Tag: electricity

Will Solar Interconnection and Permitting Improve in 2025?

Posted on by bop-admin

In 2024, the Solar Energy Industries Association (SEIA) said the United States added about 50 GWdc of grid capacity. This was the second straight year solar energy set records, with utility-scale solar adding more than 41 GWdc. 

The signs for solar EPCs look great, but there’s still plenty of room for improvement. Despite excitement for solar, the industry faces permitting and interconnection concerns. 

A Two-Headed Beast 

Permitting and interconnection requests are a 1-2 gut punch for many solar developers and EPCs. 

Developers often find themselves buried in red tape during the permitting process. From building, zoning, and electrical permits to land disturbance studies, compatibility reports, and financial data, it’s a seemingly unending process. It isn’t specific to local government, either; federal and state approvals also matter. 

The other problem is interconnection. Interconnection is the process of attaching solar sites to the larger electrical grid. It includes several studies assessing how solar sites could impact grid operations. Depending on the results, developers may have to alter projects or wait for additional studies. 

Worst of all, developers may have to pay for the interconnection after waiting up to five years for results. Not only is the process expensive, but some utilities may be unwilling to help solar sites connect to the grid.  This leads to even more developer costs and delays. 

Could Help Be Coming? 

We’re still far from a perfect system, but the government wants to make solar development easier. 

The Inflation Reduction Act became law in August 2022, creating more streamlining opportunities and funding. At the same time, the Federal Energy Regulatory Commission (FERC) is pushing to simplify interconnection and permitting. 

This is crucial for the solar industry and the country’s growing electricity demand. Data centers, EVs, and hotter temperatures have pushed electricity use to new heights. Renewables like solar and wind could potentially hold the keys to energy development, but we must collaborate. 

What’s the Current Solar Landscape? 

It shouldn’t be surprising to hear solar capacity waiting in the queue is skyrocketing. 

In December 2023, about 2,600 GW of generation and storage capacity were waiting for grid connection. Of this total, 95% were solar, wind, or battery sites. In fact, solar and battery projects made up 80% of all additions in the queue. 

At the same time, interconnection request times are exploding. In 2008, the average wait was less than two years. For projects built between 2018 and 2023, wait times were about four years. By the end of 2023, projects could languish for as long as five years. 

So, what gives? 

Clunky and Costly 

Electricity use is rapidly rising. But what’s making it difficult for solar operators and utilities to increase grid capacity? 

The Federal Energy Regulatory Commission (FERC) believes it can pinpoint our nation’s electricity generation problem to a few key issues. 

For example, FERC has highlighted the number of interconnection requests these days. In April 2024, Berkeley Lab said around 11,600 projects were waiting to connect, totaling 2,600 GW. As more projects join the queue, delays will keep growing. 

The agency highlighted other issues, including transmission capacity, delayed expansion and upgrade investments, and high interconnection costs. Unfortunately, this results in long delays in the interconnection queue and a higher risk of project withdrawals. 

Permitting Problems 

It’s difficult to break ground when the permitting process is a gauntlet. 

States, counties, and municipalities have different approaches to solar energy. While some embrace it, others adopt a “not in my backyard” stance. Though several counties have gone so far as to ban utility-scale solar, no state has banned large-scale solar projects. 

Although federal regulations govern some aspects of solar development, individual states are different. Several, including Utah, Colorado, Arizona, and New Mexico, have adopted and implemented federal rules. Other states like California and Nevada use federal regulations and supplement them with state-level ones. 

With so many moving parts, solar developers can struggle to keep track of things. Luckily, government organizations like the Environmental Protection Agency (EPA) have compiled databases, guides, and procedures at the state and federal levels. 

Addressing Problems 

Thanks to inconsistent guidelines and processes, there’s plenty of work to sort everything out. 

A single entity, government, or industry organization can’t solve our problems. The cure requires a top-down approach with input from everyone, but someone has to take the lead. 

Interconnection 

SEIA is collaborating with FERC and the Department of Energy to create reforms to improve interconnections. As a result, FERC is pushing interconnection rules to reduce red tape and integrate renewable energy faster. 

The moves coincide with several Independent System Operators struggling to add capacity, including CAISO, NYISO, and MISO. These issues lead to long delays and other problems. As more interconnection applications flood in, ISOs must make the pieces fit without overloading aging infrastructure. 

Updated Rules 

FERC’s rule changes include critical updates to Order 2023 that improve how interconnection requests are handled. 

Under previous rules, the system handled interconnection requests using a “first in, first out” model. While the system works when the queue is short, problems quickly develop as requests pile up. Additionally, under the “first in, first out” system, projects didn’t need viable projects to apply. 

The result was a slow, clunky system. 

Order 2023-A clears up some confusion and allows for faster studies. Under 2023-A, the system installs a “first ready, first served” format. This requires developers to have funding, property, and other assets ready before applying. 

Once the request is in, another Order 2023-A update kicks in. Previously, studies took place one at a time. Order 2023-A introduced study batching, allowing grid operators to perform several studies simultaneously. The move saves time, money, and labor costs by letting grid operators make several decisions (and upgrades) together. 

Tightening Up 

Improving the review process saves time, but what happens if someone drops the ball? 

Under Order 2023-A, developers must be more prepared with financing in place alongside additional site information. By forcing developers to do more leg work before submitting, operators see fewer speculative projects. 

But the onus isn’t entirely on developers to keep the interconnection queue short. Transmission providers must be more prepared to address studies. If operators delay reviews or miss a deadline, they can face penalties. 

Solar Permitting 

Improving the interconnection process is only half of the solution. To get to the heart of the matter, officials must tackle permitting, too. 

One way of making permitting more efficient is to make it more welcoming – starting with the cost. One such program is SolSmart, funded by the DoE’s Solar Energy Technologies Office.  

SolSmart is a nationwide initiative to improve solar development by assisting municipalities, counties, and other organizations. 

By helping local authorities better understand and adopt national practices, SolSmart reduces soft costs like permitting, zoning, and more.  

Its success has led to further investment, including an extension allowing the program to operate through 2027. 

Kicking Up the IRA and BIL 

Two Biden-era laws are rounding into form, with provisions to make solar development more efficient. 

The Inflation Reduction Act and the Bipartisan Infrastructure Law have funding attached to them specifically for improving and modernizing the grid. The funding also improves the permitting process for federal lands to encourage solar development there. 

Additionally, BIL and IRA funding includes several incentives to promote viable solar projects and expedite queues. 

Other Potential Reforms 

It didn’t make it out of the Senate, but the Energy Permitting Reform Act of 2024 had several provisions for solar development and permitting. 

The bill proposed accelerated leasing and permitting on federal lands and establishing clear deadlines for renewable projects like PV systems. It also simplified renewable energy environmental reviews, which can take months to years to complete. 

Most importantly, the bill would have codified a 50 GW renewable energy generation goal for federal lands by 2030. 

Making the Most of the Situation 

Permitting and interconnection processes are difficult and possibly broken. But it doesn’t mean solar developers should sit idly and wait for conditions to improve. 

Develop Partnerships 

The easiest way to navigate solar development red tape is by building good relationships with government sources. Local, state, and federal departments have similar goals but solve problems differently. 

Developers should work closely with each layer of government to get approval for each step. These sources also come in handy if rules change. Additionally, resources like the RAPID database help with best practices, permitting documents, and other information. 

Stay Prepared 

Preparation is paramount, especially as FERC prioritizes viable, well-planned projects. Filings should contain as much information as possible, including assessments, environmental surveys, funding sources, and land data. 

But solar contractors and developers don’t embark on utility-scale projects alone. They build teams with strong strategic partners, including municipalities, interconnecting utilities, and state officials. When speed bumps approach, these partners can help with documentation and other preparation. 

Know Your Permits 

Permit requirements and combinations differ across municipalities, counties, and states. For example, agencies like the Bureau of Land Management (BLM) have processes specifically related to building on federal land. The RAPID database is, once again, an excellent resource for the latest permitting and bulk transmission regulations. 

During difficult preparations, solar companies should hire an experienced consultant. Find a professional in the state where the project will take place and rely on them to help guide the permitting process. Hiring a knowledgeable organization may be expensive but could reduce delays.  

Be Ready for Anything 

The truth is nothing in the solar industry stays the same for long. 

Governments are moving quickly to improve regulations and permitting, with FERC and other groups fixing interconnection methods. But with so much happening around us, keeping up with rapidly changing rules is essential. 

Be prepared, but ready to adapt when necessary. Preparing for every outcome isn’t possible, but adjusting quickly helps developers roll with the punches, limiting costly delays.

What is a Virtual Power Plant?

Posted on by bop-admin

One of the worst feelings is the dread one feels when the power goes out. 

Homes and businesses typically rely on electricity from local power generation plants. For the most part, consumers can reliably power our daily routines and keep life moving smoothly. But it also comes with a massive disadvantage. 

When the power goes out, electricity doesn’t go to end users, leaving them in the dark. While crews work feverishly to restore power, home and business owners worry about spoiled food, lost revenue, and boredom. 

However, emerging technology supported by electrification is changing how power disruptions impact our lives. These virtual power plants (VPPs) can keep the lights on using power created by our neighbors. 

Though they sound complicated, VPPs are the next step toward developing a more dynamic electrical grid. 

What is a VPP? 

By definition, a virtual power plant is a network of decentralized production and storage units combining to send power to the grid. 

But what does that mean in human terms? 

“Decentralized production and storage units” are basically all the pieces making up the VPP. These distributed energy sources (DERs) include everything from solar panels and batteries to electric vehicles (EVs) and smart products. If it can create, store, or control electricity, it can be part of a VPP. They also don’t need to originate from a singular location – VPPs can cover small or large areas. 

The best part is anyone can join a virtual power plant. Potential VPPs can include residential, commercial, industrial, or community-scale systems, though rooftop solar is the most common DER. 

VPP technology has existed for several decades but has taken off dramatically in the last ten years. The Department of Energy estimates that 30-60 GW of VPP grid capacity exists today. 

How Does a VPP Work? 

Let’s pretend a neighborhood has several rooftop solar systems, EVs, and smart homes. If these systems are part of a virtual power plant, utilities can draw from them during an emergency to power other homes and businesses. 

And just like that, a storm rolls through, knocking out a critical power line supplying electricity to several neighborhoods. When power outages or peak demand occurs, the utility activates the VPP. The utility can then remotely “talk” to connected DERs to turn thermostats down, reduce electricity use, and discharge EVs. 

Power flows from connected devices to the grid, sending electricity to other impacted neighborhoods. At the same time, energy loads drop, ensuring enough power is available. 

NOTE: This ONLY happens if the customer has opted in – VPPs require remote control from outside operators, like utilities. 

It might not seem like much, but localizing the grid to specific areas makes it more stable. Utilities can worry less about burning more fuel to send electricity across transmission and distribution lines and focus more on repairs. For end users, VPPs keep the lights on during peak times and emergencies using power supplied by others. 

VPPs Are NOT Smart Grids 

If you know the phrase, “A square is a rectangle, but a rectangle is not a square,” the VPP/smart grid relationship makes sense. 

Think of it like individual states in the nation. For example, Vermont is only one part of the larger United States. 

A VPP is a type of smart grid, but it’s only one piece of the larger smart grid infrastructure. Unlike a virtual power plant, smart grids cover the entire electrical grid, utilizing new technology to improve reliability and resiliency. 

Smart grids create large-scale two-way networks between operators or utilities and end users. Utilities can optimize electricity output and flow through the network, better incorporate renewable energy, and perform real-time monitoring. 

The result is a more dynamic electrical grid that reduces power loss, improves reliability, and saves money. 

Why They’re Gaining Steam 

Storms are getting worse, making power outages more severe. 

In 2023 alone, the U.S. experienced 28 “Billion Dollar” weather events, totaling an eye-popping $95 billion in damages. Weather is also the cause of more than 75% of power outages in the U.S., making it the grid’s number one threat. 

At the same time, the push for groundbreaking technology has never been stronger. More things rely on electricity than ever, requiring vast amounts of electricity. But with smarter electronics and power generation systems, we also have more opportunities to share power. 

Reducing Risk, One Neighborhood at a Time 

Our nation’s electrical grid is showing its age, as many pieces of infrastructure are well over 25 years old. 

Because of its age, the grid is more susceptible to damage caused by storms, physical threats, and cyberattacks. Unfortunately, when systems go down, people and communities are at risk. 

Communities once relied on central power plants to deliver electricity to neighborhoods, businesses, and other locations. But during outages, those people sat in the dark until power was restored. 

Under a VPP, during an outage or demand spike, the utility can remotely call on DERs to discharge power to the grid. Those opting into the program become power plants, drawing on stored energy to electrify those around them. 

Long-Term Savings 

Beyond grid security, VPPs reduce the number and size of electrical transmission and distribution peaks. 

What does that mean for the average person? When peaks occur, it stresses the grid since it has to support more electricity. The strain could lead to problems ranging from blown transformers and substation faults to overheated wires. Fewer peaks mean less threat of overloading the system. 

Peaks occur when there’s more demand than usual. To support the higher demand, peaking power plants generate electricity to meet the need. The problem is these power plants are expensive to run. Someone has to pay those costs, and it’s most likely the end user. 

VPPs take the pressure off power plants to meet peak demand by discharging electricity from DERs. As a result, the utility spends less money on fuel sources and limits energy loss along power lines. Meanwhile, customers receive steady power while VPP participants earn cash or credits for their electricity. 

Best yet, expanding VPP services goes beyond short-term savings. According to the Department of Energy, if the U.S. deploys 80-160 GW of VPPs by 2030, it could save $10 billion in grid costs. 

Taking Advantage of Incentives 

Like other renewable energy initiatives, there are programs and incentives available for VPPs. 

Depending on location, rebates and programs make commercial, industrial, and community-scale solar possible. For example, Maryland’s Distributed Renewable Integration and Vehicle Electrification (DRIVE) Act requires investor-owned utilities to develop programs rewarding DERs and establish incentives.  

Utilities and community solar energy operators also have programs to finance and promote VPPs. The Department of Energy has funded various clean energy installations through Title 17, which provides loans for innovative projects. 

In other cases, state and local incentives for solar and other renewable projects could be available. And don’t forget to research what incentives stack, as organizations and programs cover different initiatives. 

VPPs for Consumers 

Consumers participating in virtual power plants and installing DERs add clean energy to the grid. As more clean energy systems come online, we rely less on large-scale power plants and fossil fuels. Over time, this may reduce electricity costs. 

Additionally, VPPs ensure homes and businesses have power during an outage, reducing other losses. From allowing small businesses to stay open to preventing food spoilage, small power providers keep everything running smoothly. 

As for the bottom line, consumers sending power to the larger grid earn money or credits on their energy bills. Those credits can offset upfront costs related to installing a solar system or battery or buying an EV. 

Downsides and Cautions 

For everything virtual power plants do well, there are some drawbacks to how the system operates. 

Despite owning the power they produce, consumers don’t always have control. When signing up for a VPP, consumers give operators the right to draw energy from DERs when necessary. If that happens, EVs, batteries, solar panels, and smart products connected to the network begin discharging and conserving power. 

Operators have also launched programs to pre-enroll consumers, though they can opt out later. Though it’s easy for utilities to enlist homes, businesses, and others into the program, consumers should be well informed. Participants must understand the program’s details, what to expect, and how utilities will compensate them. 

Not Enough Participants 

Experts believe virtual power plants could help address future energy demands, especially as older plants retire. 

Coal use has declined for years, with 4 GW of coal-fire capacity retiring in 2024. Before last year, retirements averaged about 9.8 GW each year for the previous decade. Worse yet, as retirement and deployment schedules fluctuate, we’re looking at a 200 GW gap in peak demand needs. 

VPPs could fill the potential gap, but the country must act fast. We need about 80-160 GW of capacity by 2030 to meet rising U.S. demand. The current total is only about 30 GW, far from the low-end goal. 

Not a Replacement for Grid Upgrades 

Electricity demand is rising rapidly, thanks to more electronics, a growing number of data centers, and a manufacturing renaissance. 

The result is a fevered effort to find new ways to generate power for the grid. Unfortunately, the current grid isn’t entirely ready for a wave of innovation. Instead, the design supports older power production methods powered by fossil fuels. 

The grid currently can’t reach its full potential because it desperately needs upgrades. Solar projects across the U.S. face massive delays because of red tape and interconnection problems. Other infrastructure has reached its usable lifespan, so we should replace and upgrade it. 

Everyone Plays a Part in Clean Energy 

Utilities, solar companies, businesses, government, and consumers all stand to benefit from VPPs. 

With planning and strong execution, we can cut costs throughout the supply chain. On top of the financial costs, VPPs help improve grid resiliency, leading to fewer power outages. Adding diverse electricity options also gives utilities more access to clean energy, reducing reliance on fossil fuels. 

The future is leaning toward cleaner power, but we still have lots to do. It means finding answers for rising demand, aging infrastructure, interconnections, and industry support. But as we check each box, powering our future becomes more possible.

Bright Idea: Converting Brownfields into Solar Farms

Posted on by bop-admin

Go for a drive anywhere in the United States, and you probably won’t be far from a current or former brownfield site. 

According to the Environmental Protection Agency (EPA), more than 450,000 brownfields litter the U.S. But what is a brownfield, and why are governmental, public, and private organizations so interested in them? 

As it turns out, brownfields may play a vital role in our ongoing solar energy development. The EPA defines a brownfield site as “a property where expansion, redevelopment or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant.” 

Typically, brownfields are former locations used for industrial or commercial activities, including manufacturing, storage, or processing. Using this explanation, examples include factories, gas stations, railyards, and landfills. 

Unfortunately, their ties to chemicals, heavy metals, and other potential pollutants make them unattractive development sites. Unlike greenfield locations, which are undeveloped pieces of land ripe for expansion, brownfields require rehabilitation before use. 

Not Every Brownfield is the Same 

Although every brownfield requires cleanup before reuse, some need more than others. 

Depending on the location and surrounding area, rehabilitation could be worthwhile. Some sites have found new lives as golf courses, offices, shopping areas, mixed-use spaces, and even solar farms. 

But none of this happens without investment, and even then, it could be years before a site is ready for development. However, with enough time, money, and work, formerly forgotten properties can find new life and return to the tax rolls. 

From Brown to Bright 

One type of brownfield receiving a lot of interest from the solar community these days is landfills. 

Landfills are disposal sites for municipal solid waste (MSW), construction and demolition debris (D&C), and hazardous waste. There are two types of facilities: Subtitle D programs, which include non-hazardous municipal and industrial solid waste, and Subtitle C programs, which accept hazardous waste. 

Depending on the location, your local dump can operate for decades, collecting and compacting community garbage. But, like everything else in life, the good times have to end eventually, setting the stage for decommissioning. 

Once the landfill reaches capacity, workers pack it down, install mitigation systems for gas and water to escape, cap it with soil and plants to prevent contamination, and closely monitor it for 30 years.  

While this might seem like the end of the story, solar energy is breathing new life into former dumps. 

Making Something Out of Nothing 

According to a 2021 RMI report, the U.S. has over 10,000 closed or inactive landfill sites. 

Seeing an opportunity, the EPA launched the RE-Powering America’s Land Initiative. The program promotes renewable energy projects on former industrial sites like landfills, mines, and other forgotten places. 

So far, the RE-Powering program has completed 530 projects and installed 2,580 MW of power, including 93% from solar and 5% wind. Even more importantly, the program has completed brownfield redevelopment projects in nearly every U.S. state. 

Every state is different, but some offer financial incentives or streamlined permitting processes to rehabilitate brownfields. Certain states, like New Jersey, New York, and Massachusetts, offer both! 

But what has the program done for former dumping grounds? 

Small Projects, Massive Impact 

Of the 530 projects touted by the RE-Powering program, 60% (318) sit on top of landfills or landfill buffers. Though most of the solar projects generate less than 5MW of power, 16 produce more than 20MW of electricity. 

The EPA’s RE-Powering program is only one of many federal, state, and local projects promoting brownfield redevelopment. For example, Governmental agencies like the Departments of Energy and Transportation tackle national initiatives, while others, like the Appalachian Regional Commission, focus on specific areas. 

According to the EPA, its programs and grants, including the Brownfields Revitalization Act, are making a difference. Through 2023, grant recipients leveraged about $20 per EPA brownfield grant dollar received. But grant money is often only one part of the brownfield puzzle. The agency highlights strong partnerships between local governments, organizations, and public/private groups to find more money. 

Despite the financial costs, federal, state, and local initiatives are addressing several long-term issues at the same time. They are finding new and creative ways to reuse brownfields and meet increasing electricity demand. 

Why Landfills Make Great Solar Sites 

Let’s be real: landfills are often not great spots to put a community park. However, they’re excellent places to set up a solar site. 

But what makes a landfill conversion so alluring for solar development? Turns out former dumping grounds are a popular choice for several reasons. 

  • Landfills are not prime real estate development targets. They require money, time, and labor to rehabilitate and carry the stigma of former pollution. 
  • Dumps tend to be in areas near roads and electrical transmission lines. Their placement makes it easier for solar energy producers to move power from the site to the electrical grid. 
  • Landfill sites may already be zoned for renewable energy development, streamlining the planning and permitting process. 
  • Solar sites near populated areas like towns may have access to guaranteed power buyers, especially in high-demand regions. 
  • Landfills have a welcoming landscape for solar energy, with little shade, unobstructed views, and even hilltop access in some instances. 
  • The land is typically cheap, making it attractive for some buyers willing to pay for rehabilitation. 
  • Depending on their size, dumps can accommodate community- or even utility-scale projects. 

Combine this with the growing number of local and state incentives available, and it makes sense why landfills have become part of the clean energy game plan. 

Potential Concerns 

Like any other prospective site, former landfills come with considerations affecting the project. 

Brownfields require special attention because of former pollution, hazardous waste, or other environmental concerns. Bulldozing everything in sight creates more problems than solutions, and developers must show restraint. 

Solar developers need to be careful around the cap.  

Grading the land is one of the first things developers do when they install a solar array. Unfortunately, grating and excavating to level land for the solar racking can damage the cap. If equipment damages the cap, contaminants and gas could escape into the air and water. 

To prevent unnecessary damage, stage heavy equipment away from the cap. If crews need to grade or excavate the area, do it carefully. And ALWAYS follow state and federal rules to avoid dangerous situations. 

Don’t penetrate the cap or damage the landfill’s mitigation system. 

The cap prevents methane and other gases from escaping outside specially controlled areas. Damage to the system could result in dangerous leaks that put the entire operation at risk. 

If an employee damages the mitigation, monitoring, piping, or other systems, it could result in dangerous gases escaping. The gas could then ignite if it encounters an accidental spark or arc. 

Dust poses a risk to workers and the community. 

Dust is simply part of the job during every solar installation but takes on a different tone at a landfill site. 

During grading and installation for a standard solar project, most crews use water trucks to moisten dirt and keep dust from flying around. The problem is that water trucks are heavy. 

Heavy water trucks and other equipment can damage underground gas and drainage systems. They should not drive on the cap if they don’t need to and be careful when required to be near fragile systems.  

Erosion and stormwater runoff are always a threat. 

Landfills have systems in place to remove water from a capped site. When rain or other liquid enters the landfill, these systems quickly flush it out to prevent damage. 

When crews grade and excavate sites, it opens the door for moisture to enter the system. Grading removes vegetation and dirt from the top of the cap, allowing water to penetrate. When that happens, it can flood landfill gas piping, preventing gas extraction. 

Hard rain can cause more cap erosion and slope instability, reducing the cap’s effectiveness. 

New Life for Old Sites 

Thanks to their location and design, landfills have become an attractive choice for solar companies. 

Beyond generating low-cost electricity on redeveloped land, landfill solar farms create a host of other benefits, including: 

  • High-paying jobs in a rapidly expanding solar industry 
  • Increase tax revenue for communities where solar farms live. Solar companies reintroduce vacant or abandoned properties to the tax roll. 
  • Fewer brownfields. When companies clean up and redevelop sites, they remove many (but not all) contaminants from the location. 

As solar energy expands across the U.S., more landfills will inevitably become solar sites. For solar EPCs, utilities, and innovative companies, there are plenty of opportunities to take advantage of ongoing development programs.  

These programs streamline the solar process, especially in states embracing renewable energy across the Northeast and mid-Atlantic. Other programs may be available on a state-by-state basis but could require more research. 

Are you interested in brownfield redevelopment? Programs like the RE-Powering America’s Land Initiative are changing the landscape, but it’s a long-term effort requiring time, money, and work. 

Talk with your state’s environmental representatives or contact your regional EPA office to learn more.

What Happens When the U.S. Solar Moratorium Ends?

Posted on by Mike Zimm

When the Biden administration implemented a tariff moratorium in June 2022 on solar panels and other products, the goal was to encourage more solar development while domestic producers and manufacturers could catch up.  

Fast forward nearly two years later, and the moratorium is about to expire. While some companies and industries have prepared for this day, others have been feverishly looking for alternatives. But with only a couple of months to go before new tariffs kick in, what can we expect to happen? 

The biggest questions we currently face are related to ongoing solar development. What will happen to current projects relying on foreign solar panels? Who stands to benefit most from reimplementing tariffs, and who could lose? How will disruptions like this impact our renewable energy goals?

How We Got Here 

The U.S. solar industry has been growing for years, mainly because of low-cost solar panels from China, but their relationship has had its difficulties. 

In 2012, the United States placed anti-dumping duties on Chinese photovoltaic (PV) panels containing crystalline silicon. Anti-dumping duties are a defense mechanism governments use to protect domestic producers from below-fair-market value products imported from overseas. 

Chinese manufacturers soon began moving their solar operations to Taiwan to avoid the tariffs. Not long after, in 2015, the U.S. expanded its duties to include Taiwan, too. 

By early 2022, the situation had bubbled into a full-blown problem. The U.S. Department of Commerce began investigating possible tariff circumvention by China through four additional countries, including Malaysia, Vietnam, Thailand, and Cambodia.  

One year later, the Commerce Department confirmed five companies out of eight investigated had circumvented anti-dumping duties. Other companies not under investigation at the time were also found to be skirting the tariffs.

So, Why Did We Issue a Moratorium? 

There has clearly been some bad blood brewing between the U.S. and China. But why did the U.S. issue a moratorium on solar panels, racking, and other components from Malaysia, Vietnam, Thailand, and Cambodia? 

Long story short – it had to. Thanks to the moratorium, solar projects could continue without delays. It also allowed the industry to keep growing while domestic production ramped up.  

The government also had time to investigate the circumvention allegations without handcuffing the solar industry during a vulnerable time.

The Sun is Shining for Solar. Why? 

By all accounts, 2023 was a fantastic year for solar generation. 

In 2023, the U.S. added more than 30 GWdc of solar power to the grid, accounting for more than half of all new electricity. But more solar power means more than just more electricity.  

Solar Energy Industries Association (SEIA) president and CEO Abigail Ross Hopper says solar energy generates tons of money through investments and jobs. 

“Nearly half of all solar capacity on the grid today has been installed in the last three years, generating over $120 billion of private investment and thousands of jobs across all 50 states,” Hopper explained. 

But a lot of importing had to happen to get to this point. In the first quarter to the third quarter of 2023, the United States imported about 40.6 GWdc of PV modules. In most cases, the panels were exempt from Section 201 duties, which protect domestic industries from import threats. 

Looking Ahead 

The SEIA forecasts another strong year for solar in 2024, though it will likely be less impressive than last year’s growth.  

Experts predict double-digit increases for commercial, community, and utility-scale solar this year, but residential install rates may slow. The organization attributes the potential slowdown to higher interest rates keeping homeowners on the sidelines until conditions improve.

  • Commercial – 19%  
  • Community – 15%  
  • Utility – 26%  
  • Residential – (13%) 

The states leading the charge are also the ones you would expect, with a couple of surprises. Texas, California, and Florida are sunny states with plenty of room for solar arrays. Colorado and Ohio, two surprising states making strides, are leveraging clean energy initiatives and solar-adjacent industries, respectively, to add renewable energy to the grid.

Solar Expansion Isn’t All Because of the Moratorium 

The moratorium affected the U.S. solar industry, but was it as significant as some may believe? 

It stabilized short-term supply chains for solar companies and allowed domestic producers to increase production. A steady supply of low-cost solar panels from Asia kept U.S. solar projects on time while preventing delays and cancellations that could have set the industry back. 

But the moratorium was only one piece of the solar puzzle. 

Price is generally an issue for new and emerging technology but is less problematic as it ages and improves. Solar panels are a prime example of this idea in action. Module prices have fallen 99.8% since 1976, including an astounding 15% per year between 2010 and 2020. 

Solar technology is getting better and more affordable every year, opening the door for mass adoption. 

But what good are solar arrays if communities and utilities have issues storing the vast amount of electricity produced? Utilities use fossil fuels when renewable energy sources like solar and wind are not generating enough power. As we move away from fossil fuels for renewable options, the need for battery storage becomes more critical. 

Battery storage costs have fallen at nearly the same pace as solar panels, slipping 85% over the course of a decade. Installing batteries to store electricity is becoming a more cost-effective solution for temporary increases in energy production.

Leaning Into Solar 

The hard costs of solar have long been a barrier to entry for solar companies, utilities, and homeowners. Luckily, the tide is turning and opening the door for more Americans, including those in smaller rural communities, to participate in low-cost electrical production. 

Hard costs have fallen steadily as technology, supply chains, and, most importantly, availability improve. At the same time, panel efficiency and battery storage are hitting record highs and showing no signs of slowing down. 

Unfortunately, unpredictable solar soft costs are a thorn in the side of utilities, companies, and community-scale solar projects. These costs are often difficult to gauge because different states have different permitting processes. Some states are also more solar-friendly than others.

Attractive Tax Incentives 

How does the government encourage more domestic manufacturing and renewable energy adoption in the U.S.? 

It all starts with making the right investments. 

Federal ITC (Investment Tax Credit) and PTC (Production Tax Credit) adders are an attractive incentive for solar companies and utilities. ITCs reduce upfront costs, making solar projects more affordable and helping generate profits faster. PTCs are more long-term incentives to encourage larger projects to help more consumers. 

Individual states, like Rhode Island, California, New York, Texas, and Florida, have many policies and incentives to spur solar projects. These can range from tax credits or deferrals to renewable energy certificates. Each incentive drives down investment costs while creating low-cost energy for consumers. 

Federal and state programs work together to promote cleaner sources of energy that generate electricity for consumers without raising electric bills. Consumers also have a say in renewable energy, opting for cleaner community-based options with fewer environmental impacts.

What Happens When the Moratorium Ends? 

June is quickly approaching, and with it comes the end of the solar panel moratorium. What happens after that is somewhat of a mystery. 

Prices will likely rise as the tariffs tack on more import taxes. Meanwhile, domestic production of photovoltaic cells, panels, and other solar system parts is starting to take off.  

There are currently 16 solar manufacturers in the U.S., including First Solar, the largest utility and community solar producer. The increase in domestic production has also brought in several large-scale international players, including QCells, whose solar panels are a leader in the residential market. 

The Supply Chain Could Hiccup 

The solar panel supply chain will not fall apart, but it could face strain caused by companies looking for other options. 

Why would companies look for other options if there isn’t a shortage of overseas panels? The panels may still be more cost-effective than U.S.-made ones, but tariffs, duties, and other taxes can drastically affect the cost of those PV products. 

Companies are always looking for more cost-effective solutions to bolster the bottom line. If doing business with Asia is too expensive, solar installers may consider using manufacturers in other countries. However, it takes time to set up new sources, which could add time to shipping and create delays. 

Domestic production would likely reduce supply chain delays eventually, but the products are more expensive. Companies also don’t have enough supply to address total demand – but that will change as more manufacturers come online. 

Although higher domestic prices seem similar to overseas tariffs, the shorter domestic supply chain reduces potential delays.

Short-term Struggles Lead to Long-Term Progress 

Ending the moratorium doesn’t mean U.S. solar companies will lose access to overseas solar panels and other products. 

If anything, it allows the U.S. to compete on a level playing field with other major exporters. Solar growth may slow in 2024 and even into 2025, but it will not be a death knell. Domestic manufacturing is rising, and the benefits far outweigh the perceived negatives. 

The United States has a lot riding on its renewable energy programs, including solar and wind. Developing and bolstering manufacturing tied to those industries helps us one day produce electricity without relying on traditional fossil fuels. It also opens the door for us to export our own products to other countries. 

We have a unique opportunity to address electrical grid reliability while reducing greenhouse gases. As with anything, it will take time, investment, and labor, but the country is making strides toward a cleaner future.

Who Manages the U.S. Electrical Grid?

Posted on by Mike Zimm

Each day, more than 160 million customers across the United States rely on electricity flowing through hundreds of thousands of miles of transmission and distribution power lines to power their homes, cook food, and heat water. 

Americans use a lot of power – millions of MWh of electricity daily. So many people depend on consistent and reliable electricity to live, and ensuring power is available when it’s needed most is a monumental task. But who is responsible for the grid itself? 

The answer is complicated. 

How is the Electrical Grid Divided? 

The continental United States is huge, so it makes sense to break it up into regions. 

Three major interconnections comprise the U.S. electrical grid – the Eastern Interconnection, which encompasses everything east of the Rockies; the Western Interconnection, covering west of the Rockies; and the Texas Interconnection, which includes most, but not all, of Texas. 

The Eastern and Western Interconnections stretch north into Canada, except for Quebec, which operates its own AC power grid that connects to the Eastern Interconnection. 

From Interconnections to Councils… 

Within the three U.S. interconnection systems are six regional councils called Electric Reliability Organizations. These non-profit companies work on behalf of their regions to provide stable electricity to consumers and uphold NERC standards. They include: 

  • Northeast Power Coordinating Council (NPCC)  
  • Reliability First (RF) 
  • Midwest Reliability Organization (MRO) 
  • SERC Reliability Corporation (SERC)  
  • Texas Reliability Entity (TRE)  
  • Western Electricity Coordinating Council (WECC)  

The councils are managed and approved by the Federal Energy Regulatory Commission (FERC), with responsibilities delegated by the North American Electric Reliability Corporation (NERC). Together, the regional councils and NERC maintain and improve the grid across their respective zones. 

Often, it means sharing information and resources across all the councils and NERC, known as the ERO Enterprise. They develop messaging and guidance for utilities and other entities and innovate the grid’s performance without duplicating efforts. 

Subregions and Other Markets 

Some customers may be living in one of several subregions or coverage areas. 

For example, people in New York live in a Wholesale Electric Power Market, in this case, NYISO. NYISO stands for the New York Independent System Operator and maintains a steady and reliable power supply for the state’s electrical customers. It also regulates New York’s competitive generation program. 

Other coverage areas may include traditionally regulated or competitive retail markets. Depending on the state, it could impact how and what energy options are available. In traditionally regulated states, customers must buy electricity from local utilities serving their area. As a result, selection is limited. 

For states with competitive markets, customers have several suppliers, opening the door for more competition and options, including retail choice. Retail choice allows customers to choose who provides their electricity and even how it is produced. Solar installers may find these states easier to build and work in, especially since many solar and other renewable projects in traditionally regulated states tend to be utility-owned. 

FERC, NERC, and the Chain of Command 

It might seem confusing with so many federal agencies, commissions, organizations, and oversight committees floating around, but the chain of command is clear. 

FERC is tasked with managing electricity transmission of all types, including gas pipelines and hydropower sources. Every energy production source, transmission line, and distribution substation falls under its purview. But it can’t monitor thousands of generation plants without help. 

Through the Federal Power Act, FERC assigned NERC the responsibility of implementing and monitoring standards and regulations across every region. In turn, NERC delegates power to the six regional transmission organizations (RTOs). The RTOs work to identify areas of opportunity, improve efficiency, ensure compliance, and maintain the overall system alongside utilities. 

Independent System Operators (ISOs) also handle grid operations, though they are smaller than their regional counterparts. Unlike RTOs, which can cover a multi-state region, ISOs have smaller footprints, generally contained in one state. Both maintain fair competition in their areas and make sure power suppliers have access to the electrical grid, including solar energy generators. According to the Environmental Protection Agency (EPA), about two-thirds of electricity customers live in areas managed by an RTO or ISO. 

States Get Their Say, Too 

Just when there might be enough electricity generation oversight, the states jump in to take on some of the load. 

Public utility commissions regulate pricing in real-time and have the authority to determine where new power generators and transmission systems go. These organizations also have the power to raise and lower electricity, gas, and water rates. PUCs manage costs and quality and maintain the system for all customers, but doesn’t extend to municipal and cooperative utilities.  

States also have a fair amount of say in their electricity systems. California, New York, and Texas have been on the frontlines, developing clean energy plans to grow renewable energy sources in their states. They’ve also been instrumental in establishing and promoting reliability and efficiency campaigns to reduce reliance on fossil fuels like coal and oil. 

Utilities Are the Backbone of the Whole System 

Regulators are great for the public and the electrical grid but don’t produce the energy needed to power our daily lives. That distinction falls on the thousands of electric utilities and public power companies dotting the United States. 

Utilities like Duke, Exelon, and Pacific Gas and Electric can be private or public companies, and their goal is to generate electricity and deliver it as profitably as possible to end users. They’re often the boots on the ground, repairing, maintaining, and expanding the infrastructure while finding innovative ways to produce electricity and increase generating capacity. 

Who Enforces Rules and Regulations? 

It might seem like a twisted web of alphabet-soup agencies and committees, but everything flows from the top down. 

FERC is the federal agency in charge of developing and enforcing its rules and investigating internal and external complaints to determine what actions to take. When complaints come in, FERC is tasked with collecting facts tied to the event, issuing preliminary conclusions, and settling the matter with the offending organization or going to a civil trial if a settlement doesn’t happen. 

Typically, the agency aims to settle rule violations through the settlement process to quickly issue refunds, address concerns, and reallocate its employees to other pressing tasks. When the violations are especially severe, FERC can issue civil penalty fines, subject the utility to compliance monitoring and disgorgements, or other penalties. 

According to the agency, more than $861 million in civil penalties were issued from 2007 to 2022, along with another $586 million in disgorgements. 

Additional Monitoring Support 

Beyond FERC, there are plenty of support agencies to monitor and enforce its regulations, including NERC, the RTOs and ISOs in each region or state, and state-level public utility commissions. 

Like FERC, NERC has a team to monitor complaints, perform investigations, and issue fines or other penalties. It can also elevate concerns to FERC if it has to. The RTOs and ISOs are another set of eyes and ears, using their reach to monitor the markets for violations. When concerns are found, they can refer them to FERC to investigate. 

Further down the chain of command, state public utility commissions can investigate and enforce FERC powers when utilities and entities violate siting, construction, or pricing regulations. 

Finally, the Department of Justice can step in when violations stretch beyond civil penalties and are considered criminal. Cases where the DOJ might get involved include fraud, among other high-level crimes. 

Many Hands Make Light Work 

Millions of people rely on consistent electricity to live their daily lives, so the system has to work well for everyone. From the highest federal levels down to the local power company, every organization is on the same page and follows the same rules. 

FERC’s oversight and supporting agencies and committees ensure the lights stay on and prices remain manageable. The entire chain of command has overlapping structures meant to keep a watchful eye on utilities and other entities without stressing out organizations with a mountain of investigations. 

The result is a powerful series of checks and balances helping us power our future today, tomorrow, and for years to come.

Can Solar Energy Improve Microgrid Performance?

Posted on by Mike Zimm

In 2003, a summer blackout caused by a severe storm cut power for more than 50 million people across eight U.S. states and parts of Canada. 

Since then, the country has invested millions of dollars into resilience projects, ranging from hardening the electrical grid to moving transmission cables underground. It’s also given rise to the concept of the microgrid. 

As companies, communities, and utilities inch closer toward renewable forms of energy, microgrids are becoming more popular. But what is a microgrid, and how does the rise of solar and other renewable sources impact their expansion? More importantly, can independent energy grids improve electrical delivery for the millions of people relying on it? 

Microgrids Explained 

If you’re unfamiliar with the term, a microgrid is a localized energy producer and provider connected to the larger power grid. It generates electricity to power communities, companies, and critical infrastructure and immediately disconnects from the larger grid to operate as a standalone power source during an emergency. 

There are hundreds of these systems across the United States. According to the Department of Energy (DOE), there are 461 operational microgrids established across the country, powering everything from hospitals and universities to emergency shelters, research facilities, and military installations. 

Other organizations are even more optimistic about the standalone grid’s adoption. The Center for Climate and Energy Solutions suggests nearly 700 operational microgrids are in the U.S., totaling 4.4 GW of electrical power. Meanwhile, Wood Mackenzie has said solar and storage capacity grew 47% from 2017 to 2022. 

Why They Work 

Microgrids work because they generate and distribute electricity to the surrounding community. Their size also makes them less vulnerable to widespread blackouts. 

When large-scale outages occur, microgrids disconnect and enter standalone mode. Disconnecting from the grid lets the system deliver power while crews work on the larger grid. 

Microgrids may have a home in combined heat and power (CHP) situations, too. CHP systems use one fuel source to produce electricity and heat for a building or group of buildings. Although they tend to be small systems powering a small area, larger ones can become microgrids once connected to the larger delivery system. 

Are Microgrids Solely Solar? 

Although they’re generally powered by renewable electricity generation systems like solar panels and wind turbines, fossil fuel generators can also power microgrids. 

Beyond being inexpensive to maintain, solar microgrids tend to be set-it-and-forget-it options. When the system has an autonomous operation system, it can produce consistent and clean energy for years with minimal manual control. 

Is Solar Power Generation Changing the Game? 

Photovoltaic (PV) microgrids are coming online across the United States, but are they making a difference? 

The short answer to the question is yes for several reasons. 

Clean, Low-Cost Power 

One of the major selling points of a solar-powered microgrid is that the electricity produced generates no harmful byproducts. Sunlight and wind are wholly renewable energy sources, reducing carbon footprints while maintaining energy production. 

It’s Scalable 

When communities or businesses want to increase the amount of energy, all they have to do is install additional panels and connect them to the system. 

Beyond that, it’s possible to increase solar efficiency (and power generated) by installing solar concentrators, sun tracking systems, and anti-reflection coatings. 

Low Operating Costs 

Solar costs have dropped dramatically over the years, making installing solar panels as affordable as ever. Unfortunately, the soft costs of solar haven’t seen the same decline but are improving. 

Though solar installations are still expensive for community and utility-scale projects, maintenance costs are low. 

Combines with Other Energy Sources 

Microgrids complement CHP systems, allowing them to make the most out of alternative fuel sources to produce additional electricity for storage or adding to the grid. 

Typically, CHPs use a singular fuel source like natural gas to efficiently generate power and heat without wasting heat energy. Adding rooftop or on-site solar panels creates more energy, reducing strain and fuel use for the CHP system. 

Another Step Toward a Revitalized Grid 

Microgrids can reduce strain on the overall electrical grid. 

As smaller operations come online, improvements must be made to the grid to improve its resiliency and accommodate the additional load. They also take some pressure off other power plants by reducing the amount of power they need to generate. In the case of demand spikes, those generation plants can quickly increase electrical output. 

Another occasionally overlooked benefit of microgrids is their ability to deliver electricity more efficiently than other power plants. Typically, power generation plants are found in remote areas away from cities and towns, resulting in line losses as electricity flows from the plant to substations. Microgrids avoid most line losses because they are much closer to distribution areas. Less distance means less power loss during delivery. 

Problems to Solve 

Although there’s a lot to love about smaller, independent grids, there are still some kinks in the system. 

Microgrids naturally make the electrical grid more complex because we’re adding new systems to an aging infrastructure. Upgrades are necessary to keep everything operating smoothly, but new interconnections come at a massive cost for installers and utilities. 

There is also the risk of utilities seeing microgrids as competition, seeing as how the smaller systems could reduce demand. To minimize difficulties with utilities, installers can build mutually beneficial partnerships to find common ground and solutions. 

Small Footprint, Huge Difference 

The evidence is clear; as the grid becomes more complex, microgrids will step up to offer reliable, consistent power to homes and businesses nationwide. 

Organizations like the NREL have invested in new grid technology and development for more than two decades, and the U.S. military is utilizing microgrids for both sustainability and self-defense. Additionally, smaller communities find community-scale solar installations a low-cost solution to rising energy costs through subscription and ownership stake plans. 

We have so much to be excited about, but everything is still a work in progress. Regulations are hard to navigate, and there isn’t a standard set of rules guiding microgrid installers or the utilities they work with. Installers also have to contend with high interconnection costs as utilities decide how to compensate communities and customers for adding electricity to the grid. 

Threats to the grid aren’t slowing down, making it vital for the U.S. to have a robust grid to supply power to everyone. Microgrids could be the answer to increasing reliability and safeguarding against future power outages, threats and attacks.

What is Community-Scale Solar?

Posted on by Mike Zimm

When most people think about solar installations, two types generally come to mind: rooftop and utility-scale. 

Rooftop or backyard residential PV solar panels provide enough electricity to power a home or small business. Meanwhile, utility-scale operations are designed to power towns, cities, and even regions. 

But there’s a third option emerging in the U.S.: community-scale solar. Larger than residential but smaller than utility-scale, community-scale installations range from a few megawatts to tens and power communities. 

Small Footprint, Large Impact 

True to its name, community solar projects are small, usually less than 5MW, but can generate enough electricity to power thousands of homes. 

Unlike utility-scale solar locations, which utilities develop on owned land, community solar farms live on leased land and get installed by EPC (Engineering, Procurement, and Construction) solar companies like Schuler-Haas, Nexamp, and TerraForm. Once complete, residents and businesses can subscribe to the site and receive credits. 

Smaller solar arrays are picking up steam in several states, including New York, California, Minnesota, and Massachusetts, but can be found in more than 40 states, Washington D.C., and Puerto Rico. Although solar installations were down 16% in Q2 2023 compared to 2022, about 226 MWdc of solar was added to the grid.  

The good news is the Solar Energy Industries Association (SEIA) expects growth from 2024 through 2028, thanks to better policies and more interest. 

How Does Community Solar Work? 

Community-scale solar is unique in size and operation, making it viable for people who can’t fully invest in solar but want to participate. 

Unlike installations owned by a single person, business, or utility company, community solar projects benefit groups of businesses and individuals throughout the service area. They can either pay to own a portion or subscribe to a community solar installation, allowing them to collect solar credits on their electricity bills. 

But what are solar credits, and how do they work? As the solar array generates electrical power, subscribers and owners collect credits based on the electricity produced. Those credits are then applied to their utility bills. 

According to the NREL, about 49% of households and businesses can’t have rooftop solar. For those who can’t afford a residential PV system or don’t have the right conditions to support one, community solar is an option. 

Even better, the energy produced by community solar goes straight from the array to the grid and is delivered directly to those living nearby. 

Is Community Solar Worth It? 

With all the talk of subscriptions and credits, community solar sounds complicated, but it’s a popular choice for consumers and builders for several reasons. 

  • Accessibility: Community solar allows people to invest and benefit from solar installations with a low-risk investment. They still reap the rewards of solar power without the massive upfront purchase to install panels. 
  • Cost savings: Community solar is a low-cost electricity producer compared to traditional fossil fuels. 
  • Supports the local community: Solar installations create jobs and can support sustained regional economic growth. 
  • Varies energy sources: Renewables can support traditional fossil fuels during periods of high demand. They can also help supply power in the case of an emergency when fossil fuel sources are offline. Solar arrays also help develop microgrids, which limit the spread of blackouts if a problem arises. 
  • Cleaner energy: Solar panels produce no by-products, and the sun is an infinite fuel source. Energy storage and consistent production are still troublesome, but the technology needed to address and mitigate those problems is quickly evolving. 

Of course, not everything is perfect. Every investment, including community solar, has inherent risks. 

Drawbacks and Concerns 

Despite renewable energy projects earning the praise of agencies, organizations, and the public, every emerging technology has its fair share of challenges. It’s especially true when attempting to integrate them into older installations. 

  • Interconnection Issues: According to a 2022 White House statement, about 70% of U.S. transmission lines are 25 years old or older, with many pieces coming online in the 1960s and 1970s. Unfortunately, that makes it harder for solar installations to integrate. In those situations, the difficulty of integrating leads to expensive delays, long waiting lists, and high connection fees to cover costs. 
  • Overpowering the system: Substations are designed to handle occasional overcharges or power surges, but not constantly. When a massive influx of electricity is added to the grid too quickly, it can lead to outages and damage. 
  • Location issues: In rural communities, solar installations may be miles from load centers. Getting power to the load center for distribution means more money, time, and labor is needed. These costs ultimately lead to a higher project cost and delayed ROI. 
  • Storage Issues: Solar energy is infinitely renewable but hard to store. Effective battery solutions are available but are expensive, and the technology hasn’t reached its full potential yet. Storage also becomes an issue in places where the sun isn’t shining every day and locations where snow is an issue. 

As technology improves and more utilities invest in renewable technology, it will become easier to interconnect with the larger grid. In the meantime, smaller installations can create microgrids that connect to the larger grid but reduce the effects of an outage in their communities. 

What is the Growth Potential? 

Thanks to several pieces of federal legislation, solar and other renewable energy sources are having a coming out party. 

Solar has accounted for about 45% of all new electricity-generating capacity added to the electrical grid this year, including 226 MWdc of community solar in Q2 2023. The good news doesn’t end there, as experts claim more advancements are coming. 

Global research organization Wood Mackenzie recently touted the strength of community solar, suggesting the industry could grow nearly 120% through 2027. The report also notes that the country could add another 6 GW of electricity to the grid by then. Currently, about 5.27 GW has been installed. 

Several states are leading community solar solutions, including New York, which hosts about half of the U.S.’s installed total. However, new laws, including the Inflation Reduction Act (IRA), have put solar in a much stronger position in the coming years. 

The IRA coincides with a 24-month moratorium issued by the White House on solar panels from four Asian countries: Thailand, Vietnam, Malaysia, and Cambodia. The moratorium expires in June 2024 and is designed to help get domestic solar production off the ground while giving companies and utilities access to lower-cost solar panels to complete ongoing projects. 

Domestic production is expected to improve for balance of system products like PV wire, panels, and racking materials, and organizations like Wood Mackenzie and the SEIA are confident the industry will flourish. 

High Potential, Low Cost of Entry

There are plenty of tax credits and incentives to get people involved with residential solar, but barriers to entry are still high. Options like community solar reduce investment costs while helping people do something good for the community, the environment, and their wallets. 

It also comes in handy for people living in low-income and rural areas, where credits can impact how much they pay for the electricity they consume. Rural locations also tend to have more space for solar installations, shortening the distance from the array to a load center. 

The benefits of community solar are undeniable, but there are still hurdles. Our electrical grid is rapidly aging, making it difficult to efficiently interconnect with existing substations and other infrastructure. If the substations and grid technology are too old, it will be harder to integrate efficiently. 

We’re getting closer to a world run by renewables. More advancements mean more opportunities for good-paying jobs, low-cost electricity, and better resilience in the face of storms and other emergencies. It will take time, but a renewable-powered future is possible.

How Do Solar Investment Tax Credit Adders Work?

Posted on by Mike Zimm

When it comes to the government, there’s no such thing as a simple, straightforward solution. 

Unfortunately, for developers, financiers, and engineering, procurement, and construction companies, known as EPCs, that means knowing when, how, and where projects qualify for federal solar tax credits. Without them, it’s harder to complete jobs quickly and effectively. 

When the Inflation Reduction Act of 2022 was signed into law, it opened the door for a massive uptick in tax credits for solar. However, not everyone qualifies for all the tax credits, and plenty of intricate rules must be followed to receive them. 

Projects can qualify for ITC solar credits up to 60%, with adders tied to domestic materials and products, location, and low-income communities. 

But what projects qualify for federal funding? 

What is the Base ITC Credit? 

When the Inflation Reduction Act was signed into law, it extended the shelf life of the Investment Tax Credit (ITC) for solar installations and increased its value. 

From now until 2032, solar credits for projects are 30% and apply to businesses and homeowners. After 2032, the credit decreases until it’s finally sunset. For utility-scale solar projects larger than 1MW, the tax credit is 6% but rises to 30% if several criteria are met.  

But what are the criteria, you ask? 

For starters, a project qualifies for the 30% credit if workers are paid prevailing wages. The project also requires a certain number of apprentices to perform the work. There are also rules for apprentice-to-journeyman worker ratios, as outlined by the Department of Labor. 

Accessing the 10% ITC Adder 

Qualifying for the 10% domestic production adder requires projects to satisfy three criteria: 

  • Must be in the United States or an associated territory  
  • Must use new or like new equipment (cannot exceed a certain threshold of used parts)  
  • Cannot be leased to a tax-except entity  

The first 10% Investment Tax Credit available is the domestic content adder. As the name implies, projects must use a certain percentage of U.S.-produced materials to qualify. In the case of steel and iron, 100% of those materials must be U.S.-made as outlined by American Iron and Steel (AIS) rules, meaning everything from sourcing to final finishing has to take place in the United States. 

With that said, the domestic content adder does not apply to subcomponents used for the project, including nuts, bolts, washers, etc. 

Meeting the Project Threshold 

As with any federal funding project, businesses must meet certain criteria before accessing the federal tax credit. 

For the 10% ITC adder, manufactured products must comprise at least 40% of the total project cost. Over time, the threshold will rise, meaning more domestic products are needed to receive funding. 

Offshore wind projects will follow a similar rising threshold schedule, but only 20% of the total cost-adjusted percentage needs to be tied to U.S. manufactured products for now. 

The percentages increase over time, as seen in the table below. 

Year Domestic Product Threshold – Solar Domestic Product Threshold – Offshore Wind 
Before 2025 40% 20% 
2025 45% 27.5% 
2026 50% 35% 
2027 55% 45% 

The threshold for offshore wind will eventually reach 55% after 2027 to match solar projects.

Of course, the rules aren’t as black-and-white as one would hope, and there are breakdowns for how products are classified as domestic or foreign-made. 

For example, only components mined or made in the U.S. count toward the total adjusted content rule. Let’s say you’re using a widget made with three components – two are domestically made, but the third was manufactured overseas. Although the widget was U.S.-made, you only get credit for the two domestically produced components. 

The cost of the foreign-made component would be subtracted from the total cost of the widget, leaving you with the cost of the U.S.-made parts. Whatever that percentage is counts toward the total cost. 

It’s a lot to manage, but the rule is simple: If a component, product, or material is made in the U.S., it counts! But besides the domestic manufacturing component associated with the adder, projects also need to meet one of several conditions, including: 

  • The project has an installed capacity of less than 1MW AC  
  • Construction began before Jan. 29, 2023  
  • It meets prevailing wage and apprenticeship requirements  

Projects meeting one of these conditions are eligible for the 10% credit. 

Concerns About the Threshold 

One common concern from solar EPCs is the difficulty of hitting the domestic product threshold due to a lack of U.S.-based manufacturers for solar products. 

Solar companies have had trouble getting ahold of critical solar power system parts, including solar panels, inverters, BOS components, and racking materials. As the threshold rises, some installers fear the 10% ITC will be too difficult to reach. 

In 2022, the government issued a moratorium on solar tariffs, opening the door for cheaper panels and parts from Asian countries. Though it brings an influx of cheap parts to help installers catch up on delayed projects, they also jeopardize the chances of their solar energy system receiving the renewable energy tax credit. 

Ramping Up Domestic Production 

The moratorium was offered, in part, to keep solar projects moving while domestic manufacturers got up to speed.  

While increased federal support is a boon for companies trying to take market share from foreign competitors, the investment is a long-term strategy that leaves current problems unsolved. 

First Solar is the major solar panel producer in the U.S., but the company does not have the size to meet current demand. Other solar manufacturers include, but are not limited to, Heliene, Mission Solar, JinkoSolar, SunPower, Silfab Solar, and Hanwha Qcells, which all produce different parts of the BOS, but have also struggled to meet U.S. demand in recent years. 

However, several brands, including Qcells, have announced expansion plans in the coming years to support increased demand. For example, Qcells’ expansion in Georgia will add 2,500 jobs and double production at the facility by 2024. 

Other Available Solar Project Credits 

It might seem too good to be true, but the 30% ITC credit can rise as high as 60% in certain situations. 

Energy Community Bonus 

Solar projects can earn an additional 10% credit for building in a former energy community. What’s an energy community? It’s a location that is either a former brownfield site or a facility where coal, oil, or natural gas are mined or converted into energy. 

If the site isn’t a brownfield, the project could still qualify if it satisfies one of several other criteria, including: 

  • Either .17% direct employment OR at least 25% of local tax revenue from coal, oil, or natural gas production or storage AND an unemployment rate higher than the national average 
  • Housed a coal mine that closed after 1999 OR a coal electric plant retired after 2009 

Although many parts of the country qualify under at least one of these conditions, some sections don’t, including much of the Midwest. 

Keep in mind that energy communities should NOT be confused with low-income areas. 

Low-Income Bonus 

This 10% credit is awarded to solar projects that sell electricity to lower-income areas and is for solar installations smaller than 5MW. 

What’s interesting about this clean energy adder is that it has two tiers. Projects receive a 10% ITC if they’re located in a low-income community or on Native American land. If the installation is a qualified low-income residential building project, which, according to the Office of Energy Efficiency and Renewable Energy, requires “financial benefits of the solar facility must be allocated equitably between the residents,” it receives a 20% ITC. 

The Credits Are Complicated, But They Have to Be 

When the government gets involved, it typically comes with heaps of regulatory red tape, but the complexity of this program is vital for a few reasons. 

Tying an ITC or PTC to the program encourages solar companies to buy American-made products, bolstering the economy and decreasing reliance on foreign-made goods like solar panels, racking, and PV wire. 

Programs like this also help with nearshoring and reshoring manufacturing efforts. When domestic goods are prioritized, installers benefit from lower shipping costs, including tariffs and duties, since the material has a shorter shipping distance. 

With higher demand, companies can hire and support additional jobs in emerging industries. These careers often pay well and offer room for advancement, making it possible to make a living in a burgeoning market. It’s also important to consider where the jobs are going. Establishing companies and projects in economically depressed areas and locations where fossil fuel plants once stood keeps jobs in those communities and even adds new ones. 

Credits Keep Solar Moving 

The U.S. is moving toward a sustainable future, but can solar tax credits work? 

Solar is surging in the United States, not just because it produces low-cost energy for communities alongside hundreds of thousands of jobs. Installations can stabilize the electrical grid using new technology, keeping the lights on in homes. As the technology improves, solar could be a low-cost alternative to fossil fuels, reliably producing clean, renewable energy. 

Renewable energy still has a long way to go to become the primary power source for the U.S., but a monumental shift is possible with a clear focus on solutions.

Factory vs. Field-Made: Comparing Solar Connectors

Posted on by Mike Zimm

Utility-scale solar installations have a lot of fragile parts and pieces. Small issues can result in thousands of dollars’ worth of lost energy, system damage, or even a fire. 

According to HelioVolta’s SolarGrade PV Health Report, nearly 60% of solar installation issues were attributed to field-made connectors or wire management. Field-made connector issues alone attributed to one-third of all problems at solar sites. Within that segment, the percentage of critical and major issues attributed to field-made connectors was higher than any other damage type. 

It’s fair to say connectors are a concern, but it helps to know when and how the connectors were made. Field-made connectors are installed on-site by workers, compared to factory-made ones attached to PV wire during production.  

With that in mind, the blame then falls on either the connector or the worker who assembled it. 

With so much money and energy on the line, companies must reduce liability and increase their installations’ reliability. Could factory-made connectors improve overall production and dependability? 

The Difference Between Field and Factory-Made Solar Connectors 

Companies have two options for connectors for a utility-scale solar power array: factory-made connectors or field-made solar connectors. 

Factory-made connectors are installed onto the wire in a controlled environment. Performing the work in a manufacturing facility makes it easier to spot quality assurance (QA) and quality control (QC) issues so bad connectors aren’t sent out to the field. 

When PV wire connectors are made in the field, they’re assembled by solar installers. Typically, field-made connectors are used to ensure connectors aren’t cross-mated with other “compatible” parts. During this process, workers use certified pieces and tools supplied by a manufacturer and then do the work themselves. The important thing to remember here is that both the parts and the tools are certified, meaning installers should only use what was supplied to them by the manufacturer. 

Although several connector types exist on the market, some are more common than others. MC4 connectors, using a plug-and-socket method, are the current standard, and Swiss manufacturer Staubli is the original developer and manufacturer. Since the MC4’s inception, many other companies have started making their own compatible connectors, leading to a growing number of connector manufacturers and parts to choose from. 
 
The problem is although there is a certification process for the connectors, cross-mated parts aren’t usually tested together as a single unit. 

One Size Doesn’t Fit All 

There are several types of connectors used in solar operations, including the MC4, MC3 (phased out by MC4), and Amphenol Helios models, but you can’t always use one with another. 

While it might not seem like a big deal mixing and matching connectors across a solar site, HelioVolta noted in its SolarGrade report that pieces were either improperly installed or cross-mated in nearly 80% of field-made connector issues. 

As installers rush to catch up with delayed projects and set up new sites, the resulting time crunch opens the door for mistakes. The industry is also growing, leading to an influx of junior installers who may not have enough experience to perform the job well. 

What Does This Mean for Solar Sites? 

Connector issues set the stage for several problems. From water and moisture exposure, bad PV connector points, and damaged wires from bad crimps or other mistakes, every issue could open the door to a costly disaster. 

So, what happens when a PV system has connector issues? Quite a lot, actually: 

  • Lost power and outages – When connectors fail, the solar panel is no longer reliably connected to the Balance of System (BOS). When that happens, the system produces less energy. 
  • Ground faults or arcing – Ground faults and arcs occur when there isn’t good contact in the connector. Heat expands the parts over time, opening gaps and eventually creating an arc that can damage surrounding wires and materials. 
  • Fires – When fires break out, they can quickly cause millions of dollars in damage. Once the fire is out, crews need to replace damaged and charred parts, adding sunk time and labor costs to the total bill. 

Not every field-made connector is an inherent fire risk, but they may carry more risk than factory-made parts, according to HelioVolta’s data. 

Avoiding Connector Issues 

Limiting the number of fail points is critical when dealing with large utility-scale installations. 

Buying factory-made connectors addresses a crucial failure point, setting your solar energy project up for better long-term success. 

According to the SolarGrade PV Health Report, only 6% of issues at solar arrays were tied to factory-made connectors, much less than the 33% associated with their field-made counterparts. Manufacturer-made parts also reduce on-site critical and major problems, thanks to each manufacturer’s rigorous QC and QA programs. 

The Best Connector for the Wire 

Another benefit of factory-made connectors is that manufacturers can use compatible products with their wire and cable. The result is a more reliable connection, thanks to a standardized process retaining integrity across the board. 
 
Installers may rush or get stretched thin, limiting their attention, resulting in potentially loose or poor connections. Furthermore, unlike field-made connectors that may lack QA assurance from another worker in the field, most manufacturers have staff on hand to spot potential concerns before the wire leaves the factory. 

What Do Bad Connectors Look Like? 

No matter what type of connector is used, you should know what damage looks like. 

We recommend having crews inspect solar sites once every 6 months or so and check every connection point for common problems, including: 

  • Gaps 
  • Cross-threading 
  • Sun Damage 
  • Overheating 
  • Other connector or wire damage 

One of the easiest mistakes to make is using incompatible connectors. When connectors are cross-mated without checking for compatibility, it can put the solar installation at risk. Mismatched connections can generate a lot of heat, making them easy to spot with a temperature gauge. 

It’s also important to ensure every installer is trained to properly work on solar panels, cabling and other balance of system (BOS) pieces. 

Know What You’re Getting 

Simply put – buying factory-made connectors reduces risk. 

Manufacturers have strict quality control standards to prevent damaged or improperly assembled connectors from being shipped out to the field in the first place. If bad parts do get shipped, they can also work alongside customers to quickly correct mistakes before dangerous situations develop. 

Not all field-made connectors will have issues, and many will be fine. But when the goal is to limit risk and liability on your renewable energy project, factory-made connectors are the way to go.