U.S. Department of Energy Solar Photovoltaic System Guide

8/14/2019 U.S. Department of Energy Solar Photovoltaic System Guide

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Bringing you a prosperous future where energy is clean, abundant, reliable, and affordable

A Consumers Guide

GetYourPower fromthe Sun


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Background

What is a solar electric or photovoltaic system? . . . . . . . . . . . . . . . .2Are 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 featuresshould it have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

How much will you save with your PV system? . . . . . . . . . . . . . . . . .8

How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . .8How 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 gridWhat 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

Contents

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 Consumers 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.


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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-gythe sun. And PV systems for homes and businesses are becoming moreaffordable 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 yourhomes 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 meteringmeans that when your PV system generates more power than you need, theexcess goes to the utility grid and the meter runs backward. This allows youto 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 systemfor thatinformation, we recommend consulting an experienced PV system designeror supplier.

A PV system can be a substantial investment. As with any investment, carefulplanning will help you make the right decisions for your home or business.

GetYourPower fromthe Sun

WarrenGretz,NREL/PIX06283


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Special appliances that run directlyon DC power are available, but theycan be expensive.

Before you decide to buy a PV system,there are some things to consider:

First, PV produces power intermit-tently because it works only whenthe sun is shining. This is not a prob-lem for PV systems connected to theutility grid, because any additionalelectricity required is automaticallydelivered to you by your utility. Inthe case of non-grid, or stand-alone,PV systems, batteries can be pur-chased to store energy for later use.

Second, if you live near existingpower lines, PV-generated electricityis usually more expensive than con-ventional utility-supplied electricity.Although PV now costs less than

1% of what it did in the 1970s, theamortized price over the life of thesystem is still about 25 cents perkilowatt-hour. This is double toquadruple what most people pay forelectricity from their utilities. A solarrebate program and net metering canhelp make PV more affordable, butthey can't match today's price forutility electricity in most cases.

Finally, unlike the electricity youpurchase monthly from a utility, PVpower requires a high initial invest-ment. This means that buying a PVsystem is like paying years of electricbills up front. Your monthly electric

bills will go down, but the initialexpense of PV may be significant.By financing your PV system, youcan spread the cost over many years,and rebates can also lighten yourfinancial load.

Are incentives available tohelp reduce the cost?

Yes, many states offer incentives.For specific information, call one ofthe contacts listed under Getting

Help at the end of this booklet.Another excellent source is theNational Database of State Incent-ives for Renewable Energy (DSIRE).Prepared by the North Carolina SolarCenter, this database contains infor-mation on financial and regulatoryincentives that promote renewable

energy technologies.Net MeteringIn more than 35states, customers who own PV sys-tems can benefit from laws andregulations that require net electricmeter reading. The customer is billedfor the net electricity purchased fromthe utility over the entire billing

periodthat is, the differencebetween the electricity coming fromthe power grid and the electricitygenerated by the PV system. Throughnet metering, the customer obtainsthe full retail electricity rateratherthan the much lower wholesaleratefor kilowatt-hours of PV-pro-

duced electricity sent to the utilitypower grid. The benefits of netmetering to consumers are especiallysignificant in areas such as Hawaiiand New York, which have highretail electric rates. Utilities alsobenefit because the solar-generatedenergy often coincides with theirperiods of peak demand forelectricity.

Property and Sales TaxTaxincentives may include a sales taxexemption on the PV system pur-chase, a property tax exemption,or state personal income-tax credits,


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all of which provide an economicbenefit to consumers by loweringhigh capital costs. The U.S. govern-

ment also provides financial supportfor PV technology through a taxcredit for commercial uses of solarenergy. This energy investment creditprovides businesses (but not individ-uals or utilities) with a 10% tax creditand 5-year accelerated depreciationfor the cost of equipment used togenerate solar electricity.

Buy-DownRebates and buy-downs, typically based on the ratedpower of the system, help to defrayhigh capital costs and to createcompetitive, sustainable market

growth. In the United States, theU.S. Department of Energy has beeninvolved in a program known as

TEAM-UP, or Technology Experienceto Accelerate Markets in UtilityPhotovoltaics. Through this program,some 80 utilities in 40 states haveinstalled more than 7 megawattsof grid-connected PV; supplier buy-downs and consumer rebates rangebetween $2 and $4 per watt.

Residential Energy RateThisis the average retail residential ratefor energy from utilities, in centsper kilowatt-hour. Check your utilitybill for your actual rate.

PV awnings such as this one in California provide both

electricity and shade.AstroPower/PIX12346


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Why should you buy a PVsystem?

People decide to buy PV systems fora variety of reasons. Some peoplewant to help preserve the Earth'sfinite fossil-fuel resources and reduceair pollution. Others want to investin an energy-producing improve-ment to their property. Some peoplelike the security of reducing the

amount of electricity they buy fromtheir utility because it makes themless vulnerable to future priceincreases. And some people justappreciate the independence thata PV system provides.

If you plan to build a home awayfrom an established utility service,

inquire about the cost of installinga utility line. Often, the cost ofextending conventional power toyour residence is higher than thecost of a solar option.

Whatever your reason, solar energyis widely thought to be the energy

source of choice for the future, andyou may be able to take advantageof a state-sponsored program to helpmake it your energy choice for todayand tomorrow.

Is your home or business agood place for a PV system?

Can you locate your systemso it works well?

A well-designed PV system needsclear and unobstructed access to thesun's rays for most or all of the day,throughout the year. You can makean initial assessment yourself. If the

location looks promising, your PVprovider can determine whether your

home or business can effectively usea PV system.

The orientation of your PV system(the compass direction that your sys-tem faces) affects its performance. Inthe United States, the sun is alwaysin the southern half of the sky but ishigher in the summer and lower in

the winter. Usually, the best locationfor a PV system is a south-facingroof, but roofs that face east or westmay also be acceptable. Flat roofsalso work well for solar electric sys-tems, because PV modules can bemounted flat on the roof facing thesky or bolted on frames tilted toward

the south at an optimal angle. Theycan also be attached directly to theroof as PV shingles.

If a rooftop can't be used, your solarmodules can also be placed on theground, either on a fixed mount ora tracking mount that follows thesun to orient the PV modules. Other

options (often used in multifamilyor commercial applications) includemounting structures that create cov-ered parking, or that provide shadeas window awnings.

Is your site free from shading bytrees, nearby buildings, or other

obstructions?To make the best use of your PV sys-tem, the PV modules must have aclear view of the sun for most orall of the dayunobstructed by trees,roof gables, chimneys, buildings, andother features of your home and the

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Investing in a PV system


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surrounding landscape. Some poten-tial sites for your PV system maybe bright and sunny during certaintimes of the day, but shaded duringother times. Such shading may sub-stantially reduce the amount of elec-tricity that your system will produce.To be eligible for some rebates, yoursystem must be unshaded betweencertain hours during certain times ofthe year. Some states have laws thatestablish your right to protect yoursolar access through the creation ofa solar easement. Your PV provider

can help you determine whetheryour site is suitable for a solarelectric system.

Does your roof or propertycontain a large enough area

for the PV system?

The amount of space that a PV

system needs depends on the sizeof the system you purchase. Someresidential systems require as littleas 50 square feet (for a small startersystem), but others could need asmuch as 1,000 square feet.Commercial systems are typicallyeven larger. If your location limits

the size of your system, you maywant to install one that uses moreefficient PV modules. Greater effi-ciency means that the module needsless surface area to convert sunlightinto a given amount of electricpower. PV modules are availablein a range of types, and some offer

more efficiency per square footthan others do (see table on thenext page). Although the efficiency(percent of sunlight converted toelectricity) varies with the differenttypes of PV modules available today,higher efficiency modules typically

cost more. System sizing, discussedlater in this booklet, should also bediscussed with your PV provider.

What kind of roof do you have,and what is its condition?

Some types of roofs are simpler andcheaper to work with, but a PV sys-tem can be installed on any type.Typically, roofs with compositionshingles are the easiest to work with,and those with slate are the mostdifficult. In any case, an experiencedsolar installer will know how to

work on all types and can use roof-ing techniques that eliminate anypossibility of leaks. Ask your PVprovider how the PV system affectsyour roof warranty.

If your roof is older and needs to bereplaced in the near future, you may

want to replace it at the time the PVsystem is installed to avoid the costof removing and reinstalling yourPV system. PV panels often can beintegrated into the roof itself, andsome modules are actually designedas three-tab shingles or raised-seammetal roof sections. One benefit ofthese systems is their ability to offsetthe cost of roof materials.

How big should your PVsystem be, and what featuresshould it have?

To begin, consider what portion ofyour current electricity needs you

would like your PV system to meet.For example, suppose that you wouldlike to meet 50% of your electricityneeds with your PV system. Youcould work with your PV providerto examine past electric bills and


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determine the size of the PV systemneeded to achieve that goal.

You can contact your utility andrequest the total electricity usage,measured in kilowatt-hours, for your

household or business over the past12 months (or consult your electricbills if you save them). Ask your PVprovider how much your new PVsystem will produce per year (alsomeasured in kilowatt-hours) andcompare that number to your annualelectricity usage (called demand) to

get an idea of how much you willsave. In the next section, we'll pro-vide more information on estimatinghow much you will save.

Some solar rebate programs arecapped at a certain dollar amount.Therefore, a solar electric systemthat matches this cap maximizes

the benefit of the solar rebate.

To qualify for net metering in someservice territories, your PV systemmust have a peak generating capacitythat is typically not more 10 kilo-watts (10,000 watts), although thispeak may differ from state to state.Also, utilities have different provi-sions for buying excess electricity

produced by your system on anannual basis (see the section on netmetering). Finally, customers eligiblefor net metering vary from utility toutility; for example, net meteringcould be allowed for residential cus-

tomers only, commercial customersonly, or both.

One optional feature to consider isa battery system to provide energystorage (for stand-alone systems) orbackup power in case of a utilitypower outage (for grid-connected

systems). Batteries add value to yoursystem, but at an increased price.

As a rule, the cost per kilowatt-hourgoes down as you increase the sizeof the system. For example, manyinverters are sized for systems up to5 kilowatts, so even if your PV arrayis smaller (say, 3 kilowatts), you may

have to buy the same size of inverter.Labor costs for a small system maybe nearly as much as those for a largesystem, so you are likely to get a bet-ter price for installing a 2-kilowattsystem all at once, rather thaninstalling 1 kilowatt each year fortwo years.

Roof Area Needed in Square Feet (shown in Bold Type)

PV ModuleEfficiency (%) PV Capacity Rating (Watts)

100 250 500 1,000 2,000 4,000 10,000

4 30 75 150 300 600 1,200 3,0008 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.


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How much will you savewith your PV system?

The value of your PV system's elec-tricity depends on how much youpay for electricity now and how

much your utility will pay you forany excess power that you generate.If your utility offers net metering(and so pays the full retail price foryour excess electricity), you and yourutility will pay the same price foreach other's electricity. You can usethe calculation box on the next page

to roughly estimate how much elec-tricity your PV system will produceand how much that electricity willbe worth. Actual energy productionfrom your PV system will vary by upto 20% from these figures, dependingon your geographic location, theangle and orientation of your system,the quality of the components, and

the quality of the installation.

Also, you may not get full retailvalue for excess electricity producedby your system on an annual basis,even if your utility does offer netmetering. Be sure to discuss theseissues with your PV provider. Request

a written estimate of the averageannual energy production from thePV system. However, even if an esti-mate is accurate for an average year,actual electricity production willfluctuate from year to year becauseof natural variations in weatherand climate.

If your utility does not offer netmetering, you can still use the calcu-lation box to determine the amountof electricity your system willproduce. However, this is not asstraightforward, because the excess

electricity will not be worth as muchas the electricity you actually use.You may earn only 2 cents perkilowatt-houror less than half theretail ratefor your excess power.

PV systems produce most of theirelectricity during the middle of theday, when residential electric loadstend to be small. If your utility doesnot offer net metering, you maywant to size your system to avoidgenerating electricity significantlybeyond your actual needs.

How much does a PVsystem cost?

No single answer applies in everycase. But a solar rebate and otherincentives can always reduce thecost. Your price depends on a num-ber of factors, including whether

your home is under construction andwhether PV is integrated into theroof or mounted on top of an exist-ing roof. The price also depends onthe PV system rating, manufacturer,retailer, and installer.

The size of your system may be themost significant factor in any meas-

urement of costs versus benefits.Small, single-PV-panel systems withbuilt-in inverters that produce about75 watts may cost around $900installed, or $12 per watt. Thesesmall systems offset only a smallfraction of your electricity bill. A2-kilowatt system that meets nearly

all the needs of a very energy-efficient home could cost $16,000to $20,000 installed, or $8 to $10 perwatt. At the high end, a 5-kilowattsystem that completely meets theenergy needs of many conventional


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homes can cost $30,000 to $40,000

installed, or $6 to $8 per watt. Theseprices are rough estimates; yourcosts depend on your system's con-figuration, your equipment options,and other factors. Your local PVproviders can give you more accurateestimates or bids.

How can you finance the cost

of your PV system?When it comes to financing the costof purchasing and installing yourPV system, there are some specialprograms particular to financingsolar and other renewable energy

Calculating Electricity Bill Savings for a Net-Metered PV System

Determine the system's size in kilowatts (kW). A reasonable range is from1 to 5 kW. This value is the kW of PV input for the equations below.

Based on your geographic location, select the energy production factorfrom 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/kWhx 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.


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investments. But most of the

options will be familiar to you.The best way to finance PV systemsfor homes is through a mortgageloan. Mortgage financing optionsinclude your primary mortgage; asecond mortgage, such as a U.S.Department of Housing and UrbanDevelopment (HUD) Title 1 loan; or

a home-equity loan that is securedby your property. There are twoadvantages to mortgage financing.First, mortgage financing usually pro-vides longer terms and lower interestrates than other loans, such as con-ventional bank loans. Second, theinterest paid on a mortgage loan is

generally deductible on your federaltaxes (subject to certain conditions).If you buy the PV system for yourhome at the same time that youbuild, buy, or refinance the home,adding the cost of the PV system toyour mortgage loan is likely to be

relatively simple. It is also one way

to avoid additional loan applicationforms and fees.

If mortgage financing is not avail-able, look for other sources of fin-ancing, such as conventional bankloans. Seek the best possible combi-nation of low rate and long term.This allows you to amortize your PV

system as inexpensively as possible.Because your PV system is a long-term investment, the terms andconditions of your financing arelikely to be the most importantfactor in determining the effectiveprice of your PV-generated power.

PV systems for businesses are proba-bly best financed through a compa-ny's existing sources of funds forcapital purchasessuch as SmallBusiness Administration loans orconventional bank loans.

This 20-kilowatt PV system produces electricity for the common

areas of a shopping center in Cambridge, Massachusetts.SchottAppliedPowerCorp./PIX08808


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Who sells and installs PVsystems?

In some areas, finding a PV providercan be as simple as picking up thetelephone directory and lookingunder Solar Energy Equipment andSystemsDealers. However, manyof the listings are solar water-heatingcompanies and many companiesmight not be experienced in PV sys-

tem design or installation. Similarly,many electrical contractors, althoughproficient in typical electrical con-tracting work, might not have expert-ise in PV or residential roof-mountingtechniques.How do you identify solarelectric system providers? Here areseveral suggestions.

Check the Source Guide for renew-able energy businesses (includingPV) by name, product type, businesstype, and location: http://energy.sourceguides.com/index.shtml

Contact the Solar Energy IndustriesAssociation (SEIA) at 202-628-7745

for a list of solar service providers. Contact your utility company

to see which vendors it mightrecommend.

Conduct a search on the Internet.

Reputable, professional contractorswith experience in PV systems are

the best choice for the actualinstallation.

How do you choose amongPV providers?

Compile a list of prospective PVproviders. (Those closest to you

should have the lowest travel costs).Contact these providers and find out

what products and services they offer.The following questions may give youa good sense of their capabilities:

Has the company installed grid-connected PV systems? If not,has it installed grid-independent(or stand-alone) PV systems?

Experience in installing grid-connected systems is valuablebecause some elements of the instal-lationparticularly interconnectionwith the local utilityare uniqueto these systems. Because grid-connected systems are relativelyuncommon, however, most contrac-tors with PV experience have worked

only on stand-alone systems. So,they have experience with all aspectsof PV system installation exceptconnection with the utility grid.However, a competent companywith PV experience should not beeliminated just because it has notyet installed grid-connected PV.

Experience with off-grid systems isvaluable, because grid-independentsystems are more technically com-plex than grid-tied systems.

How many years of experiencedoes the company have installing

PV systems?

This issue speaks for itself: A contrac-tor who has been in business a longtime probably understands how towork with customers and to competeeffectively with other firms.

Selecting a PV provider


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Is the company properly licensed?

PV systems should be installed byan appropriately licensed contractor.This usually means that either theinstaller or a subcontractor has an

electrical contractor's license. YourState Electrical Board can tell youwhether a contractor has a validelectrician's license. Local buildingdepartments might also require thatthe installer have a general contrac-tor's license. Call the city or countyyou live in for additional informa-tion on licensing.

A solar rebate program may requirethat, in addition to being properlylicensed, installers must demonstratethat they have special knowledgeabout installing PV systems. This spe-cial knowledge may be demonstratedin one of the following ways:

Possession of a solar contractorspecialty license, issued by a localbuilding jurisdiction, that recog-nizesthrough testing or othermeansspecial knowledge of PVsystems

Certification in PV systems by a

group such as the state chapterof SEIA

A letter from the PV system manu-facturer stating that the installerhas the experience and trainingneeded to install the systemproperly.

Does the company have anypending or active judgmentsor liens against it?

As with any project that requires acontractor, due diligence is recom-mended. Your state electrical board

can tell you about any judgments orcomplaints against a state-licensedelectrician. Consumers should callthe city and county they live in forinformation on how to evaluate con-tractors. The Better Business Bureau

is another source of information.

How do you choose amongcompeting bids?

If you decide to get more than onebid for the installation of your PVsystem (always a good idea), makesure that all bids are made on thesame basis. For example, a bid for asystem mounted on the ground isusually very different from anotherbid for a rooftop system.

Similarly, some PV modules generatemore electricity per square foot thanothers. Bids should clearly state the

maximum generating capacity of thesystem (measured in watts or kilo-watts). If possible, have the bids spec-ify the system capacity in AC wattsunder a standard set of test condi-tions, or specify the output of thesystem at the inverter.

Also request an estimate of the

amount of energy that the systemwill produce on an annual basis(measured in kilowatt-hours).Because the amount of energydepends on the amount of sun-lightwhich varies by location, sea-son, and year to yearits unlikelythe contractor will quote a specific

figure, but a range of 20% is realis-tic. Bids also should include the totalcost of getting the PV system up andrunning, including hardware, instal-lation, connection to the grid, per-mitting, sales tax, and warranty.


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Your warranty is a very importantfactor for evaluating bids. A solarrebate program may require thatsystems be covered by a two-yearparts-and-labor written installationwarranty, for example, in additionto any manufacturers' warranties onspecific components. The installermay offer longer warranties. Also, askyourself, Will this company standbehind the full-system warranty forthe next two years?

Is the lowest price the best

deal?It might not be. You generally getwhat you pay for, and it's possiblethat a low price could be a sign ofinexperience. Companies that planto stay in business must chargeenough for their products andservices to cover their costs, plus a

fair profit margin. Therefore, priceshould not be the only considera-tion, and quality should probablyrank high on the list.

A home in the woods of New

Hampshire had too much shade

to use PV on the roof. The

solution was installing a

freestanding PV array.AlanFord/PIX09

507


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What should you know aboutpermits?

If you live where a homeowners asso-ciation must approve a solar electricsystem, you or your PV provider mayneed to submit your plans. Youllneed approval before you begininstalling your PV system. However,some state laws stipulate that youhave the right to install a solar

electric system on your home.

You will probably need to obtain per-mits from your city or county buildingdepartment. These include a buildingpermit, an electrical permit, or both.Typically, your PV provider will takecare of this, rolling the price of thepermits into the overall system price.

However, in some cases, your PVprovider may not know how muchtime or money will be involved inpulling a permit. If so, this taskmay be priced on a time-and-materi-als basis, particularly if additionaldrawings or calculations must be

provided to the permitting agency.In any case, make sure the permit-ting costs and responsibilities areaddressed at the start with your PVprovider before installation begins.

Code requirements for PV systemsvary somewhat from one jurisdictionto the next, but most are based on

the National Electrical Code (NEC).Article 690 in the NEC spells outrequirements for designing andinstalling safe, reliable, code-compliantPV systems. Because most localrequirements are based on the NEC,your building inspector is likely to

rely on Article 690 for guidance indetermining whether your PV system

has been properly designed andinstalled. If you are one of the firstpeople in your community to installa grid-connected PV system, yourlocal building department may nothave experience in approving oneof these systems. If this is the case,you and your PV provider can speedthe process by working closely withbuilding officials to bring them upto speed on the technology.

What should you know aboutinsurance?

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

enter into an interconnection agree-ment (see also the next section).Usually, these agreements set forth theminimum insurance requirements tokeep in force. If you are buying a PVsystem for your home, your standardhomeowners insurance policy isusually adequate to meet the utilitysrequirements. However, if insurance

coverage becomes an issue, contactone of the groups listed in the GettingHelp section.

How do you get aninterconnection agreement?

Connecting your PV system to theutility grid will require an intercon-nection agreement and a purchaseand sale agreement. Federal law andsome state public utility commissionregulations require utilities to supplyyou with an interconnection agree-ment. Some utilities have developed

Before connecting a PV system to the grid


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simplified, standardized interconnec-tion agreements for small-scale PVsystems.

The interconnection agreement speci-fies the terms and conditions under

which your system will be connectedto the utility grid. These include yourobligation to obtain permits and insur-ance, maintain the system in goodworking order, and operate it safely.The purchase and sale agreement spec-ifies the metering arrangements, thepayment for any excess generation,

and any other related issues.The language in these contractsshould be simple, straightforward,and easy to understand. If you areunclear about your obligations underthese agreements, contact the utilityor your electrical service provider forclarification. If your questions are

not answered adequately, contactone of the groups in the GettingHelp section.

National standards for utility inter-connection of PV systems are beingadopted by many local utilities. Themost important of these standardsfocuses on inverters. Traditionally,inverters simply converted the DCelectricity generated by PV modulesto the AC electricity we use in ourhomes. More recently, inverters haveevolved into remarkably sophisticat-ed devices to manage and conditionpower. Many new inverters containall the protective relays, disconnects,

and other components necessary tomeet the most stringent nationalstandards. Two of these standards areparticularly relevant:

Institute of Electrical and ElectronicEngineers,P929: Recommended

Practice for Utility Interface ofPhotovoltaic Systems. Institute ofElectrical and Electronic Engineers,Inc., New York, NY (1998).

Underwriters Laboratories, UL

Subject 1741: Standard for StaticInverters and Charge Controllers forUse in Photovoltaic Power Systems(First Edition). UnderwritersLaboratories, Inc., Northbrook, IL(December 1997).

You dont need to fully understandthese standards, but your PV provider

and utility should. It is your obliga-tion to make sure that your PVprovider uses equipment that com-plies with the relevant standards,however, so be sure to discuss thisissue.

How do you get a net-

metering agreement?Some utilities offer customers withPV systems the option to net meterthe excess power generated by thePV system. As noted, this means thatwhen the PV system generates morepower than the household can use,the utility pays the full retail price

for this power in an even swap as theelectric meter spins backward, andyour PV power goes into the grid.

Net metering allows eligible cus-tomers with PV systems to connectto the grid with their existing singlemeter. Almost all standard utilitymeters can measure the flow ofenergy in either direction. The meterspins forwardwhen electricity isflowing from the utility into thebuilding and spins backwardwhenpower is flowing from the buildingto the utility.


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For example, in one utility program,customers are billed monthly for thenet energy consumed. If the cus-tomers net consumption is negativein any month (i.e., the PV systemproduces more energy than the cus-

tomer uses), the balance is creditedto subsequent months. Once a year,on the anniversary of the effectivedate of the interconnection agree-ment, the utility pays the customerfor any negative balance at its whole-sale or avoided cost for energy,which may be quite small, perhaps

less than 2 cents per kilowatt-hour.

Net metering allows customers to getmore value from the energy theygenerate. It also simplifies both themetering process (by eliminating theneed for a second meter) and theaccounting process (by eliminatingthe need for monthly payments fromyour utility). Be sure to ask yourutility about its policy regardingnet metering.

Under the federal Public UtilityRegulatory Policies Act (PURPA), utili-ties must allow you to interconnectyour PV system. They must also buy

any excess electricity you generate,beyond what you use in your home orbusiness. If your utility does not offernet metering, it will probably requireyou to use two meters: one to measurethe flow of electricity into the build-ing, the other to measure the flow ofelectricity out of the building. If net

metering is not available, the utilitywill pay you only a wholesale rate foryour excess electricity. This provides astrong incentive to use all the electrici-ty you generate so that it offsets elec-tricity you would otherwise have topurchase at the higher retail rate. Thismay be a factor in how you optimize

the system size, because you may wantto limit generating excess electricity.Such a dual metering arrangement isthe norm for industrial customers whogenerate their own power.

What should you know aboututility and inspection sign-off?

After your new PV system isinstalled, it must be inspected andsigned off by the local permittingagency (usually a building or electri-cal inspector) and most likely bythe electric utility with which youentered into an interconnectionagreement. Inspectors may requireyour PV provider to make corrections(which is fairly common in the con-struction business). A copy of thebuilding permit showing the finalinspection sign-off may be requiredto qualify for a solar rebate program.

What should you know aboutwarranties?

Warranties are key to ensuring thatyour PV system will be repaired ifsomething should malfunction dur-ing the warranty period. PV systemseligible for some solar rebate pro-grams must carry a full (not limit-ed) two-year warranty, in additionto any manufacturers warranties onspecific components. This warrantyshould cover all parts and labor,including the cost of removing anydefective component, shipping it tothe manufacturer, and reinstalling

the component after it is repairedor replaced. The rebate programstwo-year warranty requirementsupersedes any other warrantylimitations. In other words, even ifthe manufacturers warranty on aparticular component is less than


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two years, the system vendor mustprovide you with a two-year warran-ty. Similarly, even if the manufactur-ers warranty is a limited warrantythat does not include the cost ofremoving, shipping, and reinstallingdefective components, the systemvendor must cover these costs ifthe retailer/vendor also installedthe system.

Be sure you know who is responsiblefor honoring the various warrantiesassociated with your systemthe

installer, the dealer, or the manufac-turer. The vendor should disclose thewarranty responsibility of each party.

Know the financial arrangements,such as contractor's bonds, thatensure the warranty will be honored.(A warranty does not guarantee thatthe company will remain in busi-ness). Find out whom to contactif there is a problem. Under somesolar rebate programs, vendors mustprovide documentation on systemand component warranty coverageand claims procedures. To avoid anylater misunderstandings, be sure toread the warranty carefully andreview the terms and conditions

with your retailer/vendor.

Getting Help

For more information on solar electricsystems, please contact:

National Association of State EnergyOfficials (NASEO)1414 Prince StreetSuite 200Alexandria, Virginia 22314Phone: 703-299-8800 Fax: 703-299-6208www.naseo.org/members/states.htm

Check the above Web site to find thecontact for your state energy office,which typically promotes the develop-ment and use of renewable energyresources in your state. The office mightoffer technical assistance, sponsor work-shops and forums, and provide generalinformation to resident energy con-sumers on renewable energy resources

and applications.National Association of Regulatory andUtility Commissioners (NARUC)1101 Vermont, N.W.Suite 200Washington, DC 20005Phone: 202-898-2200 Fax: 202-898-2213www.naruc.org

This Web site has a listing of statePublic Utility Commissions that youmay contact.

Solar Energy Industries Association (SEIA)1616 H Street, N.W., Suite 800Washington, DC 20006Phone: 202-628-7745 Fax: 202-628-7779www.seia.org

The Solar Energy Industries Association

is the national trade association of thesolar industry. Many states have a statechapter of the national SEIA organiza-tion, which can be found on SEIAsWeb site.

Other helpful Web sites

Solar Energy Technologies Program:www.eere.energy.gov/solar

National Center for Photovoltaics:www.nrel.gov/ncpv

Million Solar Roofs: www.millionsolar-roofs.com

Database of State Incentives forRenewable Energy (DSIRE):www.dsireusa.org


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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, acleaner environment, and greater energy independence for America. By investing intechnology 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 Energyinvests 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 ProgramUsing domestic, plant-derived resources to meet our fuel,power, and chemical needsBuilding Technologies ProgramHomes, schools, and businesses that use lessenergy, cost less to operate, and, ultimately, generate as much power as they useDistributed Energy & Electric Reliability ProgramA more reliable energy

infrastructure and reduced need for new power plantsFederal Energy Management ProgramLeading by example, saving energyand taxpayer dollars in federal facilitiesFreedomCAR & Vehicle Technologies ProgramLess dependence on foreignoil, and eventual transition to an emissions-free, petroleum-free vehicleGeothermal Technologies ProgramTapping the Earth's energy to meetour heat and power needsHydrogen, Fuel Cells & Infrastructure Technologies ProgramPaving theway toward a hydrogen economy and net-zero carbon energy futureIndustrial Technologies ProgramBoosting the productivity and competitiveness

of U.S. industry through improvements in energy and environmental performanceSolar Energy Technology ProgramUtilizing the sun's natural energy togenerate electricity and provide water and space heatingWeatherization & Intergovernmental ProgramAccelerating the use of today'sbest energy-efficient and renewable technologies in homes, communities, and businessesWind & Hydropower Technologies ProgramHarnessing America's abundantnatural resources for clean power generation

To learn more, visit www.eere.energy.gov

The National Renewable Energy Laboratory,

a DOE national laboratory, produced this Consumers Guide for:

U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

1000 Independence Avenue, S.W.

Washington, D.C. 20585

U.S. Department of Energy Solar Photovoltaic System Guide

Documents