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Understanding How Each State’s Interconnection Standards for Distributed Generation Installations Differ

Feb 1, 2009 12:00 PM, By Beck Ireland, Staff Writer

Forecasting is also an important issue for all renewable energy resources, particularly those that are not storable. “Today, there is no proven, reliable, and cost-effective way to store the energy out of a wind project other than traditional storage means, like pumped hydro,” says McComish.

Therefore, wind farms may require network augmentation and possibly additional interconnectors to avoid flow constraints. “The places for the development of wind are not near where the population centers are that are using the energy,” Connors says. “So then it relies on grid development and interconnection.”

With estimates for a refurbished, renewable energy-friendly transmission grid at $100 billion, any technology that could accommodate that power is welcome.

Sidebar: Interconnection Vs. Net Metering

Although interconnection and net metering policies are often discussed together, they are separate issues. “Interconnection” refers to the technical and practical aspects of connecting a generator to the grid, whereas “net metering” is the provision of a state's law that allows customers to receive credit for the energy they produce when they are connected to the grid. Net metering is a market-based incentive — typically created as a commission rule, a state law, or a combination of the two — that establishes the process for crediting owners of customer-sited, grid-tied distributed generation (DG) for excess electricity fed into the grid to encourage small-scale, renewable energy generation. Where net metering exists in the United States, photovoltaic (PV)-generated electricity can be used on-site or delivered to the grid.

Under the Energy Policy Act of 2005 (EPAct 05), states were encouraged to adopt a net metering standard by August 8, 2008. As of September 2008, 40 states have statewide net metering programs.

Net metering laws establish how a set of electric utilities must treat the power produced by a grid-connected system. Under a net metering agreement, electricity that is fed back into the grid is credited based on a percentage of the utility tariff. Thus, customers who produce some or all of their power on-site from solar energy only pay for their net energy consumption during a set period.

“Some states true it up on a monthly basis, other states true it up on an annual basis,” says Mike Taylor, director of research and education, Solar Electric Power Association (SEPA), Washington, D.C., who explains that the annual basis time frame is more accommodating to the solar system. “Honestly, in most cases, solar systems are not sized to be anywhere close to annual consumption. It's more common to be something between 20% and 50% of annual consumption. So even on a monthly basis it doesn't happen that much, but just in case there's that delineation.”

System eligibility and procedures for handling net excess generation across billing periods vary by state and electric utility net metering policies.

“In some states you lose it, in others you get wholesale cost, and in a few states you actually get retail or a rate higher than wholesale cost,” Taylor says. “There are essentially 50 different states and 50 different solar markets. It has nothing to do with how much you pay for electricity or how much sun you have. It's essentially the business environment and the incentives that are available.”

Sidebar: Kill Switch

A 2008 report, “Utility-Interconnected Photovoltaic Systems: Evaluating the Rationale for the Utility-Accessible External Device Switch,” by the U.S. Department of Energy's (DOE) National Renewable Energy Laboratory (NREL), Washington, D.C., concluded that a redundant external disconnect switch only adds an economic burden on the customer and an administrative burden on the electric utility. The report goes on to say that UL-listed inverters for small interconnected generators already provide the desired safety functions. You may download the full report from the NREL Web site at http://www.nrel.gov/docs/fy08osti/42675.pdf.

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