TODAY’S STUDY: WHY IT TAKES SO LONG TO GET YOUR ROOFTOP SOLAR CONNECTED

Comparing Utility Interconnection Timelines for Small-Scale Solar PV

Chelsea Barnes. July 2015 (EQ Research)

Executive Summary

Interconnection standards and procedures are designed to allow electric customers to safely connect distributed generation (DG) systems to the grid. Even as distributed solar photovoltaic (PV) systems become more common, the interconnection process can be lengthy and problematic for solar customers and installers, increasing overall system installation costs and delaying the benefits of PV generation. As DG penetration levels increase, utilities are more likely to deny DG system interconnection by raising safety and grid reliability concerns, further complicating and delaying the interconnection process. However, many utilities – even some with high levels of DG penetration – process and approve customer interconnection through quick, streamlined processes, illustrating that solutions to existing challenges are within reach.

In order to identify the root causes and potential solutions to these challenges, we surveyed PV installers that operate in utility service territories with the highest numbers of net-metered residential PV systems. With a focus on systems 10 kW or less, we asked installers to report the average number of days individual utilities took to grant permission to operate (PTO) after a system installation in 2013 and in 2014, and the number of applications denied by the utility due to grid reliability concerns for both years. We received data for 34 utilities in 13 U.S. states and Washington, D.C. Overall, utilities took longer to grant PTO in 2014 than in 2013, with average approval times increasing by 68%. For the 24 utilities operating under state interconnection procedures that prescribe PTO deadlines, the average PTO waiting period reported exceeded the regulated limit for 14 of those utilities. Rejections related to grid reliability concerns increased significantly in 2014, with installers reporting denials in 14 utility service territories. As DG penetration levels rise, PTO waiting periods are expected to increase unless efforts are made to streamline the process.

Through interviews with PV installers and utility interconnection staff, we identified a number of key issues that cause delays and best practices for expediting the interconnection process without sacrificing safety and reliability. Most state interconnection standards set timeline requirements for application review, but many have overlooked PTO timelines. Regulators can set the stage by mandating enforceable PTO timelines for utilities. The application process itself can be improved significantly by using an online application system and syncing the interconnection customer database with grid penetration and customer account databases. Utilities may consider consolidating pre- and post-construction paperwork in order to simplify the overall process. In general, process transparency and effective communication between utilities, installers, and customers can help resolve problems faster and improve the experience for customers. Transparency and communication can also help resolve problems related to grid capacity concerns. Allowing installers to access grid penetration maps and/or data can help avoid unexpected delays, rejected applications, and application backlogs. As grid penetration levels increase, broader transmission and distribution planning processes should include a plan for managing a growing number of interconnection applications. Streamlining the interconnection process not only helps utilities meet deadlines and improve customer satisfaction, it can also yield internal time and cost savings. Improvements to the interconnection experience will lower PV installation costs while helping states meet policy goals and objectives related to renewable energy and DG.

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Recommendations

Policymakers, regulators, utilities, installers, and customers can work together to make improvements to the interconnection process that will reduce PTO waiting periods, lower costs, and improve customer experiences. Based on the findings of this study, we present the following recommendations:

• Regulators should set firm deadlines for utilities to grant PTO after all paperwork and inspections are completed, and should consider decreasing those timelines when possible.

• Regulators should incorporate a strategy for accommodating increasing interconnection applications as part of larger transmission and grid optimization planning processes.

• Utilities should make grid penetration maps or data available to installers so that installers are aware of potential problem areas in advance.

• Utilities and regulators should work to streamline interconnection applications and PTO where possible, keeping in mind the potential for cost-savings and improved customer satisfaction.

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• Installers should systematically track utility response times in order to provide solar industry stakeholders, utilities, and regulators with clear examples of problems in the interconnection process, ultimately to inform policymaking.

• Policymakers and local jurisdictions should implement policies and procedures to expedite permitting and inspections for PV systems, while utilities and local jurisdictions should coordinate to streamline permitting and interconnection.

• Utilities should consider online, automated application systems to simplify application and approval processes.

• Automatic screening for grid reliability and penetration issues should be built into utilities’ online application systems, and pre-application studies should be made available to customers, especially in high-penetration areas.

• Utilities that do not implement online systems should improve their systems to facilitate better communication between customers, installers, and utility staff.

• Utilities should work to improve communication and transparency in the interconnection process, prioritizing customer satisfaction.

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Conclusions

As PV and DG system growth accelerates in the United States, problems with interconnection procedures have become more apparent. Delays in receiving PTO can be costly to installers and customers, reduce marketplace efficiency, and prevent states from achieving policy goals. Yet there are many opportunities to improve the interconnection process. Streamlining and improving interconnection procedures will require policymakers, regulators, utilities, installers, and customers to coordinate to identify problems and solutions. Utilities such as National Grid (MA), PG&E, and SDG&E have demonstrated that striving to continually improve the process can be beneficial to all parties. Such improvements can result in cost savings for utilities, customers, and installers, and will be key in achieving the nation’s full clean energy potential.

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