Local Utility Solar Policies

It is important to check what energy loads the home consumes (or is anticipated to consume if new construction), as utilities may or may not allow an interconnection to the grid if the solar production exceeds the annual electric consumption of the building. To check usage, collect utility bills from the past 12 months to help get a sense of electricity use throughout the year. For new construction, home annual electric use can be estimated by software used to comply with state energy codes.

Utilities may also charge an additional fee for a new home to connect to the grid along with a monthly charge for the connection. This charge could be a flat fee or proportional to the size of the solar system (e.g., $5/kW/month). These fees can significantly impact the cost effectiveness of the solar system to the home owner.

Depending on the utility, the solar electricity generation may be eligible for net metering credits, which compensate the system owner based on the net positive amount of energy delivered to the electric grid.

For instance, a residential solar system may generate a large amount of electricity during the day that is not needed in the house, so that electricity is exported to the grid. At night, when the solar is no longer producing, the home would pull electricity from the grid. How much electricity is used within the home at the end of each billing period is then “netted” out, and the customer may get compensated for any excess energy exported to the grid in the form of credits (dollar value or kWh) on their electric bill.

Those credits can then be applied to the next billing cycle. Some utilities might not compensate the home owner for electric generation greater than their annual electric usage.

Not all utilities have net metering incentives, so it might not apply to certain areas in the country. Some utilities offer no credits, and some charge solar customers additional fees for access to the electric grid or require monthly connection fees. Utility renewable energy policies are highly localized and vary significantly across the country, so it is important to familiarize yourself and your customers with policies in the area so that they can make an informed decision if solar is right for them.