What should you know about permits?

Before connecting a PV system to the grid

If you live where a homeowners association must approve a solar electric

system, you or your PV provider may need to submit your plans. You’ll

need approval before you begin installing your PV system. However, some state laws stipulate that you have the right to install a solar electric system on your home.

You will probably need to obtain permits from your city or county building

department. These include a building permit, an electrical permit, or both.

Typically, your PV provider will take care of this, rolling the price of the permits into the overall system price. However, in some cases, your PV

provider may not know how much time or money will be involved in "pulling" a permit. If so, this task may be priced on a time-and-materials basis, particularly if additional drawings or calculations must be

provided to the permitting agency.

In any case, make sure the permitting costs and responsibilities are

addressed at the start with your PV provider before installation begins.

Code requirements for PV systems vary somewhat from one jurisdiction

to the next, but most are based on the National Electrical Code (NEC).

Article 690 in the NEC spells out requirements for designing and

installing safe, reliable, code-compliant PV systems. Because most local

requirements are based on the NEC, your building inspector is likely to rely on Article 690 for guidance in determining whether your PV system has been properly designed and installed.

If you are one of the first people in your community to install a grid-connected PV system, your local building department may not have experience in approving one of these systems. If this is the case, you and your PV provider can speed the process by working closely with building officials to bring them up to speed on the technology.

What should you know about insurance?

For grid-connected PV systems, your electric utility will require that you

enter into an interconnection agreement (see also the next section).

Usually, these agreements set forth the minimum insurance requirements to

keep in force. If you are buying a PV system for your home, your standard

homeowner’s insurance policy is usually adequate to meet the utility’s

requirements. However, if insurance coverage becomes an issue, contact one of the groups listed in the Getting Help section.

How do you get an interconnection agreement?

Connecting your PV 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 PV 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 PV systems are beingadopted by many local utilities. The

most important of these standards focuses on inverters. Traditionally, inverters simply converted the DC electricity generated by PV 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:

• Institute of Electrical and Electronic Engineers, P929: Recommended

Practice for Utility Interface of Photovoltaic Systems. Institute of Electrical and Electronic Engineers, Inc., New York, NY (1998).

• Underwriters Laboratories, UL Subject 1741: Standard for Static Inverters and Charge Controllers for Use in Photovoltaic Power Systems (First Edition). Underwriters Laboratories, Inc., Northbrook, IL (December 1997).

You don’t need to fully understand these standards, but your PV provider

and utility should. It is your obligation to make sure that your PV provider uses equipment that complies with the relevant standards, however, so be sure to discuss this issue.

How do you get a netmetering agreement?

Some utilities offer customers with PV systems the option to net meter the excess power generated by the PV system. As noted, this means that when the PV 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 PV power goes into the grid.

Net metering allows eligible customers with PV 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 PV 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 PV 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.

What should you know about utility and inspection sign-off?

After your new PV system is installed, it must be inspected and "signed off" by the local permitting agency (usually a building or electrical inspector) and most likely by the electric utility with which you entered into an interconnection agreement. Inspectors may require your PV provider to make corrections (which is fairly common in the construction business). A copy of the building permit showing the final inspection sign-off may be required to qualify for a solar rebate program.

What should you know about warranties?

Warranties are key to ensuring that your PV system will be repaired if something should malfunction during the warranty period. PV systems eligible for some solar rebate programs must carry a full (not "limited") two-year warranty, in addition to any manufacturers’ warranties on specific components. This warranty should cover all parts and labor, including the cost of removing any defective component, shipping it to the manufacturer, and reinstalling the component after it is repaired or replaced. The rebate program’s two-year warranty requirement supersedes any other warranty limitations. In other words, even if the manufacturer’s warranty on a particular component is less than two years, the system vendor must provide you with a two-year warranty.

Similarly, even if the manufacturer’s warranty is a limited warranty that does not include the cost of removing, shipping, and reinstalling defective components, the system vendor must cover these costs if the retailer/vendor also installed the system.

Be sure you know who is responsible for honoring the various warranties

associated with your system—the installer, the dealer, or the manufacturer.

The vendor should disclose the warranty responsibility of each party.

Know the financial arrangements, such as contractor's bonds, that ensure the warranty will be honored. (A warranty does not guarantee that the company will remain in business).

Find out whom to contact if there is a problem. Under some solar rebate programs, vendors must provide documentation on system and component warranty coverage and claims procedures. To avoid any later misunderstandings, be sure to read the warranty carefully and review the terms and conditions with your retailer/vendor.