FERC Regulatory Change Could Boost Distributed Solar In The US

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Connecting distributed generation solar projects to the electrical grid may have just gotten much faster and cheaper, potentially boosting both the US solar industry and overall grid reliability. 

Distributed solar generation
Distributed solar installation image via Shutterstock

The Federal Energy Regulatory Commission (FERC) yesterday published a set of regulatory reforms intended to streamline the grid interconnection process for mid-sized solar projects that meet certain technical standards. If approved, the reforms could double the amount of solar qualifying for “fast track” interconnection in the US. 

FERC’s regulatory reform would update Order Number 2006, issued in 2005. The order established the first set of interconnection procedures for wholesale electricity generation projects under 20 megawatts (MW) in size. The procedures were adopted by many states, but with the solar market’s rapid growth, many aspects of Order 2006 have created red tape to bringing new projects online. 

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Why Do Grid Interconnections Matter?

You might be wondering just what an interconnection is, and why it’s so important to solar, so here’s a quick primer. Interconnection standards are the requirements any electricity generator — either customer or utility — must meet in order for the grid operator to approve their connection to plug into transmission lines and sell power onto the system. 

Plug-in solar panels
Plug-in solar panels image via Shutterstock

The federal government has jurisdiction over the interconnection process for distributed solar projects where electricity is being sold to a utility on the wholesale market, and the growing volume of proposed solar installations has created a logjam in many areas, threatening many projects.   

What’s At Stake?

To get a sense of what’s at stake for this growing market, consider that PJM Interconnection (America’s largest grid operator) recently stated two-thirds of active projects are under 20MW, and California (America’s largest solar market) has a regulatory mechanism in place to procure 1,000 MW of distributed renewable generation from projects under 20MW. 

FERC’s proposed reforms would streamline the interconnection process in four ways;

  • Allow projects requesting interconnections to be given a pre-application report from transmission operators evaluating the proposed installation before a formal request is made.
  • Increase the threshold for participation in the “fast track” process from 2MW to 5MW, and base eligibility on individual systems and resources.
  • Revise the supplemental review process for projects that fail to meet fast track requirements.
  • Provide interconnection requestors the ability to submit written comments on transmission upgrades necessary for their interconnection.

Massive Potential For America’s Solar Market

Wholesale distributed solar generation projects are an important element to meeting America’s solar potential, because they fall between small rooftop projects and large utility-scale projects. Distributed solar generation can also be located close to demand, have smaller environmental impacts, and can be quickly constructed. 

“We applaud FERC for recognizing the challenges facing wholesale distributed generation development, which is one of the fastest-growing segments of the solar energy industry,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA). “This important proposed rule has the potential to roughly double the amount of solar generation capacity eligible to be fast-tracked in the US.” 

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