You might expect, logically, that as electric utilities gain ample experience with distributed generation (DG) systems, the efficiency of the interconnection process would improve. However, a new report from EQ Research, Comparing Utility Interconnection Timelines for Small-Scale Solar PV, found that the opposite is generally true: utilities are taking longer to grant “permission to operate” (PTO) after a solar photovoltaic (PV) installation is constructed. These delays effectively increase installation costs, while preventing customers from enjoying the benefits of PV systems that are ready to be used. And as PV penetration levels continue to rise around the United States, the problem appears to be worsening, as utilities are more likely to deny interconnection requests due to perceived safety and grid reliability concerns.
The report analyzes data collected from surveyed PV installers operating in utility service territories in the U.S. states with the highest numbers of residential PV systems. The installers were asked to report the average number of days individual utilities took to grant PTO (after a PV system was fully installed) in both 2013 and in 2014, as well as the number of interconnection applications denied by utilities due to grid reliability concerns for each year.
Figure 1: Average PTO waiting periods by utility, 2013 and 2014
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Overall, utilities took much longer to grant PTO in 2014 than in 2013, with the average waiting period rising by 68%. For the utilities operating under state interconnection procedures that prescribe PTO deadlines, the average reported PTO waiting period exceeded the specified limit for 58% of those utilities. Rejections related to grid reliability concerns jumped in 2014, with installers reporting denials in 14 of the 34 utility service territories included in the analysis. Of the 33 utilities surveyed for both years, 25 took more time to process PTO approval in 2014 than in 2013. (Only six utilities reduced their average PTO waiting period in 2014: Eversource, in Connecticut; National Grid, in Massachusetts; PG&E, in California; MECO and HECO, in Hawaii; and Delmarva, in Delaware.) As PV penetration levels rise exponentially, PTO waiting periods likely will worsen unless efforts are made to streamline the interconnection process.
Figure 2: Difference in average PTO waiting periods from 2013 to 2014
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Despite these challenges, several utilities — including some with high PV penetration levels — have successfully improved their interconnection process, therefore serving as useful models for other utilities. For example, SDG&E and PG&E have implemented online, automated application systems that have drastically reduced processing times and errors. Customers and PV installers can check their application status at any time, and installers know ahead of time where high DG penetration levels could translate into interconnection denial. PG&E and SDG&E are able to approve a PV system for operation within four days of receiving all applicable paperwork – considerably less than the state-mandated 30-day deadline. And with less staff time needed for entering data, fixing errors, and answering questions, these utilities have actually saved money by investing in improved processing systems.
In Massachusetts, National Grid has improved its interconnection process by using a dedicated software program to manage and track the progression of individual interconnection projects. It has also streamlined its internal review process so that individual staff are focused on processing a dedicated step of the application process for a portion of the day, rather than having one individual process an application from start to finish. Segmenting the process into an “assembly line” has allowed National Grid to process high volumes of interconnection applications daily (approximately 75) in Massachusetts, even though it has not deployed an online application portal. National Grid’s improved process system has yielded cost savings, while ensuring that it will not be fined for missing state-mandated deadlines.
However a utility chooses to make improvements, the issue is not so much what type of system is employed (i.e., manual or automated), but what level of effort is devoted to improving aspects of the system that is in place. Comparing Utility Interconnection Timelines for Small-Scale Solar PV offers numerous recommendations for utilities, regulators, policymakers and installers to improve the interconnection process. Specifically, the report presents the following recommendations:
- Regulators should set firm deadlines for utilities to grant PTO after all paperwork and inspections are completed, or they should consider shortening those timelines (where they exist) when possible.
- Regulators should incorporate a strategy for accommodating increasing interconnection applications as part of larger transmission and grid optimization planning processes.
- Utilities should make grid penetration maps or data available to installers so that installers are aware in advance of potential problem areas.
- Utilities and regulators should work to streamline interconnection applications and PTO where possible, keeping in mind the potential for cost savings and improved customer satisfaction.
- Installers should systematically track utility response times in order to provide solar stakeholders, utilities, and regulators with clear examples of problems in the interconnection process, ultimately to inform policymaking.
- Policymakers and local jurisdictions should implement policies and procedures to expedite permitting and inspections for PV systems, while utilities and local jurisdictions should coordinate to streamline permitting and interconnection.
- Utilities should consider online, automated application systems to simplify application and approval processes.
- Automatic screening for grid reliability and penetration issues should be built into utilities’ online application systems, and pre-application studies should be made available to customers, especially in high-penetration areas.
- Utilities that do not implement online systems should improve their systems to facilitate better communication among customers, PV installers and utility staff.
- Utilities should work to improve communication and transparency in the interconnection process, prioritizing customer satisfaction.