You have a solar PV system, but what now? Where does the electricity you generate go?
A certain percentage will power the electrical loads in your building. Say the summer sun is shining and you sit at your computer in your home office while you have the AC running. Your solar PV system is likely to provide the electricity for your computer and your AC.
It is also likely that at times your system will produce more electricity than you use. Where does that electricity go?
There are two principle options:
- You can have an off-grid system, meaning you are not connected to the electrical grid and any excess electricity you produce would need to be stored in a battery system for later and night time use. Off-grid systems are used in remote areas where access to the electrical grid is difficult and/or costly.
- You can have a grid-tied system, meaning you are connected to the electrical grid and any excess electricity you produce is fed into the grid. A commonly used analogy is that the electrical grid acts like your battery.
Deep energy retrofits are likely to be in urban or suburban areas where access to the electrical grid is readily available and as such I will focus on grid-tied systems.
The process of connecting a solar PV system to the grid is called “interconnection.” It is typically regulated on a state basis. Here in Chicago we are in the ComEd service territory and ComEd explains interconnection as follows:
“An interconnection is an electric connection between a utility’s grid and a private generation system (PGS). A PGS, also known as Distributed Generation (DG), has the capability to send energy to the utility’s energy grid.”Source: ComEd – Connecting to the Grid
The interconnection process with ComEd involves an application and a fee. ComEd asks for customer and account information, solar contractor information, and technical details about the solar PV system. The good news is that you probably will not have to deal with the application as it is typical for your solar installer to submit the interconnection application on your behalf.
Once the application is processed, ComEd issues an approval letter, which typically comes in the form of an email. After that, the solar PV system can be turned on, which is literally flipping a switch at the inverter.
Depending on your location and the size of your solar PV system, ComEd may need to conduct upgrades to the grid to get it ready for interconnection, which potentially could add cost to your solar project. Any upgrades would happen prior to you receiving the approval letter.
Lisa Albrecht, from All Bright Solar had the following comment when I contacted her about interconnection in Illinois:
“Currently, most ComEd interconnection applications are approved but as solar continues to grow, it is possible that the local grid may not be able to accommodate additional solar generators backfeeding into the grid. Early adopters will have the advantage of easier approvals. If you experience issues, be sure to have your installer reach out to the Illinois Solar Energy Association for input as they track these types of issues and may be able to assist if this becomes a growing problem.”
If you are not in Illinois, or have an electricity provider other than ComEd, check your local information about interconnection, as it may differ from what has been described above.
So, are we done with applications and paperwork? Not quite yet. Because we still have to figure out how you get credited for any excess electricity you feed back into the grid.
Let me build on the example from above: During the months when the summer sun is shining, it is possible that your solar PV system will generate more electricity than you use. And during the winter months, you probably will use more electricity than your solar system generates.
The process of net metering provides the framework on how you and your electricity provider (ComEd in our case) account for the summer surplus and with winter deficits. net metering also involves an application, but again, it is likely that your solar installer will submit the paperwork on your behalf.
Before I go any further, let me note that net metering varies state by state. If you are outside of Illinois, check the net metering agreements for your location or with your local utility, because it may differ from what I describe here.
In Illinois, we have a deregulated energy market. I asked Lisa Albrecht about what impact that has on net metering. She offered the following:
“In a deregulated energy market, net metering falls to the supplier – the company you contract with monthly. So that could be any number of companies – MC2, Green Mountain Power, Constellation, ComEd, etc. Although all Illinois suppliers are required by law to offer net metering programs, many do not comply. It may be easiest to go with ComEd whose policies are clearly outlined. Any time a solar owner changes suppliers they will need to apply for net metering with the new company and will forego any accumulated credits.”
I will explain those accumulated credits below.
The smart meter
For net metering to work, we need to measure two variables:
- Energy flow from the electrical grid into your home
- Energy flow from your solar PV system into the grid
This required two electrical meters in the old days. But with the dawn of smart meters, things got simpler. A smart meter has two channels. Channel A measures the energy flow FROM the grid. Channel B measures the flow of energy TO the grid.
That covers the hardware requirements. Now let’s take a closer look at how net metering is administered in Illinois under the umbrella of ComEd:
“Net metering will provide customers credits for the excess generated energy that flows onto the distribution system according to the terms of ComEd’s net metering tariff…”
“When you have a solar system and are being billed for net metering, you are charged only for the net amount of energy you use during each billing period (i.e., the amount of energy we deliver to you minus the excess amount you send back to the smart grid). And, if you send more energy to the grid than we deliver, you can receive credits on your bill.”Source: ComEd – Net metering
The electricity bill
Let’s take a look on how this would manifest itself on your electricity bill.
If your solar PV system generated more electricity than you consumed, you end up paying $0 in supply charges (the actual electricity).
But you are still responsible for Customer and Meter Charges, the two fixed charges under Delivery. And these don’t go away because you are still connected to and benefit from the electrical grid.
The remaining variable charges under Delivery and Taxes & Fees are based on kWh. If your solar PV system generated more electricity than you consumed, your net metering credits cancel out those variable charges.
The solar year
Let’s assume your system is sized to cover your cumulative electrical needs for twelve months as described in the previous post.
When your system generates more power in the summer months than you need, your bill will reflect a “rollover” credit in kWh that is carried forward to the next month. You can continue to accumulate rollovers each month for your excess generation.
These accrued rollover credits become very useful during the winter months, when your electrical consumption exceeds your solar production. At that point you start drawing down on your rollover credits. And ideally, the accumulated rollover credits will last you all winter.
Even if they don’t, i.e. your solar PV system size is not big enough to cover your annual electricity needs, you still end up paying less than without a solar PV system.
Energy credits can be carried over from month to month but not from year to year. ComEd’s policy has a reset in either April or October and most select April to end their “solar year.” The selection to whether the solar year is reset in April or October is made on the net metering application.
For more information on net metering from ComEd, see also:
Before we get too excited, let me point out that there is a limit to the size of your solar PV system if you intend to qualify for net metering and receive a one-to-one retail rate credit for the electricity you feed back into the grid:
“Solar energy systems of customers who want to participate in net metering are limited in capacity size so that they generate no more than 110% of the customer’s prior 12 months of electricity usage.”Source: Source: ComEd – Net metering
For example, if your electrical usage for the past twelve months was 10,000 kWh, your system can generate up to 11,000 kWh of electricity, and you would qualify for net metering. If your system is above 110%, (i.e. 11,001 kWh) you will not qualify for net metering, but instead put on a different tariff (see also below).
I understand from talking with Lisa Albrecht that calculating the amount of kWh your system could generate is still a rather basic process on ComEd’s side, meaning that certain variables that may impact your solar production, such as shading, are not accounted for. Lisa points out that using more robust calculation tools that are also used for financial analysis should yield a more accurate performance forecast. But ideally, you would not have to worry about these details as your solar installer should make sure that you end up with a right-sized system, and be approved for net metering.
One little snag
Net metering works beautifully if you have a track record for your electrical consumption over the past twelve months. But what if you build a new home or you would like to install a solar system that also should charge the electrical vehicle you plan to buy? In other words, you don’t have that track record yet. You will be above the 110% production threshold and as such won’t be eligible for net metering.
You can still proceed with your dream of a solar PV system. Size your solar PV system to your needs and instead of net metering, ComEd will put you on a tariff that is called a Rider POG, which unfortunately pays quite a bit less than the retail rate and won’t offer credits on distribution and transmission service charges.
Once your electrical consumption is at or below 110% (which will probably take up to twelve months), you can apply for net metering and benefit from the one-to-one retail rate credit and rollovers.
I call this a snag because this is not encouraging electricity conservation.
The solar policy landscape is constantly evolving, and not always in a positive direction. There have been challenges and changes to net metering in some states, rolling back programs, which led to court battles. When you read this, make sure to check the current net metering rules for your area and the time of your installation.