utility would talk about. Is that something you ever have to contend with about how, how do you deal with the fact that a lot of these costs are sort of off the balance sheet in those proceedings?
Yochi Zakai:
It’s a question that utilities like to bring up a lot. They ask, you know, what is the cost / benefit of the investment in a new tool like these hosting capacity maps. And unfortunately we have a really hard time finding both sides of the balance sheet when it comes to these hosting capacity analysis. Utilities aren’t separately accounting for the processes that take to develop these hosting capacity maps. So we don’t have a clear sense of exactly what it takes to develop and publish these detailed maps. And as you mentioned from the other side, you know, developers have a hard time saying ‘I saved this much money by not filing a speculative project’ because they’re just doing their jobs better and designing better. There isn’t really a strong counterfactual that you could compare to. So it’s, it’s really tough if there’s going to be a regulator that is going to ask for a very strict cost benefit analysis using quantify dollars. This is going to be something that is difficult to justify and the utilities have done their part of it by not consistently and accurately recording the costs associated with these projects either.
John Farrell:
So you know, California, like you said, has done a couple of things good. In the last six months, we’ve got some automation now using the integration capacity analysis in the interconnection process, some things are going to be more streamlined. And then now you’ve got this additional analysis around load and electrification. What happens without these kinds of changes or when utilities in the many different places across the country where utilities don’t do this? Does it mean that it’s literally harder to connect things like rooftop solar, or do building electrification?
Yochi Zakai:
For sure. Delays in the utility study project are unfortunately really common in areas with active solar markets. And when you don’t have these types of grid transparency tools that IREC is promoting, you know, projects take longer to get through the study process because they get stuck there when they don’t mean to. And there tend to be more projects stopped in the study process as well.
John Farrell:
Is that, just out of curiosity, I know that the Minnesota public utilities commission recently fined Xcel Energy a million dollars for delays and interconnection for, I think in particular, community solar projects. Is hosting capacity, for example, a better analysis, a way that they could help solve that problem by making sure that there’s more information available to developers?
Yochi Zakai:
Certainly yeah. And as we’ve mentioned, Xcel does have the hosting capacity analysis available, but unfortunately there’s one big problem with Xcel’s analysis and that’s, as of now, it’s only updated annually. And so developers have this like one snapshot in time that they can look at, but that snapshot is really old and they’re trying to use it to design projects throughout the year. So we’ve consistently been asking for a monthly update to the analysis, which would help Xcel manage that backlog.
John Farrell:
Just thinking about having spent some time in their hosting capacity analysis spreadsheet as well. That based on the amount of community solar we see developed every year, somewhere between a hundred and 150 megawatts in recent years and the amount of hosting capacity that Xcel has reported, we’re talking about as much as like 10 to 15% shift from year to year and how much capacity might be available. So a year’s a long time to wait when that kind of change is happening.
Yochi Zakai:
Yeah. You know, projects are being proposed every month of the year. So there’s really no reason to wait for an annual process to, to make the update.
John Farrell:
So I kind of alluded to this earlier, but is California the only state that is requiring utilities to do this kind of analysis, where else is this happening? Where, where is this… Where would this be important to have happen? Maybe that it isn’t happening already. Cause we’ve talked about, as you mentioned, California, Hawaii, New York, Massachusetts, some of these leaders in solar, where might it be missing?
Yochi Zakai:
You know, I don’t know, off the top of my head, uh, where I’m trying to think we haven’t been active in asking for it in other places, or we asked for it in North Carolina. But to really answer that question, I would want to like kind of get a list of the most active solar markets and just compare that to my list of hosting capacity maps, which I haven’t done. Sorry.
John Farrell:
Well no, not at all. Maybe what we’ll do is, uh, ILSR just published in the last few weeks its States of Distributed Solar report, which has a look at each state and their total solar capacity and how, what percentage of it comes from distributed resources, which is not necessarily a forward-looking thing, but does give you a sense for a degree which we’re seeing a significant growth in a distributed solar market, which is of course where this hosting capacity piece really matters.
Yochi Zakai:
No problem. Thanks for having me, John.
John Farrell:
Thank you so much for listening to this episode of Local Energy Rules to discuss how hosting capacity analysis can facilitate more distributed, clean energy. Joining me was Yochi Zakai, attorney with Shute, Mahaly, and Weinberger representing the Interstate Renewable Energy Council. On the show page, look for links to the IREC website for more information about their work and recent improvements in California’s integration capacity analysis. On ILSR’s website, you can find more coverage on hosting capacity and other policies to advance clean energy, including our recent community power scorecard. It ranks all 50 states on their energy democracy rules. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy
Expensive Electric Accommodations
Electric distribution grids were built as top-down avenues for delivering electricity from large, centralized power plants. Now, as distributed generation and energy storage become more popular, utilities are having to accommodate the two-way flow of electricity. To do so, the utility often needs to upgrade the distribution system. This is especially true in areas where there is a lot of distributed energy development.
The grid was built for this one way flow of electricity. But as more customers decide to install generation in their homes, the way that the distribution grid operates is also going to change.
Solar developers looking to connect their new generation source to the grid may trigger the need for a system upgrade. In most cases, whoever triggers a grid upgrade must pay the upgrade costs — which can be severe. Larger solar gardens are more likely to trigger upgrades. If a developer is surprised by these costs, and building their solar garden is no longer feasible, they may be forced to drop their plans entirely. Hosting capacity analysis can provide key grid information proactively for individuals hoping to plug in.
Hosting Capacity Analysis
In a hosting capacity analysis, utilities compile information about the electric grid and publish it online for the use of developers and other stakeholders. The resulting map has pop-ups with data on various localized grid conditions: how much generating capacity that section of the grid can still handle, the voltage of the line, and the existing generation on that part of the grid.
This information, which Zakai calls “geeky grid data,” helps customers and solar developers make decisions.
The studies produce a wealth of information that developers can use to cite and design the systems so they don’t trigger upgrades. And in some cases they can even make the grid more reliable.
Utilities in seven states are required to publish hosting capacity maps. Some utilities even publish this information voluntarily. Zakai says that generally, hosting capacity analysis is most common in states with robust distributed energy development, including Hawaii, Massachusetts, and New York.
Some Truth to California Exceptionalism
California’s hosting capacity analysis process, called integration capacity analysis, provides more useful information than the hosting capacity maps published in other states. This is thanks, in part, to a petition from Zakai and the Interstate Renewable Energy Council (IREC). IREC asked the state of California to consider all kinds of interconnecting loads, including electric vehicle chargers, electric heat, and solar generating power, when implementing its integration capacity analysis. In January 2021, the California commission filed its petition to make changes to the analysis and its resulting map.
In California, grid users also uniquely share the cost of grid upgrades, rather than the typical ‘cost-causer pays’ model used in other states.
Automating and Simplifying the Interconnection Process
It is not possible to automate all new grid interconnections, says Zakai. Still, hosting capacity analysis could simplify many of the steps within this process. California is the first state in the country to try using hosting capacity analysis to reduce the complexity of the interconnection process.
Hosting capacity analysis can be used to automate and increase the precision of some of the most problematic technical review processes that the utilities use when they evaluate new grid connections. Last fall, California became the first state in the country to make a final decision to use the hosting capacity analysis to automate some of these processes
Thanks to new rules adopted by the California Public Utilities Commission, solar developers can use the public hosting capacity maps to design and site projects with more certainty. As developers make more informed proposals, utilities will not waste resources reviewing projects that will never get built.
Read ILSR’s comments to the Minnesota Public Utilities Commission detailing how Hosting Capacity Analysis Could Simplify Grid Interconnection for Distributed Energy Resources.
Episode Notes
See these resources for more behind the story:
- Check out IREC’s press release on California’s new hosting capacity rules.
- Read our report on the States of Distributed Solar.
For concrete examples of how cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.
Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.
This is episode 135 of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.
Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering for this episode is by Drew Birschbach.
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.
Featured Photo Credit: PublicDomainPictures via pixabay
