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  • Sarah Lozanova

Interconnection For Commercial Solar Projects



Utility interconnection is a vital aspect of completing a successful project. Therefore, successfully managing this critical step helps keep projects on schedule and budget. Unfortunately, interconnection issues can degrade customer satisfaction, so effective management is essential.


The Importance Of Solar Interconnection

For commercial solar projects to receive compensation for electricity production from distributed generation, they must be connected to the power grid. Without being compensated by the utility company, most commercial solar projects are not financially viable. The interconnection process varies depending on the electric utility, the property and local policies and includes load-side and line-side requirements.


To receive approval to interconnect, the utility company must authorize this connection. In addition, the solar panels and equipment need to meet specific qualifications to ensure the proper voltage, power quality and reliability.


Therefore, interconnection management can be relatively complex, especially for larger projects. However, utility interconnection might not be that much more complicated for small commercial projects than for residential solar installations.


Not correctly identifying all the costs related to interconnection can result in numerous change orders and can increase the total cost of the solar system. This can lead to dissatisfied customers and delays.


The Commercial Interconnection Process

In the United States, state-level public utility commissions (PUCs) create interconnection policies that utility companies and solar installers must follow. In addition, many states have enacted safety requirements based on IEEE 1547 and UL 1741 standards.


This also means the interconnection policies vary by state, with some having more complicated and unclear standards than others. Unfortunately, this increases the soft costs of installing a solar PV project. Also, varying requirements make it more difficult for solar contractors that operate in numerous states because they need to learn the requirements in all states where they complete installations.


In general, the solar system must satisfy grounding, power quality, and voltage requirements to navigate the process successfully. In addition, some commercial solar projects will require an impact study. The utility interconnection process consists of two main steps that need to be complete in the correct order.


Interconnection Application Process

Like residential projects, commercial projects require filling out an interconnection application. The applications contain basic information, such as the system size, solar PV equipment, location and solar electricity production estimates. For large commercial projects, this application can be relatively complicated. In particular, solar with battery storage can be incredibly complex because of the impacts of the battery on the electric grid.


During the application process, contractors and project developers need to show that the renewable energy system meets various requirements. The application must also explain the point of interconnection. If changes or modifications are made to the solar project, the solar contractor or developer must update the application.


Permission To Operate

Before a system can be turned on, it must receive permission to operate. To receive permission to operate (PTO) and an approved interconnection agreement, the system must be installed, inspected, and approved by the utility provider. Now, the solar system has the authorization to operate and connect to the utility grid because it fulfilled all the interconnection requirements.


How Long Can Commercial Interconnection Take?

The length of the process depends a lot on the utility company, if there are complications, and how quickly the solar contractor or developer responds to requests from the utility company. Also, solar systems with energy storage can take longer to receive approval. This is because the solar installation is both a load and a generator, depending on how the project is operating. Some jurisdictions have simplified interconnection approval processes, especially for residential and small commercial solar systems. Other jurisdictions have not.


According to a 2015 study by the National Renewable Energy Laboratory, the average small commercial project (10 – 50 kilowatts) took an average of 62 days from when the contractor applied for interconnection to when they received permission to operate. Keep in mind that timeframes vary a lot by the jurisdiction and scale of the photovoltaic solar project. Large commercial projects can take significantly longer.


The Difference Between Residential And Commercial Interconnection

Most residential and small commercial PV projects can connect to the power grid without equipment modifications beyond the meter. However, because of the scale and voltage of larger projects, this often isn’t the case, and interconnection is typically more complex.


Point Of Interconnection

It is typically not cost-effective to connect a small solar project to a high-voltage transmission line because the cost of interconnection typically increases by the voltage of the power line.


Larger commercial projects, such as a community solar farm, usually need to be connected to a three-phase distribution line. Utility-scale projects either connect directly to a substation or a transmission line of 69 kV or higher.


Unless a solar farm is installed next to transmission lines or substations, the solar contractor needs to install a generation tie to connect the clean energy project to the grid. These are expensive to construct and can have a significant impact on the project’s return on investment. Therefore, close proximity to transmission lines or a substation is preferable.


Unfortunately, just because a high-voltage line is located near a proposed solar farm doesn’t mean that it has the capacity to handle the additional power from the solar project. Sometimes, electrical equipment needs to be upgraded to increase its capacity, which can be costly.


Interconnection Voltage

It is also essential to consider interconnection voltage. Commercial customers typically receive 208V from the utility. However, most inverters over 20 kilowatts output 480 volts. Therefore, unlike residential PV systems, many commercial properties require a transformer to step down the voltage.


A combiner panel is needed to combine the outputs if a solar system is large enough to have multiple inverters. This is often installed on the roof or sometimes in a mechanical room or basement.


Utility Compensation

Under net metering laws, many residential and some commercial solar customers are compensated for solar electricity at the retail rate. However, laws vary by state, and some states don’t have a net energy metering program. For commercial power customers, policies also vary by the type of commercial account. For example, some commercial customers can offset demand charges on their power bills with solar power while others cannot.


Getting Connected

Over time, the interconnection process gets easier with experience, especially if the technical requirements remain consistent or are streamlined.


Bringing expert knowledge to the interconnection process is critical. Unfortunately, many solar companies lack this knowledge in-house, or they simply don’t have the time to properly manage the interconnection process and site solar equipment optimally.


GreenLancer partners can help mitigate costs and ensure project success through their professional solar development services. To learn more, sign up for free and shop our interconnection services.