When you picture rooftop solar, you probably imagine workers strapped into harnesses, carrying solar panels, and clambering around on top of a building. But homeowners, businesses, and community groups aren’t done once the panels are up on their roofs. To sell excess solar energy, solar owners also need to plug their new systems into the grid — if the electric utility will let them.
While some utilities may process applications for rooftop solar projects that want to connect to the grid in a matter of days, others may take weeks or months. There are a number of plausible explanations for why some utilities are such laggards, including state policy requirements, physical grid limitations, or even intentional obstruction from utilities trying to block competition from rooftop solar. As utilities often aren’t required to publicly report these timelines, customers have little way of knowing whether utility delays in connecting their solar panels to the grid are reasonable or not.
The federal government, through the Energy Information Administration, should collect better information from electric utilities to help identify what’s holding solar back. In ILSR’s survey last year of distributed solar installers and developers, about two thirds of respondents identified interconnection rules (rules on how utilities connect local solar to the grid) as one of the barriers causing the greatest unanticipated costs and/or delays. Since solar owners have no choice but to work with their local monopoly utility, these delays slow solar growth and increase costs, blocking the power of communities to build a clean and equitable energy future. With nearly half of all American homeowners interested in going solar — potentially a huge boost in the fight against climate change — we need to make sure the grid interconnection process isn’t standing in their way.
Plugging Into the Grid
The process of hooking up a solar installation to the local utility’s power grid is known as interconnection. Both rooftop projects and big solar farms go through the interconnection process, but the steps involved can vary depending on project size and type, the utility’s own requirements, and state policies. Often, a project might need to apply to the utility for interconnection approval before installing the solar panels and again after installation for permission to start operating. The flowchart below, from the National Renewable Energy Laboratory, shows some of the common steps in solar project development. (In the chart, AHJ is Authority Having Jurisdiction and PTO is Permission to Operate.)
Delays to the interconnection process inconvenience solar owners and curb the expansion of local solar energy. “It’s very frustrating for our customers, because they’ve paid for a system, we’ve installed it, it’s ready to go. And it’s not producing any energy for them because the utility company is so slow,” shared one solar installer we interviewed last year. Unpredictable interconnection timelines also make it difficult to plan and complete what should be routine solar installation projects.
Find more insights into the barriers to distributed solar deployment in ILSR’s 2021 Local Solar Developer Survey.
State Rules Don’t Explain Variation in Utility Interconnection Times
Some states have implemented policies meant to streamline the interconnection process, like eliminating applications for certain project sizes and mandating timelines for both utilities and installers. These policies can apply to only one type of electric providers, like investor-owned utilities, and not others, like electric cooperatives or municipal utilities. Still, utility interconnection timelines often vary within a state, even when the utilities in question are subject to the same state policies.
This is evident in the National Renewable Energy Laboratory’s SolarTRACE database, which aggregates data on how long it takes rooftop solar installations to complete different steps of the project development process, including interconnection.
As an example, the graph below shows the wide variation in Arizona utilities’ median pre-installation interconnection timelines for rooftop solar projects up to 10 kilowatts, as reported in the SolarTRACE database. (In the graph, the wider bar shows the utility’s median timeline, and the narrower bar shows the statewide median for solar projects across Arizona, both in business days.) Despite some data limitations that make it hard to draw firm conclusions, such as small sample sizes for certain utilities, it’s apparent that interconnection differences exist across utilities in the state.
Analysis of the SolarTRACE data by the National Renewable Energy Laboratory similarly failed to find a clear connection between stricter state mandates and faster pre-installation interconnection timelines. For illustration, the graph below from the National Renewable Energy Laboratory study compares state timeline requirements to pre-installation interconnection approval timelines for projects up to 10 kilowatts installed in 2017-2019.
One way utilities may be able to sidestep state interconnection requirements is by putting project applications “on hold,” effectively pausing state-mandated timelines. In other cases, electric utilities may just fail to meet the timelines altogether, especially if regulators don’t hold utilities accountable to state interconnection requirements.
A Need for More Interconnection Data
Since they make money by selling energy and building infrastructure (or under-value customer-owned assets), electric utilities have an incentive to discourage customer-owned solar, and they often drag their feet when connecting local projects to the grid. At the extreme end, states have penalized some utilities for their interconnection failures, including a $1 million fine Minnesota issued to Xcel Energy for excessive customer complaints about the solar interconnection process.
The Solar TRACE database suggests there’s potentially a wider problem with lengthy interconnection timelines. However, we can’t be sure without more robust and transparent public data. The installations included in the SolarTRACE dataset account for less than a third of all relevant solar installations from the covered years (2017-2021), and SolarTRACE has no data at all for 16 states.
Electric utilities have a monopoly over the platform that solar installers need to reach their customers — the electric grid — and for the competitive solar marketplace to thrive, all market participants (researchers, advocates, solar companies, and regulators) need access to the data. Collecting the data in a national, standardized way, as could be done through the federal Energy Information Administration, and making the data publicly available would allow for greater oversight of utilities and make it easier to identify utility abuses of power.
Streamlining interconnection processes is essential to quickly and equitably deploy the affordable solar energy that communities across the country are clamoring for. In order to fight the climate crisis and address high energy burdens, we need to make it easy for all Americans to install solar panels and connect their systems to the local electric grid. To do that, we have to figure out how long it takes in the first place.