Connecting your photovoltaic system to the utility grid will require an interconnection agreement and a purchase and sale agreement. Federal law and some state public utility commission regulations require utilities to supply you with an interconnection agreement. Some utilities have developed simplified, standardized interconnection agreements for small-scale photovoltaic systems.
The interconnection agreement specifies the terms and conditions under which your system will be connected to the utility grid. These include your obligation to obtain permits and insurance, maintain the system in good working order, and operate it safely. The purchase and sale agreement specifies the metering arrangements, the payment for any excess generation, and any other related issues.
The language in these contracts should be simple, straightforward, and easy to understand. If you are unclear about your obligations under these agreements, contact the utility or your electrical service provider for clarification. If your questions are not answered adequately, contact one of the groups in the Getting Help section.
National standards for utility interconnection of photovoltaic systems are being adopted by many local utilities. The most important of these standards focuses on inverters. Traditionally, inverters simply converted the DC electricity generated by photovoltaic modules to the AC electricity we use in our homes. More recently, inverters have evolved into remarkably sophisticated devices to manage and condition power. Many new inverters contain all the protective relays, disconnects, and other components necessary to meet the most stringent national standards. Two of these standards are particularly relevant:
You don’t need to fully understand these standards, but your photovoltaic provider and utility should. It is your obligation to make sure that your photovoltaic provider uses equipment that complies with the relevant standards, however, so be sure to discuss this issue.
How do you get a net metering agreement? Get Your Power from the Sun
Some utilities offer customers with photovoltaic systems the option to net meter the excess power generated by the photovoltaic system. As noted, this means that when the photovoltaic system generates more power than the household can use, the utility pays the full retail price for this power in an even swap as the electric meter spins backward, and your photovoltaic power goes into the grid.
Net metering allows eligible customers with photovoltaic systems to connect to the grid with their existing single meter. Almost all standard utility meters can measure the flow of energy in either direction. The meter spins forward when electricity is flowing from the utility into the building and spins backward when power is flowing from the building to the utility.
For example, in one utility program, customers are billed monthly for the “net” energy consumed. If the customer’s net consumption is negative in any month (i.e., the photovoltaic system produces more energy than the customer uses), the balance is credited to subsequent months. Once a year, on the anniversary of the effective date of the interconnection agreement, the utility pays the customer for any negative balance at its wholesale or “avoided cost” for energy, which may be quite small, perhaps less than 2 cents per kilowatt-hour.
Net metering allows customers to get more value from the energy they generate. It also simplifies both the metering process (by eliminating the need for a second meter) and the accounting process (by eliminating the need for monthly payments from your utility). Be sure to ask your utility about its policy regarding net metering.
Under the federal Public Utility Regulatory Policies Act (PURPA), utilities must allow you to interconnect your photovoltaic system. They must also buy any excess electricity you generate, beyond what you use in your home or business. If your utility does not offer net metering, it will probably require you to use two meters: one to measure the flow of electricity into the building, the other to measure the flow of electricity out of the building. If net metering is not available, the utility will pay you only a wholesale rate for your excess electricity. This provides a strong incentive to use all the electricity you generate so that it offsets electricity you would otherwise have to purchase at the higher retail rate. This may be a factor in how you optimize the system size, because you may want to limit generating excess electricity. Such a “dual metering” arrangement is the norm for industrial customers who generate their own power.