TODAY’S STUDY: Hooking Up With Solar

Comparing Utility Interconnection Timelines for Small-Scale Solar PV 2nd Edition

Chelsea Barnes, Justin Barnes, Blake Elder & Benjamin Inskeep, October 2016 (EQ Research)

Executive Summary

The rules and procedures that govern how a distributed solar system connects to the grid are crucial to ensuring grid safety and reliability, but standards vary widely across the United States, and procedures can be long and complicated. 1 As solar’s popularity continues to grow, solar customers and installers are experiencing longer timelines for receiving application approval and permission to operate (PTO) as utilities’ existing procedures and resources are unable to keep up with demand. Furthermore, increasing levels of distributed generation (DG) systems are beginning to put pressure on grid capacity, and more utilities are requiring expensive upgrades in order for systems to connect to the grid, adding delays and complications for customers wishing to install even relatively small systems. However, as utilities and regulators gain more experience with solar and other DG systems, technical, policy, and administrative solutions are allowing utilities to process large numbers of DG applications through quick and easy procedures.

In the first edition of this report, published in July 2015, EQ Research quantified interconnection timelines for PV systems 10 kilowatts (kW) or less by surveying PV installers regarding timelines for PTO in 34 utilities’ service territories for 2013 and 2014. In this second edition, we collected data for 62 utilities with the highest amounts of residential PV customers, covering 20 states and Washington, D.C., and quantified both pre-construction approval timelines and PTO timelines in 2014 and 2015. Installers were asked to report the average number of days individual utilities took to approve initial applications for interconnection (i.e., pre-construction) and to grant PTO after a system installation for both 2014 and 2015, as well as the number of applications denied by the utility due to grid reliability concerns. Overall, utilities took longer to approve interconnection applications and PTO in 2015 compared to 2014, although the delay increases were much more significant for PTO than for pre-construction applications. For preconstruction waiting periods, the median utility wait time increased from 14 in 2014 to 18 in 2015; for PTO waiting periods, the median utility wait time increased from 28 in 2014 to 45 in 2015.

Through interviews with PV installers and utility interconnection staff, we identified a number of contributing factors that cause delays, as well as best practices for streamlining the interconnection process while maintaining grid safety and reliability.2 In order to accommodate increasing application numbers, utilities must move toward online application systems and increased automation to reduce administrative burden. Additional applications may also require additional staff time and changes to employee workflow. Utilities and regulators might consider increasing the transparency of grid capacity in order to allow installers to avoid a preconstruction application and to help them avoid areas of the grid with capacity concerns. Policymakers should make improvements to regulations regarding interconnection procedure timelines, which are often unclear or absent. As states continue to work toward more aggressive renewable energy goals, comprehensive distribution planning should incorporate plans for DG growth and integration. Streamlining the interconnection process can save customers, installers, and utilities money, and can bring renewable energy to a more level playing field with traditional energy resources so that states can more easily meet energy and environmental policy objectives…

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Recommendations

Policymakers, regulators, utilities, installers, and customers can work together to make improvements to the interconnection process that will reduce interconnection timelines, lower costs, and improve customer experiences. Based on the findings of this study, we present a series of recommendations for policymakers, utilities, and installers, described below.

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Policymakers

1. Legislators and regulators should consider requiring online application and payment systems, requiring standardized application forms, and requiring utilities to post application checklists and up-to-date forms and instructions on public websites. Requirements for wet signatures should be repealed.

2. Regulators, AHJs, and utilities should collaborate to standardize application procedures, requirements, and forms across different jurisdictions where possible. Policymakers and AHJs should implement policies and procedures to expedite permitting and inspections for PV systems, while utilities and AHJs should coordinate to streamline permitting and interconnection.

3. Regulators and utilities should work to combine interconnection applications and PTO where possible, keeping in mind the potential for cost savings and improved customer satisfaction.

4. Legislators and regulators should consider the impact of policy and incentive program uncertainty and “stop-and-go” incentive programs on utility resources when designing policies and incentive programs, and favor long-term step downs or gradual funding disbursements over other incentive program designs.

5. Legislators and regulators should set clear, firm deadlines for utilities to approve interconnection applications, exchange meters when necessary, and grant PTO after all paperwork and inspections are completed, and should consider reducing those timelines when possible.

6. Regulators should require utilities to post interconnection queues with clear project status information. Policymakers should require regular interconnection timeline performance reports.

7. Regulators should require utilities to make grid capacity maps or data available to installers so that installers are aware of potential problem areas in advance. Furthermore, regulators should incorporate a strategy for accommodating increasing interconnection applications as part of larger distribution planning and grid modernization processes.

8. Regulators, utilities, AHJs, installers, and customers can all benefit from the experiences and lessons learned in other jurisdictions and from communication among stakeholders. Each of these industry participants can encourage and facilitate workshops, webinars, trainings, and other education and outreach activities to enable such learning experiences. New policies and procedures should always be accompanied by education and outreach efforts.

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Utilities

1. Utilities should consider voluntarily implementing online, automated application systems to simplify application and approval processes. Utilities should create online payment options for customers. Requirements for wet signatures should be repealed.

2. Utilities that do not implement online systems should systematically improve their systems and processes to facilitate better communication between customers, installers, and utility staff. Changes to application procedures and requirements should take into account utility employee workflow and administrative procedures, and changes to internal procedures should be considered. Utilities should ensure that appropriate staff time and resources are allocated to interconnection departments especially where application numbers are rising.

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

4. Utilities should collaborate with regulators and AHJs to standardize application procedures, requirements, and forms across different jurisdictions, and to streamline permitting and interconnection processes where possible.

5. 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 higher DG penetration areas.

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

7. Utilities should ensure that an appropriate number of meters are in stock and consider initiating the meter exchange process earlier in the interconnection process.

8. Regulators, utilities, AHJs, installers, and customers can all benefit from the experiences and lessons learned in other jurisdictions and from communication among stakeholders. Each of these industry participants can encourage and facilitate workshops, webinars, trainings, and other education and outreach activities to enable such learning experiences. New policies and procedures should always be accompanied by education and outreach efforts.

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Installers

1. 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.

2. Regulators, utilities, AHJs, installers, and customers can all benefit from the experiences and lessons learned in other jurisdictions and from communication among stakeholders. Each of these industry participants can encourage and facilitate workshops, webinars, trainings, and other education and outreach activities to enable such learning experiences.

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Conclusions

As utilities continue to see strong growth in distributed solar and as policymakers continue to expand renewable energy goals, interconnection delays will likely remain a problem for the foreseeable future. Delays in connecting PV systems to the grid are costly to consumers and installers, and they hinder state and local efforts to move toward a clean energy economy. Utilities and policymakers can work together to streamline interconnection processing by improving regulations and applications, transitioning to online application systems, and allocating sufficient utility resources. Furthermore, regulators can begin to streamline the interconnection of high levels of PV by allowing installers to access grid capacity maps or data and by initiating comprehensive DG integration proceedings as part of distribution planning processes. Although interconnection delays continue to increase, technological advancements and policy changes are beginning to improve the process for customers, utilities, and installers. Smart policymaking and collaborative improvements to DG integration processes will make interconnection procedures more streamlined and less burdensome to all stakeholders.

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