There's no question the solar industry has reached a crossroads — entering the beginning of a potentially phenomenal growth spurt that will continue for decades. As the cost of installing grid-connected photovoltaic systems (PV) for the home continues to drop, electricity prices soar, and environmental concerns come to the forefront, more customers will inevitably be choosing solar energy alternatives in the next 10 years. Some estimates expect that by the year 2015, 100,000 PV systems will be installed annually. If this projection proves even close to true, the Solar Electric Power Association (SEPA), Washington, D.C., maintains that net metering and interconnection practices (hookups) must be streamlined in order to avoid excessive time and monetary costs for customers, contractors, and utilities.
According to Mike Taylor, director of research at SEPA, solar is growing most rapidly in California and New Jersey, followed by other western and northeastern states. “When I tell people that New Jersey is ranked No. 2 in the country for solar, behind California, I get a lot of funny looks,” he says. “What people forget is it's not just about solar resources [sunlight]. It's also about how high electricity prices have gotten and will continue to get. In states like New Jersey, public policies have encouraged solar through incentives and/or requirements on electric utilities to fund solar initiatives.”
In its new study, “Residential Photovoltaic Metering and Interconnection Study: Utility Perspectives and Practices,” SEPA offers insight into how utilities can help simplify the solar experience for all parties in markets that are starting to take off. Based on a national survey of 63 electric utilities, the study (implemented by SEPA in collaboration with the Interstate Renewable Energy Council) takes a look at the industry's current practices related to grid-connected PV installations and offers recommendations for improvement going forward. While PV continues to serve as a cost-effective solution for remote power needs, SEPA reports that the grid-connected PV market has emerged as the dominant U.S. market, representing more than 70% to 80% of total installations in 2006. Most of these installations are distributed applications located on or near buildings and other structures, offsetting onsite energy consumption through net metering. For savvy electrical contractors who have proven experience and expertise in PV installations, this niche offers significant business opportunities.
“Almost 100% of residential photovoltaic systems are on the customer side of the meter, so they are installed by private industry,” says Taylor. “In most cases, the utility really isn't involved in the decision to install the system, nor do they install it themselves. A lot of solar businesses have an electrical contractor on staff or they work with an outside electrical contracting firm. As the industry continues to grow, there's going to be a need for trained and certified electrical contractors who can do this type of work.”
That's not to say there won't be a learning curve. According to Taylor, there are currently only 20 utilities in the country that have more than 100 PV systems in their service territories. With PG&E in California being the exception to the rule (with more than 10,000 hookups every year), many utilities across the country have 0 installations under their belts. “So, if you're one of the first five contractors working with your utility on a PV installation, you're going to have to go through an education process,” he explains. “In the future, when you think about technology, safety, certification, and permitting issues, the same processes are not going to work when you're processing thousands of requests per year compared to a handful today. That's why in the next five to 10 years it will be so important for electrical contractors installing these systems to have everything in line. That way, the utility can go check, check, check, approved.”
Because the industry is still in transition, learning to promote safety and efficiency without increasing costs is more important now than ever, maintains Taylor. Citing California as a prime example, he believes the trend toward green building will continue to boost solar adoption and implementation in other areas of the country. And when that happens, utilities and installing contractors better be ready. “We're starting to see whole subdivisions in California (Photo) that have solar integrated as part of the building,” he says. “You don't have a choice. You buy this $500,000 home, and it just so happens to have solar incorporated. I suspect that kind of model will trickle out of California in the not-so-distant future.”