A Consumer’s Guide Get Your Power from theSun Bringing you a prosperous future where energy is clean, abundant, reliable, and affordable Contents Background What is a solar electric or photovoltaic system? . . . . . . . . . . . . . . . .2 Are incentives available to help reduce the cost? . . . . . . . . . . . . . . . .3 Investing in a PV system Why should you buy a PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Is your home or business a good place for a PV system? . . . . . . . . . .5 How big should your PV system be, and what features should it have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 How much will you save with your PV system? . . . . . . . . . . . . . . . . .8 How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . .8 How can you finance the cost of your PV system? . . . . . . . . . . . . . .9 Selecting a PV provider Who sells and installs PV systems? . . . . . . . . . . . . . . . . . . . . . . . . . .11 How do you choose among PV providers? . . . . . . . . . . . . . . . . . . . .11 How do you choose among competing bids? . . . . . . . . . . . . . . . . . .12 Is the lowest price the “best deal”? . . . . . . . . . . . . . . . . . . . . . . . . . .13 Before connecting a PV system to the grid What should you know about permits? . . . . . . . . . . . . . . . . . . . . . .14 What should you know about insurance? . . . . . . . . . . . . . . . . . . . .14 How do you get an interconnection agreement? . . . . . . . . . . . . . . .14 How do you get a net-metering agreement? . . . . . . . . . . . . . . . . . . .15 What should you know about utility and inspection sign-off? . . . .16 What should you know about warranties? . . . . . . . . . . . . . . . . . . . .16 Getting help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Cover photo: This PV system, integrated into an awning over the back porch of a home in California, generates electricity while shading the family's outdoor activities. (Courtesy of AstroPower/PIX12345) Photo opposite: These PV modules are light and flexible, which makes them suitable for roofing shingles. This Consumer’s Guide is based on a state-specific guide written by Tom Starrs and Howard Wenger for the California Energy Commission, which was supported, in part, by the National Renewable Energy Laboratory in Golden, Colorado. ii Get Your Power from theSun Are you thinking about buying a solar electric system for your home or busi- ness? If so, this booklet provides some basic information that can help you. Solar electric systems, which are also called photovoltaic or PV systems, are reliable and pollution-free. They make use of a renewable source of ener- gy—the sun. And PV systems for homes and businesses are becoming more affordable all the time. PV works best in an energy-efficient building. So, adding insulation and ener- gy-efficient lighting, appliances, and windows is a good idea, to reduce your home’s overall electricity use before you install a PV system. To make PV systems even more affordable, several states offer financial incen- tives through solar rebates and other programs. Some utilities have net meter- ing programs, which further enhance the economics of PV. Net metering means that when your PV system generates more power than you need, the excess goes to the utility grid and the meter runs backward. This allows you to receive full retail value for the power that your PV system generates. This booklet can guide you through the process of buying a solar electric sys- tem. It is not a technical guide to designing or installing a system—for that information, we recommend consulting an experienced PV system designer or supplier. A PV system can be a substantial investment. As with any investment, careful planning will help you make the right decisions for your home or business. Warren Gretz, NREL/PIX06283 1 Background What is a solar electric or technology the U.S. energy source photovoltaic system? of choice for the 21st century. Photovoltaic (PV) systems convert The basic building block of PV tech- sunlight directly to electricity. They nology is the solar “cell.” Multiple work any time the sun is shining, PV cells are connected to form a PV but more electricity is produced “module,” the smallest PV compo- when the sunlight is more intense nent sold commercially. Modules and strikes the PV modules directly range in power output from about (as when rays of sunlight are perpen- 10 watts to 300 watts. A PV system dicular to the PV modules). Unlike connected or “tied” to the utility solar thermal systems for heating grid has these components: water, PV does not use the sun's heat to make electricity. Instead, • One or more PV modules, which electrons freed by the interaction are connected to an inverter of sunlight with semiconductor • The inverter, which converts the materials in PV cells are captured system's direct-current (DC) elec- in an electric current. tricity to alternating current (AC) PV allows you to produce electricity— • Batteries (optional) to provide without noise or air pollution—from energy storage or backup power a clean, renewable resource. A PV in case of a power interruption system never runs out of fuel, and it or outage on the grid. won't increase U.S. oil imports. Many PV system components are manufac- AC electricity is compatible with tured right here in the United States. the utility grid. It powers our lights, These characteristics could make PV appliances, computers, and televisions. Solar Panels Inverter Utility Service Meter Home Power/ Appliances 03529701 Residential grid-connected PV system 2 Special appliances that run directly Are incentives available to on DC power are available, but they help reduce the cost? can be expensive. Yes, many states offer incentives. Before you decide to buy a PV system, For specific information, call one of there are some things to consider: the contacts listed under “Getting Help” at the end of this booklet. First, PV produces power intermit- Another excellent source is the tently because it works only when National Database of State Incent- the sun is shining. This is not a prob- ives for Renewable Energy (DSIRE). lem for PV systems connected to the Prepared by the North Carolina Solar utility grid, because any additional Center, this database contains infor- electricity required is automatically mation on financial and regulatory delivered to you by your utility. In incentives that promote renewable the case of non-grid, or stand-alone, energy technologies. PV systems, batteries can be pur- chased to store energy for later use. Net Metering—In more than 35 states, customers who own PV sys- Second, if you live near existing tems can benefit from laws and power lines, PV-generated electricity regulations that require “net” electric is usually more expensive than con- meter reading. The customer is billed ventional utility-supplied electricity. for the net electricity purchased from Although PV now costs less than the utility over the entire billing 1% of what it did in the 1970s, the period—that is, the difference amortized price over the life of the between the electricity coming from system is still about 25 cents per the power grid and the electricity kilowatt-hour. This is double to generated by the PV system. Through quadruple what most people pay for net metering, the customer obtains electricity from their utilities. A solar the full retail electricity rate—rather rebate program and net metering can than the much lower wholesale help make PV more affordable, but rate—for kilowatt-hours of PV-pro- they can't match today's price for duced electricity sent to the utility utility electricity in most cases. power grid. The benefits of net Finally, unlike the electricity you metering to consumers are especially purchase monthly from a utility, PV significant in areas such as Hawaii power requires a high initial invest- and New York, which have high ment. This means that buying a PV retail electric rates. Utilities also system is like paying years of electric benefit because the solar-generated bills up front. Your monthly electric energy often coincides with their bills will go down, but the initial periods of “peak” demand for expense of PV may be significant. electricity. By financing your PV system, you Property and Sales Tax—Tax can spread the cost over many years, incentives may include a sales tax and rebates can also lighten your exemption on the PV system pur- financial load. chase, a property tax exemption, or state personal income-tax credits, 3 AstroPower/PIX12346 PV awnings such as this one in California provide both electricity and shade. all of which provide an economic growth. In the United States, the benefit to consumers by lowering U.S. Department of Energy has been high capital costs. The U.S. govern- involved in a program known as ment also provides financial support TEAM-UP, or Technology Experience for PV technology through a tax to Accelerate Markets in Utility credit for commercial uses of solar Photovoltaics. Through this program, energy. This energy investment credit some 80 utilities in 40 states have provides businesses (but not individ- installed more than 7 megawatts uals or utilities) with a 10% tax credit of grid-connected PV; supplier buy- and 5-year accelerated depreciation downs and consumer rebates range for the cost of equipment used to between $2 and $4 per watt. generate solar electricity. Residential Energy Rate—This Buy-Down—Rebates and buy- is the average retail residential rate downs, typically based on the rated for energy from utilities, in cents power of the system, help to defray per kilowatt-hour. Check your utility high capital costs and to create bill for your actual rate. competitive, sustainable market 4 Investing in a PV system Why should you buy a PV location looks promising, your PV system? provider can determine whether your home or business can effectively use People decide to buy PV systems for a PV system. a variety of reasons. Some people want to help preserve the Earth's The orientation of your PV system finite fossil-fuel resources and reduce (the compass direction that your sys- air pollution. Others want to invest tem faces) affects its performance. In in an energy-producing improve- the United States, the sun is always ment to their property. Some people in the southern half of the sky but is like the security of reducing the higher in the summer and lower in amount of electricity they buy from the winter. Usually, the best location their utility because it makes them for a PV system is a south-facing less vulnerable to future price roof, but roofs that face east or west increases. And some people just may also be acceptable. Flat roofs appreciate the independence that also work well for solar electric sys- a PV system provides. tems, because PV modules can be mounted flat on the roof facing the If you plan to build a home away sky or bolted on frames tilted toward from an established utility service, the south at an optimal angle. They inquire about the cost of installing can also be attached directly to the a utility line. Often, the cost of roof as “PV shingles.” extending conventional power to your residence is higher than the If a rooftop can't be used, your solar cost of a solar option. modules can also be placed on the ground, either on a fixed mount or Whatever your reason, solar energy a “tracking” mount that follows the is widely thought to be the energy sun to orient the PV modules. Other source of choice for the future, and options (often used in multifamily you may be able to take advantage or commercial applications) include of a state-sponsored program to help mounting structures that create cov- make it your energy choice for today ered parking, or that provide shade and tomorrow. as window awnings. Is your home or business a Is your site free from shading by good place for a PV system? trees, nearby buildings, or other Can you locate your system obstructions? so it works well? To make the best use of your PV sys- A well-designed PV system needs tem, the PV modules must have a clear and unobstructed access to the clear “view” of the sun for most or sun's rays for most or all of the day, all of the day—unobstructed by trees, throughout the year. You can make roof gables, chimneys, buildings, and an initial assessment yourself. If the other features of your home and the 5 surrounding landscape. Some poten- cost more. System sizing, discussed tial sites for your PV system may later in this booklet, should also be be bright and sunny during certain discussed with your PV provider. times of the day, but shaded during other times. Such shading may sub- What kind of roof do you have, stantially reduce the amount of elec- and what is its condition? tricity that your system will produce. Some types of roofs are simpler and To be eligible for some rebates, your cheaper to work with, but a PV sys- system must be unshaded between tem can be installed on any type. certain hours during certain times of Typically, roofs with composition the year. Some states have laws that shingles are the easiest to work with, establish your right to protect your and those with slate are the most solar access through the creation of difficult. In any case, an experienced a “solar easement.” Your PV provider solar installer will know how to can help you determine whether work on all types and can use roof- your site is suitable for a solar ing techniques that eliminate any electric system. possibility of leaks. Ask your PV provider how the PV system affects Does your roof or property your roof warranty. contain a large enough area for the PV system? If your roof is older and needs to be The amount of space that a PV replaced in the near future, you may system needs depends on the size want to replace it at the time the PV of the system you purchase. Some system is installed to avoid the cost residential systems require as little of removing and reinstalling your as 50 square feet (for a small “starter” PV system. PV panels often can be system), but others could need as integrated into the roof itself, and much as 1,000 square feet. some modules are actually designed Commercial systems are typically as three-tab shingles or raised-seam even larger. If your location limits metal roof sections. One benefit of the size of your system, you may these systems is their ability to offset want to install one that uses more the cost of roof materials. efficient PV modules. Greater effi- ciency means that the module needs How big should your PV less surface area to convert sunlight system be, and what features into a given amount of electric should it have? power. PV modules are available To begin, consider what portion of in a range of types, and some offer your current electricity needs you more efficiency per square foot would like your PV system to meet. than others do (see table on the For example, suppose that you would next page). Although the efficiency like to meet 50% of your electricity (percent of sunlight converted to needs with your PV system. You electricity) varies with the different could work with your PV provider types of PV modules available today, to examine past electric bills and higher efficiency modules typically 6 determine the size of the PV system produced by your system on an needed to achieve that goal. annual basis (see the section on net metering). Finally, customers eligible You can contact your utility and for net metering vary from utility to request the total electricity usage, utility; for example, net metering measured in kilowatt-hours, for your could be allowed for residential cus- household or business over the past tomers only, commercial customers 12 months (or consult your electric only, or both. bills if you save them). Ask your PV provider how much your new PV One optional feature to consider is system will produce per year (also a battery system to provide energy measured in kilowatt-hours) and storage (for stand-alone systems) or compare that number to your annual backup power in case of a utility electricity usage (called demand) to power outage (for grid-connected get an idea of how much you will systems). Batteries add value to your save. In the next section, we'll pro- system, but at an increased price. vide more information on estimating how much you will save. As a rule, the cost per kilowatt-hour goes down as you increase the size Some solar rebate programs are of the system. For example, many capped at a certain dollar amount. inverters are sized for systems up to Therefore, a solar electric system 5 kilowatts, so even if your PV array that matches this cap maximizes is smaller (say, 3 kilowatts), you may the benefit of the solar rebate. have to buy the same size of inverter. Labor costs for a small system may To qualify for net metering in some be nearly as much as those for a large service territories, your PV system system, so you are likely to get a bet- must have a peak generating capacity ter price for installing a 2-kilowatt that is typically not more 10 kilo- system all at once, rather than watts (10,000 watts), although this installing 1 kilowatt each year for peak may differ from state to state. two years. Also, utilities have different provi- sions for buying excess electricity Roof Area Needed in Square Feet (shown in Bold Type) PV Module Efficiency (%) PV Capacity Rating (Watts) 100 250 500 1,000 2,000 4,000 10,000 4 30 75 150 300 600 1,200 3,000 8 15 38 75 150 300 600 1,500 12 10 25 50 100 200 400 1,000 16 8 20 40 80 160 320 800 For example, to generate 2,000 watts from a 12%-efficient system, you need 200 square feet of roof area. 7 How much will you save electricity will not be worth as much with your PV system? as the electricity you actually use. You may earn only 2 cents per The value of your PV system's elec- kilowatt-hour—or less than half the tricity depends on how much you retail rate—for your excess power. pay for electricity now and how much your utility will pay you for PV systems produce most of their any excess power that you generate. electricity during the middle of the If your utility offers net metering day, when residential electric loads (and so pays the full retail price for tend to be small. If your utility does your excess electricity), you and your not offer net metering, you may utility will pay the same price for want to size your system to avoid each other's electricity. You can use generating electricity significantly the calculation box on the next page beyond your actual needs. to roughly estimate how much elec- tricity your PV system will produce How much does a PV and how much that electricity will system cost? be worth. Actual energy production No single answer applies in every from your PV system will vary by up case. But a solar rebate and other to 20% from these figures, depending incentives can always reduce the on your geographic location, the cost. Your price depends on a num- angle and orientation of your system, ber of factors, including whether the quality of the components, and your home is under construction and the quality of the installation. whether PV is integrated into the Also, you may not get full retail roof or mounted on top of an exist- value for excess electricity produced ing roof. The price also depends on by your system on an annual basis, the PV system rating, manufacturer, even if your utility does offer net retailer, and installer. metering. Be sure to discuss these The size of your system may be the issues with your PV provider. Request most significant factor in any meas- a written estimate of the average urement of costs versus benefits. annual energy production from the Small, single-PV-panel systems with PV system. However, even if an esti- built-in inverters that produce about mate is accurate for an average year, 75 watts may cost around $900 actual electricity production will installed, or $12 per watt. These fluctuate from year to year because small systems offset only a small of natural variations in weather fraction of your electricity bill. A and climate. 2-kilowatt system that meets nearly If your utility does not offer net all the needs of a very energy- metering, you can still use the calcu- efficient home could cost $16,000 lation box to determine the amount to $20,000 installed, or $8 to $10 per of electricity your system will watt. At the high end, a 5-kilowatt produce. However, this is not as system that completely meets the straightforward, because the excess energy needs of many conventional 8 Calculating Electricity Bill Savings for a Net-Metered PV System • Determine the system's size in kilowatts (kW). A reasonable range is from 1 to 5 kW. This value is the “kW of PV” input for the equations below. • Based on your geographic location, select the energy production factor from the map below for the “kWh/kW-year” input for the equations. Energy from the PV system = (kW of PV) x (kWh/kW-year) = kWh/year Divide this number by 12 if you want to determine your monthly energy reduction. Energy bills savings = (kWh/year) x (Residential Rate)/ 100 = $/year saved (Residential Rate in this above equation should be in dollars per kWh; for example, a rate of 10 cents per kWh is input as $0.10/kWh.) For example, a 2-kW system in Denver, CO, at a residential energy rate of $0.07/kWh will save about $266 per year: 1,900 kWh/kW-year x $0.07/kWh x 2 kW = $266/year. Note: The uncertainty of the contoured values is generally ±10%. In mountainous and other areas of complex terrain, the uncertainty may be higher. homes can cost $30,000 to $40,000 How can you finance the cost installed, or $6 to $8 per watt. These of your PV system? prices are rough estimates; your When it comes to financing the cost costs depend on your system's con- of purchasing and installing your figuration, your equipment options, PV system, there are some special and other factors. Your local PV programs particular to financing providers can give you more accurate solar and other renewable energy estimates or bids. 9 Schott Applied Power Corp./PIX08808 This 20-kilowatt PV system produces electricity for the common areas of a shopping center in Cambridge, Massachusetts. investments. But most of the relatively simple. It is also one way options will be familiar to you. to avoid additional loan application forms and fees. The best way to finance PV systems for homes is through a mortgage If mortgage financing is not avail- loan. Mortgage financing options able, look for other sources of fin- include your primary mortgage; a ancing, such as conventional bank second mortgage, such as a U.S. loans. Seek the best possible combi- Department of Housing and Urban nation of low rate and long term. Development (HUD) Title 1 loan; or This allows you to amortize your PV a home-equity loan that is secured system as inexpensively as possible. by your property. There are two Because your PV system is a long- advantages to mortgage financing. term investment, the terms and First, mortgage financing usually pro- conditions of your financing are vides longer terms and lower interest likely to be the most important rates than other loans, such as con- factor in determining the effective ventional bank loans. Second, the price of your PV-generated power. interest paid on a mortgage loan is generally deductible on your federal PV systems for businesses are proba- taxes (subject to certain conditions). bly best financed through a compa- If you buy the PV system for your ny's existing sources of funds for home at the same time that you capital purchases—such as Small build, buy, or refinance the home, Business Administration loans or adding the cost of the PV system to conventional bank loans. your mortgage loan is likely to be 10 Selecting a PV provider Who sells and installs PV should have the lowest travel costs). systems? Contact these providers and find out what products and services they offer. In some areas, finding a PV provider The following questions may give you can be as simple as picking up the a good sense of their capabilities: telephone directory and looking under “Solar Energy Equipment and Has the company installed grid- Systems—Dealers.” However, many connected PV systems? If not, of the listings are solar water-heating has it installed grid-independent companies and many companies (or stand-alone) PV systems? might not be experienced in PV sys- tem design or installation. Similarly, Experience in installing grid- many electrical contractors, although connected systems is valuable proficient in typical electrical con- because some elements of the instal- tracting work, might not have expert- lation—particularly interconnection ise in PV or residential roof-mounting with the local utility—are unique techniques. How do you identify solar to these systems. Because grid- electric system providers? Here are connected systems are relatively several suggestions. uncommon, however, most contrac- tors with PV experience have worked • Check the Source Guide for renew- only on stand-alone systems. So, able energy businesses (including they have experience with all aspects PV) by name, product type, business of PV system installation except type, and location: http://energy. connection with the utility grid. sourceguides.com/index.shtml However, a competent company with PV experience should not be • Contact the Solar Energy Industries eliminated just because it has not Association (SEIA) at 202-628-7745 yet installed grid-connected PV. for a list of solar service providers. Experience with off-grid systems is • Contact your utility company valuable, because grid-independent to see which vendors it might systems are more technically com- recommend. plex than grid-tied systems. • Conduct a search on the Internet. How many years of experience Reputable, professional contractors does the company have installing with experience in PV systems are PV systems? the best choice for the actual This issue speaks for itself: A contrac- installation. tor who has been in business a long time probably understands how to How do you choose among work with customers and to compete PV providers? effectively with other firms. Compile a list of prospective PV providers. (Those closest to you 11 Is the company properly licensed? can tell you about any judgments or PV systems should be installed by complaints against a state-licensed an appropriately licensed contractor. electrician. Consumers should call This usually means that either the the city and county they live in for installer or a subcontractor has an information on how to evaluate con- electrical contractor's license. Your tractors. The Better Business Bureau State Electrical Board can tell you is another source of information. whether a contractor has a valid electrician's license. Local building How do you choose among departments might also require that competing bids? the installer have a general contrac- If you decide to get more than one tor's license. Call the city or county bid for the installation of your PV you live in for additional informa- system (always a good idea), make tion on licensing. sure that all bids are made on the same basis. For example, a bid for a A solar rebate program may require system mounted on the ground is that, in addition to being properly usually very different from another licensed, installers must demonstrate bid for a rooftop system. that they have special knowledge about installing PV systems. This spe- Similarly, some PV modules generate cial knowledge may be demonstrated more electricity per square foot than in one of the following ways: others. Bids should clearly state the maximum generating capacity of the • Possession of a solar contractor system (measured in watts or kilo- specialty license, issued by a local watts). If possible, have the bids spec- building jurisdiction, that recog- ify the system capacity in “AC watts” nizes—through testing or other under a standard set of test condi- means—special knowledge of PV tions, or specify the output of the systems system at the inverter. • Certification in PV systems by a Also request an estimate of the group such as the state chapter amount of energy that the system of SEIA will produce on an annual basis • A letter from the PV system manu- (measured in kilowatt-hours). facturer stating that the installer Because the amount of energy has the experience and training depends on the amount of sun- needed to install the system light—which varies by location, sea- properly. son, and year to year—it’s unlikely the contractor will quote a specific Does the company have any figure, but a range of ±20% is realis- pending or active judgments tic. Bids also should include the total or liens against it? cost of getting the PV system up and As with any project that requires a running, including hardware, instal- contractor, due diligence is recom- lation, connection to the grid, per- mended. Your state electrical board mitting, sales tax, and warranty. 12 Your warranty is a very important factor for evaluating bids. A solar rebate program may require that systems be covered by a two-year parts-and-labor written installation warranty, for example, in addition to any manufacturers' warranties on specific components. The installer may offer longer warranties. Also, ask yourself, “Will this company stand behind the full-system warranty for the next two years?” Is the lowest price the “best deal”? It might not be. You generally get what you pay for, and it's possible that a low price could be a sign of inexperience. Companies that plan to stay in business must charge enough for their products and A home in the woods of New Alan Ford/PIX09507 services to cover their costs, plus a Hampshire had too much shade fair profit margin. Therefore, price to use PV on the roof. The should not be the only considera- solution was installing a tion, and quality should probably rank high on the list. freestanding PV array. 13 Before connecting a PV system to the grid What should you know about rely on Article 690 for guidance in permits? determining whether your PV system has been properly designed and If you live where a homeowners asso- installed. If you are one of the first ciation must approve a solar electric people in your community to install system, you or your PV provider may a grid-connected PV system, your need to submit your plans. You’ll local building department may not need approval before you begin have experience in approving one installing your PV system. However, of these systems. If this is the case, some state laws stipulate that you you and your PV provider can speed have the right to install a solar the process by working closely with electric system on your home. building officials to bring them up You will probably need to obtain per- to speed on the technology. mits from your city or county building department. These include a building What should you know about permit, an electrical permit, or both. insurance? Typically, your PV provider will take For grid-connected PV systems, your care of this, rolling the price of the electric utility will require that you permits into the overall system price. enter into an interconnection agree- However, in some cases, your PV ment (see also the next section). provider may not know how much Usually, these agreements set forth the time or money will be involved in minimum insurance requirements to “pulling” a permit. If so, this task keep in force. If you are buying a PV may be priced on a time-and-materi- system for your home, your standard als basis, particularly if additional homeowner’s insurance policy is drawings or calculations must be usually adequate to meet the utility’s provided to the permitting agency. requirements. However, if insurance In any case, make sure the permit- coverage becomes an issue, contact ting costs and responsibilities are one of the groups listed in the Getting addressed at the start with your PV Help section. provider before installation begins. How do you get an Code requirements for PV systems interconnection agreement? vary somewhat from one jurisdiction Connecting your PV system to the to the next, but most are based on utility grid will require an intercon- the National Electrical Code (NEC). nection agreement and a purchase Article 690 in the NEC spells out and sale agreement. Federal law and requirements for designing and some state public utility commission installing safe, reliable, code-compliant regulations require utilities to supply PV systems. Because most local you with an interconnection agree- requirements are based on the NEC, ment. Some utilities have developed your building inspector is likely to 14 simplified, standardized interconnec- Practice for Utility Interface of tion agreements for small-scale PV Photovoltaic Systems. Institute of systems. Electrical and Electronic Engineers, Inc., New York, NY (1998). The interconnection agreement speci- fies the terms and conditions under • Underwriters Laboratories, UL which your system will be connected Subject 1741: Standard for Static to the utility grid. These include your Inverters and Charge Controllers for obligation to obtain permits and insur- Use in Photovoltaic Power Systems ance, maintain the system in good (First Edition). Underwriters working order, and operate it safely. Laboratories, Inc., Northbrook, IL The purchase and sale agreement spec- (December 1997). ifies the metering arrangements, the You don’t need to fully understand payment for any excess generation, these standards, but your PV provider and any other related issues. and utility should. It is your obliga- The language in these contracts tion to make sure that your PV should be simple, straightforward, provider uses equipment that com- and easy to understand. If you are plies with the relevant standards, unclear about your obligations under however, so be sure to discuss this these agreements, contact the utility issue. or your electrical service provider for clarification. If your questions are How do you get a net- not answered adequately, contact metering agreement? one of the groups in the Getting Some utilities offer customers with Help section. PV systems the option to net meter National standards for utility inter- the excess power generated by the connection of PV systems are being PV system. As noted, this means that adopted by many local utilities. The when the PV system generates more most important of these standards power than the household can use, focuses on inverters. Traditionally, the utility pays the full retail price inverters simply converted the DC for this power in an even swap as the electricity generated by PV modules electric meter spins backward, and to the AC electricity we use in our your PV power goes into the grid. homes. More recently, inverters have Net metering allows eligible cus- evolved into remarkably sophisticat- tomers with PV systems to connect ed devices to manage and condition to the grid with their existing single power. Many new inverters contain meter. Almost all standard utility all the protective relays, disconnects, meters can measure the flow of and other components necessary to energy in either direction. The meter meet the most stringent national spins forward when electricity is standards. Two of these standards are flowing from the utility into the particularly relevant: building and spins backward when • Institute of Electrical and Electronic power is flowing from the building Engineers, P929: Recommended to the utility. 15 For example, in one utility program, the system size, because you may want customers are billed monthly for the to limit generating excess electricity. “net” energy consumed. If the cus- Such a “dual metering” arrangement is tomer’s net consumption is negative the norm for industrial customers who in any month (i.e., the PV system generate their own power. produces more energy than the cus- tomer uses), the balance is credited What should you know about to subsequent months. Once a year, utility and inspection sign-off? on the anniversary of the effective After your new PV system is date of the interconnection agree- installed, it must be inspected and ment, the utility pays the customer “signed off” by the local permitting for any negative balance at its whole- agency (usually a building or electri- sale or “avoided cost” for energy, cal inspector) and most likely by which may be quite small, perhaps the electric utility with which you less than 2 cents per kilowatt-hour. entered into an interconnection Net metering allows customers to get agreement. Inspectors may require more value from the energy they your PV provider to make corrections generate. It also simplifies both the (which is fairly common in the con- metering process (by eliminating the struction business). A copy of the need for a second meter) and the building permit showing the final accounting process (by eliminating inspection sign-off may be required the need for monthly payments from to qualify for a solar rebate program. your utility). Be sure to ask your utility about its policy regarding What should you know about net metering. warranties? Under the federal Public Utility Warranties are key to ensuring that Regulatory Policies Act (PURPA), utili- your PV system will be repaired if ties must allow you to interconnect something should malfunction dur- your PV system. They must also buy ing the warranty period. PV systems any excess electricity you generate, eligible for some solar rebate pro- beyond what you use in your home or grams must carry a full (not “limit- business. If your utility does not offer ed”) two-year warranty, in addition net metering, it will probably require to any manufacturers’ warranties on you to use two meters: one to measure specific components. This warranty the flow of electricity into the build- should cover all parts and labor, ing, the other to measure the flow of including the cost of removing any electricity out of the building. If net defective component, shipping it to metering is not available, the utility the manufacturer, and reinstalling will pay you only a wholesale rate for the component after it is repaired your excess electricity. This provides a or replaced. The rebate program’s strong incentive to use all the electrici- two-year warranty requirement ty you generate so that it offsets elec- supersedes any other warranty tricity you would otherwise have to limitations. In other words, even if purchase at the higher retail rate. This the manufacturer’s warranty on a may be a factor in how you optimize particular component is less than 16 two years, the system vendor must Know the financial arrangements, provide you with a two-year warran- such as contractor's bonds, that ty. Similarly, even if the manufactur- ensure the warranty will be honored. er’s warranty is a limited warranty (A warranty does not guarantee that that does not include the cost of the company will remain in busi- removing, shipping, and reinstalling ness). Find out whom to contact defective components, the system if there is a problem. Under some vendor must cover these costs if solar rebate programs, vendors must the retailer/vendor also installed provide documentation on system the system. and component warranty coverage and claims procedures. To avoid any Be sure you know who is responsible later misunderstandings, be sure to for honoring the various warranties read the warranty carefully and associated with your system—the review the terms and conditions installer, the dealer, or the manufac- with your retailer/vendor. turer. The vendor should disclose the warranty responsibility of each party. Getting Help For more information on solar electric This Web site has a listing of state systems, please contact: Public Utility Commissions that you National Association of State Energy may contact. Officials (NASEO) Solar Energy Industries Association (SEIA) 1414 Prince Street 1616 H Street, N.W., Suite 800 Suite 200 Washington, DC 20006 Alexandria, Virginia 22314 Phone: 202-628-7745 • Fax: 202-628-7779 Phone: 703-299-8800 • Fax: 703-299-6208 www.seia.org www.naseo.org/members/states.htm The Solar Energy Industries Association Check the above Web site to find the is the national trade association of the contact for your state energy office, solar industry. Many states have a state which typically promotes the develop- chapter of the national SEIA organiza- ment and use of renewable energy tion, which can be found on SEIA’s resources in your state. The office might Web site. offer technical assistance, sponsor work- shops and forums, and provide general Other helpful Web sites information to resident energy con- Solar Energy Technologies Program: sumers on renewable energy resources www.eere.energy.gov/solar and applications. National Center for Photovoltaics: National Association of Regulatory and www.nrel.gov/ncpv Utility Commissioners (NARUC) 1101 Vermont, N.W. Million Solar Roofs: www.millionsolar- Suite 200 roofs.com Washington, DC 20005 Database of State Incentives for Phone: 202-898-2200 • Fax: 202-898-2213 Renewable Energy (DSIRE): www.naruc.org www.dsireusa.org 17 About the Office of Energy Efficiency and Renewable Energy A Strong Energy Portfolio for a Strong America Energy efficiency and clean, renewable energy will mean a stronger economy, a cleaner environment, and greater energy independence for America. By investing in technology breakthroughs today, our nation can look forward to a more resilient economy and secure future. Far-reaching technology changes will be essential to America's energy future. Working with a wide array of state, community, industry, and university partners, the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy invests in a portfolio of energy technologies that will: • Conserve energy in the residential, commercial, industrial, government, and transporta- tion sectors • Increase and diversify energy supply, with a focus on renewable domestic sources • Upgrade our national energy infrastructure • Facilitate the emergence of hydrogen technologies as vital new "energy carriers." The Opportunities Biomass Program—Using domestic, plant-derived resources to meet our fuel, power, and chemical needs Building Technologies Program—Homes, schools, and businesses that use less energy, cost less to operate, and, ultimately, generate as much power as they use Distributed Energy & Electric Reliability Program—A more reliable energy infrastructure and reduced need for new power plants Federal Energy Management Program—Leading by example, saving energy and taxpayer dollars in federal facilities FreedomCAR & Vehicle Technologies Program—Less dependence on foreign oil, and eventual transition to an emissions-free, petroleum-free vehicle Geothermal Technologies Program—Tapping the Earth's energy to meet our heat and power needs Hydrogen, Fuel Cells & Infrastructure Technologies Program—Paving the way toward a hydrogen economy and net-zero carbon energy future Industrial Technologies Program—Boosting the productivity and competitiveness of U.S. industry through improvements in energy and environmental performance Solar Energy Technology Program—Utilizing the sun's natural energy to generate electricity and provide water and space heating Weatherization & Intergovernmental Program—Accelerating the use of today's best energy-efficient and renewable technologies in homes, communities, and businesses Wind & Hydropower Technologies Program—Harnessing America's abundant natural resources for clean power generation To learn more, visit www.eere.energy.gov The National Renewable Energy Laboratory, a DOE national laboratory, produced this Consumer’s Guide for: U.S. Department of Energy Office of Energy Efficiency and Renewable Energy 1000 Independence Avenue, S.W. Washington, D.C. 20585 December 2003 • DOE/GO-102003-1844
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