Interconnection Standards

Description

Interconnection standards specify the technical, legal and procedural requirements that customers and utilities must abide by when a customer seeks to connect a renewable-energy system to the grid. In states without comprehensive interconnection standards in place, it is often more difficult, more burdensome and more expensive for customers to connect a system to the grid. In general, states may regulate the interconnection of electricity-generating systems to distribution systems, while the Federal Energy Regulatory Commission (FERC) regulates the interconnection of systems to transmission lines.

Some states have adopted comprehensive interconnection standards that apply to all types and sizes of customer-sited systems, regardless of whether the system is net-metered. Some states have adopted interconnection standards that apply only to smaller systems that are net-metered. Some states have adopted interconnection guidelines that are vague and do not constitute standards. Other states have not adopted interconnection standards or guidelines. Comprehensive interconnection standards are developed by state public utility commissions, often when commissions directed to do so by state legislatures.

The technical issues related to interconnection are addressed by the IEEE 1547 Standard for Interconnecting Distributed Resources with Electric Power Systems. All states with comprehensive interconnection standards require compliance with the IEEE 1547 technical standard. However, the policy issues related to interconnection are more complex and vary by state. While some states’ interconnection standards apply to customers of all types of utilities (e.g., investor-owned utilities, municipal utilities and electric cooperatives), others apply only to customers of investor-owned utilities. In addition, state interconnection standards vary widely by several other key criteria, including individual system capacity limit, interconnection fees, use of a standard form agreement, insurance requirements, use of an external disconnect switch, and provisions for interconnection to area networks (i.e., complex grids that serve highly urban areas). The "Freeing the Grid" project provides a detailed breakdown of the individual components of each state's policy and an overall letter grade describing the overall quality of each, based on current best practices.

Status & Trends

States have become fully aware that comprehensive interconnection standards are a critical component of the development of in-state renewables markets. More than 30 states plus D.C. and Puerto Rico have adopted comprehensive interconnection standards that apply to customer-sited systems (both large and small), regardless of whether the system is net-metered. Around 10 other states, including Arkansas and Georgia, have adopted standards or guidelines that only apply to smaller, net-metered systems.

Most states with comprehensive standards have established multiple levels of review based on system capacity, complexity and level of certification. In these states, applications for small, certified systems

are processed quickly, while larger systems and uncertified systems require closer review. By establishing multiple levels of review, states ensure that the owner of a five-kilowatt photovoltaic (PV) system may interconnect quickly, safely and inexpensively, without having to endure a process more suitable to a 10-megawatt combined heat and power (CHP) system. Some states have moved toward developing separate interconnection requirements for net-metered systems and non-net metered systems. Notably, some states have determined that larger systems that do not export electricity should require a less rigorous review process than larger systems that do export electricity.

With respect to smaller PV systems and certain other systems, public utilities commissions in several states, such as Maine, Oregon and North Carolina, have concluded that an external disconnect switch is not necessary and have prohibited utilities from requiring customers to install such a switch. (Several larger electric utilities, including PG&E and SMUD, have voluntarily reached the same conclusion and abandoned previous requirements for an external disconnect switch for smaller PV systems.) Similarly, public utilities commissions generally do not require customers to purchase liability insurance beyond the amount included in a typical homeowner’s policy or business owner’s policy.

The Interstate Renewable Energy Council, Inc. (IREC) has established the following best practices for state interconnection standards:

All utilities (including municipal utilities and electric cooperatives) should be subject to the state policy.
All customer classes should be eligible.
There should be three or four separate levels of review to accommodate systems based on system capacity, complexity and level of certification.
There should be no individual system capacity limit. The state standard should apply to all state-jurisdictional interconnections.
Application costs should be kept to a minimum, especially for smaller systems.
Reasonable, punctual procedural timelines should be adopted and enforced.
A standard form agreement that is easy to understand and free of burdensome terms should be used.
Clear, transparent technical screens should be established.
Utilities should not be permitted to require an external disconnect switch for smaller, inverter-based systems.
Utilities should not be permitted to require customers to purchase liability insurance (in addition to the coverage provided by a typical insurance policy), and utilities should not be permitted to require customers to add the utility as an additional insured.
Interconnection to area networks should generally be permitted, with reasonable limitations where appropriate.

There should be a process for dispute resolution.

Examples

Virginia's interconnection standards, originally established in 1999 and subsequently amended, with the most recent amendments being adopted by Virginia's State Corporation Commission (SCC) in May 2009, are currently among the best in the United States. [1] Virginia has adopted two separate sets of interconnection standards -- one for net-metered systems, and one for systems that are not net-metered. The interconnection standards for net-metered systems apply to residential systems up to 10 kW and commercial systems up to 500 kW. Virginia's standards for systems that are not net-metered are based on the FERC's Small Generator Interconnection Procedures and include three tiers of review for systems up to 20 MW. Fees, review procedures, and insurance requirements vary by system size and tier. The dispute resolution process allows complaints to be handled by the SCC.

Maine’s interconnection standards, adopted by the Maine Public Utilities Commission in January 2010, are considered to be some of the best in the United States.[1] Maine’s standards provide for four levels of review for systems of all sizes, based on system capacity, complexity and certification. The first level of review allows expedited interconnection for certified, inverter-based systems (including PV systems) up to 10 kW. A standard agreement is used, and an external disconnect switch is not required. Utilities may not require customers to purchase additional liability insurance for most systems. Notably, Maine's standards are based on IREC's model interconnection standards.
Utah's interconnection standards, adopted by the Utah Public Service Commission in April 2010, are also widely regarded to be among the best in the country.[1] Utah's standards provide for three levels of review for customer-sited systems up to 20 MW, based on system capacity, complexity and certification. The first level of review allows expedited interconnection for certified, inverter-based systems up to 10 kW. A standard agreement is used for each of the three levels. An external disconnect switch is not required for systems up to 10 kW.

Resources

DSIRE: Summary of Interconnection Standards in the U.S. DSIRE, 2012.

Freeing the Grid. Vote Solar, et al., 2013.

Updating Small Generator Interconnection Procedures. Keyes, Fox & Wiedman LLP, 2012.

Model Interconnection Standards. Interstate Renewable Energy Council, Inc. (IREC), 2009.

Connecting to the Grid: A Guide to Distributed Generation Interconnection Issues. Laurel Varnado and Mike Sheehan. Interstate Renewable Energy Council, Inc. (IREC), 6th Edition, October 2009.

Utility-Interconnected Photovoltaic Systems: Evaluating the Rationale for the Utility-Accessible External Disconnect Switch. National Renewable Energy Laboratory (NREL), January 2008.

IEEE 1547 Standard for Interconnecting Distributed Resources with Electric Power Systems. IEEE, 2004.

Footnotes

[1] Freeing the Grid 2011, Network for New Energy Choices, et al., October 2011.

Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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