Buying a Photo Voltaic Solar Electronics System

8/3/2019 Buying a Photo Voltaic Solar Electronics System

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S T A T

E O F CAL I F O R N

I A

E N E R G Y CO M M

I S S I O

N

2000 1975

H A N D B O O K

CALIFORNIA

ENERGY

COMMISSION

Gray Davis, Governor

ReprintedAPRIL 2000

P500-99-008

BUYING A

P HOTOVOLTAIC

SOLAR E LECTRIC S YSTEM :

A CONSUMER GUIDE

R E N E W A B L E

E N E R G Y

P R O G R A M



S T A T

E O F CAL I F O R N

I A

E N E R G Y CO M M I S S

I O N

2000 1975

H A N D B O O K

CALIFORNIA

ENERGY

COMMISSION

Gray Davis, Governor

ReprintedAPRIL 2000P500-99-008

BUYING A

P HOTOVOLTAIC

S OLAR E LECTRIC S YSTEM :

A CONSUMER GUIDE

R E N E W A B L E

E N E R G Y

P R O G R A M



Buying a Photovoltaic Solar Electric System: A Consumer Guide

i

Acknowledgements

Buying a Photovoltaic Solar Electric System: A Consumer Guide is based on a similarbuying guide, Consumer’s Guide to Buying a Solar Electric System, authored by ThomasStarrs and Howard Wenger, and funded by the U.S. Department of Energy’s National

Renewable Energy Laboratory (NREL). With the express permission of NREL,California Energy Commission staff have updated NREL’s Consumer Guide, and aremaking the new Guide available to the public.

Contributing Energy Commission staff included Sanford Miller as technical advisor andKate Zocchetti as project manager of Buying a Photovoltaic Solar Electric System: A

Consumer Guide. Vince Schwent and Abolghasem Edalati assisted with technicalinformation, and Maralyn Blackman provided clerical support. We appreciate thevarious retailers of photovoltaic solar electric systems who offered comments andsuggestions on the Guide.

Disclaimer

References in Buying a Photovoltaic Solar Electric System: A Consumer Guide to anyresources, products, companies, or services are provided as a public service, and are notan endorsement, recommendation, or favoring of same by the California Energy

Commission. The State of California and the California Energy Commission and itsemployees make no warranties, express or implied, and assume no legal liability for theinformation included in this Guide. We apologize for any errors or omissions, andwelcome suggestions to consider for future editions of this Guide.




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Table of Contents

Page

List of Tables and Figures....................................................................................................v

Introduction..........................................................................................................................1What is a solar electric or photovoltaic system? ....................................................1Is photovoltaic electricity more expensive? ..........................................................2

Is my home or business a good place for a PV system? ......................................................3How big should my PV system be? .......................................................................4What features should my PV system have? ...........................................................5How much electricity will a PV system produce? .................................................5

Investing in a PV system......................................................................................................7How much does a PV system cost?........................................................................7Are incentives available to help reduce my costs?.................................................8What is the Emerging Renewables Buy-down Account? ......................................8What are the eligibility requirements for the Buy-down Account? .......................8How can I finance my PV system? ......................................................................11Will a PV system increase my property taxes? ....................................................11

Connecting a PV system to the utility grid ........................................................................11What is net metering?...........................................................................................12What is an interconnection agreement?................................................................12

What should I know about Utility Interconnection Standards? ...........................13What should I know about permits and codes?....................................................14How do I get the utility and inspection signoff? ..................................................14What do I need to know about the system warranty?...........................................15How do I insure my PV system? ..........................................................................16

Selecting a PV retailer or provider.....................................................................................16How do I find the right company?........................................................................16How do I choose among PV providers?...............................................................17

Getting help........................................................................................................................18

Contacts..............................................................................................................................19

Definitions..........................................................................................................................21

Endnotes.............................................................................................................................25




v

List of Tables and Figures

Page

Table 1 – Roof Area Needed for Various Sizes of PV Systems..........................................4Table 2 – PV System Cost Estimates (before rebate)..........................................................8Table 3 – Estimated Net System Cost and Monthly Payments .........................................10Table 4 – Estimated Net Savings.......................................................................................10

Figure 1 – 2-kW PV Statewide System Production.............................................................6




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Introduction

Buying a Photovoltaic Solar Electric

System: A Consumer Guide walks youthrough the basic technical, economic

and regulatory information you need toknow before buying a photovoltaic (PV)solar electric generation system. It alsodescribes how to take advantage of financial rebates offered through theEnergy Commission’s EmergingRenewables Buy-down Account.

A word of caution: This Guide isnot a comprehensive technical oreconomic guide on photovoltaic

systems. For that information, seethe “Getting Help” section or consultan experienced photovoltaic systemdesigner or supplier.

What is a solar electric orphotovoltaic system?

Unlike a solar hot water system that usesthe sun’s energy to heat water, solarelectric or photovoltaic technology usesthe sun’s energy to make electricity.

Learning from the word itself, the prefix“photo” means “produced by light,” andthe suffix “voltaic” refers to “electricityproduced by a chemical reaction.” PVtechnology produces electricity directlyfrom the electrons freed by theinteraction of sunlight with certainsemiconductor materials, such as silicon,

in the PV module. The electrons arecollected to form a direct current (DC)of electricity.

The basic building block of PV

technology is the solar “cell.” Manycells may be wired together to produce aPV “module,” and many modules arelinked together to form a PV “array.”PV modules sold commercially range inpower output from about 10 watts to 300watts, and produce a direct current likethe current from a car’s battery.

A complete PV system usually consistsof one or more modules connected to aninverter that changes the PV's DCelectricity to alternating current (AC)electricity to power your electricaldevices and to be compatible with theelectric grid.

1Batteries are often

included in the system to provide back-up power in case of utility poweroutages. If you are seeking a reliablegeneration system that can functionindependently of the utility grid,batteries may be a viable component toyour total system.

PV cells can be made from severalprocesses or technologies. They all dothe same job -- produce electricity fromsunlight. Types of PV cells include:

! Crystalline Silicon! Poly-crystalline Silicon! Amorphous Silicon! Cadmium Telluride! Copper Indium Gallium Diselenide! Copper Indium Diselenide! Gallium Arsenide

The basic types of inverters include:

! True sine wave inverter. If youplan to take advantage of netmetering (see “What is Net




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Metering?”) and feed electricityinto the transmission grid, thenyou must have this type of inverter.

Most households use alternatingcurrent in their electric circuits,with power supplied from theutility at 120 volts and 60 cyclesper second. A true sine waveinverter transforms the directcurrent from the PV modules toalternating current of 120 voltsand 60 cycles per second. Thistransformation may alsosynchronize your system with the

utility’s system.

! Modified sine wave inverter.Although similar to a true sinewave inverter, a modifiedinverter does not provide thesame quality of 60 cycle-currentthat can be fed back to the utilitygrid. This quality of power,however, can be used at yourhome or business to power manyAC loads.

Instead of an AC inverter, a DCconverter or charge controller may beused. This device converts the ACpower from the utility grid into DCpower that can be used to power DCloads at your site, or to charge batteries.

PV systems produce powerintermittently because they work onlywhen the sun is shining. Moreelectricity is produced on a clear, sunnyday with more intense sunlight and witha more direct light angle, as when thesun is perpendicular to PV modules.Cloudy days can significantly reduceoutput, and no power is produced atnight. PV systems work best during

summer months when the sun is higherin the sky and the days are longer.Because of these variations, it is difficultfor PV systems to furnish all the poweryou need; they are typically used in

conjunction with utility-suppliedelectricity.

Is photovoltaic electricity moreexpensive?

PV-generated electricity is still moreexpensive than conventional utility-supplied electricity when amortized overthe life of the system. Althoughimproved manufacturing has

substantially reduced the cost since the1970s, PV electricity can still cost about25 cents or more per kilowatt-hour(kWh). Depending on the installed costof the system, the retail price is roughlytwice what most California residents payfor utility-supplied electricity.

Most of PV electricity’s cost comes fromthe expense of initially purchasing thesystem. This investment is like paying

for years of electricity bills all at once.Although you will appreciate thereduction in your monthly electricitybills, the initial investment is substantial.

The Energy Commission’s Buy-downAccount is intended to reduce this up-front investment cost to make PVsystems more affordable. Before wediscuss ways the Buy-down Account canhelp you reduce the cost of a PV system,

you should first consider these questions.




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Is my home or business agood place for a PVsystem?

First consider how much sun your sitereceives. Your property should haveclear, unobstructed access to the sun formost of the day, and throughout the year.In California, the sun is always in thesouthern half of the sky and is higher inthe summer and lower in the winter.

Generally speaking, thesouthern part of the statewill produce more PVelectricity. Also, inlandregions have more sunny

days and can potentially produce moreelectricity than coastal areas. (See “Howmuch electricity will a PV systemproduce?”)

The best orientation for a PV system ison a south-facing roof; however, roofsthat face east or west may also be

acceptable. Flat roofs also work well forsolar systems because the PV array canbe mounted either flat on the roof facingthe sky or on frames tilted toward thesouth at an optimal angle.

If a rooftop cannot be used, your PVarray can also be placed on the ground;either in a “fixed” mount or a “tracking”mount that follows the sun and orientsthe PV array to maximize the amount of

electricity it generates.

Other options (primarily for businesses)include using mounting structures thatdo double-duty by creating coveredparking areas or window awnings.

If your location looks promising, a PVprovider can trace the sun’s path for youand determine whether your home orbusiness would benefit from a PV

system.

Is my site free from shading?To make the best use of your PV system,you need most or all of the sun’s path tobe clear and not shaded by trees, roof gables, chimneys, buildings, or otherfeatures of your home and thesurrounding landscape.

Shading will

substantially reducethe amount of electricity that yoursystem can produce.Should you be in a

situation where neighboring trees areshading your roof, keep in mind thatexisting California law establishes yourrights to receive sunlight on yourproperty (California Civil Code Section801.5 and California Public ResourcesCode sections 25980, et. seq.).

Do I have enough area?The amount of roof space needed toroof-mount a solar system is based onthe size or "generating capacity” or“rating” of the system you purchase.Most residential systems require as littleas 50 square feet of mounting area for asmall “starter” system, or as much as500-1,000 square feet for a PV arraycapable of meeting all of a homeowner’s

needs. Commercial systems aretypically much larger than residentialsystems.

Discuss the size of your system withyour PV provider. A rule of thumb isthat a square foot of single- or poly-crystalline PV module area produces 10




4

watts of power in bright sunlight.Therefore, a 1000-watt system requiresabout 100 to 200 square feet of roof area, depending on the type of PVmodule.

The amount of roof area needed alsodepends on the PV module’s efficiencyin converting sunlight to electricity.Table 1 provides approximate roof arearequirements as a function of PV

efficiency (percent) and rating (watts).

Table 1: Roof Area Needed for Various Sizes of PV Systems

PV capacity rating (watts)

100 250 500 1000 2000 4000 10000 100000

PV module

efficiency* (percent) Roof area needed in square feet

4 30 75 150 300 600 1200 3000 300008 15 38 75 150 300 600 1500 15000

12 10 25 50 100 200 400 1000 1000016 8 20 40 80 160 320 800 8000*Although the efficiency (percent of sunlight converted to electricity) varies withdifferent types of PV modules, higher-efficiency modules typically cost more.

Do I have a good roof?While a PV system can be installed onany type of roof, some types of roofs aresimpler and cheaper to work with thanother types.

Typically, composition shingle roofs arethe easiest to work with, and slate roofsare the most difficult. Between these areshake roofs, flat concrete tiles andmission tile roofs. In any case, anexperienced PV installer will know howto work on all roof types and should useroofing techniques that eliminate anypossibility of leaks.

Solar electric roofing tiles are new PVproducts on the market. These tiles,similar in appearance to slate, are usedinstead of regular roofing materials, andcan be used on both new construction orre-roofing. Solar electric roofing tilescan be sized to fit a conventional roof

layout, or customized for different roof configurations.

Ask your PV provider if installing a PVsystem impacts your roof warranty. If your roof is older and needs to bereplaced in the very near future, you maywant to replace it at the time the PVsystem is installed and avoid the latercost of removing and reinstalling yoursystem. If, however, your roof must bereplaced after the system has beeninstalled, some roofers will insist on atype of mounting system that usescommon roof flashing techniques toensure a watertight seal.

How big should my PV systembe?

Several factors will influence the size of the PV system you select. As a startingpoint, consider how much of your




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present electricity needs your PV systemshould supply.

If you want to meet 50 percent of yourelectricity needs with your PV system,

you should choose a system sized toproduce about half of your usualelectricity demand. One way to do thisis by examining past electric bills. Youcould also contact your utility andrequest the total electricity demand,measured in kilowatt-hours, for yourhousehold or business over the last 12months. Ask your PV provider howmuch electricity your PV system wouldproduce on an annual basis (also

measured in kilowatt-hours) andcompare it to your annual electricitydemand. This will also give you an ideaof how much money you will save onyour electricity bill once your PV systemis installed and generating.

There is no minimum system sizerestriction to qualify for the EmergingRenewables Buy-down Account;however, the maximum size cannot bemore than 125 percent of the site’sannual historical or current needs.

For example, if you used 6,000 kilowatt-hours last year, a system that producesmore than 7,500 kilowatt-hours per yearwould not qualify for the buy-down.

What features should my PVsystem have?

Some PV systems have batteries that canprovide back-up power to your home orbusiness in case of utility grid outages.Batteries certainly add value to yoursystem, but at an increased price. Keepin mind that batteries and otherelectricity storage devices are notcovered under the Energy Commission’s

Buy-down Account, and are notconsidered in determining eligiblerebates.

You may also want to consider the

“economies of scale” associated withyour system, which means that a largersystem costs less per kilowatt-hourgenerated, even though it costs moreoverall.

For example, many inverters are sized toaccommodate systems up to 4 to 5kilowatts. If your PV array is smaller(say 3 kilowatts) you may still end upbuying the same inverter. Similarly,

your PV provider is likely to offer you abetter price to install a 2-kilowatt systemall at once than 1 kilowatt this year and 1kilowatt next year, because multipleorders and multiple site visits are moreexpensive. On the other hand, putting asystem together in this “modular”fashion may be more attractivefinancially, as it allows a pay-as-you-goapproach.

How much electricity will a PVsystem produce?

PV systems produce the most electricityfrom spring through fall when the sun isshining. Energy production will vary, of course, depending on geography andclimate. The following map provides very

approximate statewide production

The usable energy a typical house in California gets from sunshine in one

year is enough to satisfy eight times its total annual

electricity needs!




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estimates for a 2-kW rooftop PV systemfacing due south at a 20-degree tilt.

In California, the “average” residentialcustomer uses 6,500 kilowatt-hours

(kWh) per year. As the map shows, a 2-kilowatt system would supply about 62percent of the average customer’s totaldemand. A 1-kilowatt system would

probably supply about one-third of acustomer’s load, while a 3-kilowattsystem might supply almost all of anaverage customer’s needs. Naturallythese estimates vary depending on the

geographic location, whether trackingdevices are used, weather conditions,and so on.

Figure 1: 2-kW PV Statewide System Production

3360

3440

3640

4040

Deduct 15% if system islocated within 30 miles of thecoast. Deduct 7% if system islocated in valley regionssubject to fog conditions.

Central Valley Region

CALIFORNIACALIFORNIA

Coastal Region

Source: Energy Commission staff estimates derived from Pacific Energy Group estimates.

Electricity production and savings example

On an approximate basis, a 2-kW rooftop PV system in an inland area of Los Angeleswould potentially produce the following amount of electricity:

2,020kWh/kW x 2kW = 4,040 kWh

This reflects an annual “capacity factor” of 23 percent

4040kWh/8760 hours per year / 2kw = 23




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System size x annual capacity factor x hours per year = total kWh per year

2kW system x .23 x 8760 hours = 4,030 kWh per year

Using the above 2-kilowatt system as an example, average annual savings might be:

4,030 kWh x 12¢/kWh = $484 per year, or about $40 per month

The electric rate of 12¢/kwh is anapproximate rate and reflects the higherrate tier of Pacific Gas & Electric andSouthern California Edison. Check yourlocal utility rates to estimate the value of the electricity your system wouldproduce.

Remember that actual energy productionwill vary by up to 20 percent from thesefigures, depending on your specificgeographic location, the system’s angleand orientation, and the quality of thesystem’s components and installation.

Be sure to discuss these issues with yourPV provider and consider asking for awritten estimate of the average annualenergy production from the system. Anestimate can be accurate for an averageyear, but actual electricity productionwill fluctuate from year to year, based onnatural weather and climate variations.

Recent California law allows you to usethe electric grid like a battery and storeany surplus electricity produced from thePV system on the electric utility grid tobe used later (see “What is netmetering?”). This is a real advantage toyou, placing a value on the electricityyou generate at the full retail electricityrate.

Reminder: If electric rates increase infuture years, savings will also increase.Conversely, if electric rates decline,

savings from the PV system will godown.

Investing in a PV system

How much does a PV systemcost?

The cost of a PV system depends on thesystem’s size and the types of components, but also scales somewhatwith the system size or rating, and theamount of energy produced.

As shown in Table 2, a small, single-PVpanel system with a built-in inverter that

produces about 100 watts may cost around$900 installed, or $9 per watt. Such asmall system would offset only a smallfraction of your electricity bill.

A 2-kilowatt (2,000-watt) system may cost$13,000 to $20,000 installed, or $6.50 to$10 per watt. At the other extreme, a 5-kilowatt system that will completely offsetthe energy needs of many conventionalhomes may cost $30,000 to $40,000

installed, or $6 to $8 per watt. (All abovecosts are before deducting the Buy-downrebate.)

These are rough estimates; your costswill depend on the system’sconfiguration, equipment options, andlabor costs. Prices vary depending on




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other factors as well, such as the PVprovider, whether or not your home isnew, if the PV is integrated into the roof

or mounted on top of the existing roof,and the PV manufacturer.

Table 2: PV System Cost Estimates (before rebate)

Watts Cost per Watt (dollars) Total System Cost (dollars) 100 $9 $900

2,000 6 – 10 13,000 – 20,0005,000 6 – 8 30,000 – 40,000

PPrreessccrriippttiioonn ffoorr aa LLeeaasstt--CCoosstt PPVV SSyysstteemm

1. Select a standardized PV system (offered by some retailers).2. Have an easy-to-install system, mounted on a composition roof or the ground.

3. Buy as a group to get volume discounts.4. Above all, shop around.

Are incentives available to helpreduce my costs?

Yes! Reducing your cost is the primary

feature of the California EnergyCommission’s Emerging RenewablesBuy-down Account.

What is the EmergingRenewables Buy-down Account?

The California Legislature set aside $54to reduce, or “buy down,” the up-frontprice consumers pay to purchase and

install emerging renewable energytechnologies, such as solar photovoltaic.Buy-down amounts are based on thegenerating capacity of the systems,measured in watts.

The amount of the buy-down willdecline over the lifetime of the Account,

starting with a block of funds thatprovides rebates of $3 per watt, or 50percent of the total eligible system cost,whichever is lower. It ends with a finalblock of funds that provides rebates of

$1 per watt, or 20 percent of the totalcost. Rebates are given on a first-come,first-served basis; if you apply early, youwill receive higher rebates.

What are the eligibilityrequirements for the Buy-downAccount?

Site requirementsYour site is eligible if:

! it is located in the utility serviceterritory of Pacific Gas & ElectricCompany (PG&E), San Diego Gas &Electric Company (SDG&E),Southern California Edison (SCE),or Bear Valley Electric Company,and




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! it is connected and remainsconnected to the utility grid (or willbe connected, in the case of newconstruction).

Technology requirementsTechnologies eligible for rebates are:

! photovoltaic systems! small wind turbines with an output of

10 kilowatts or less! fuel cell systems using renewable

fuels! solar thermal electric generation

systems.

This Guide focuses on photovoltaicsystems. The Energy Commission plansto develop a similar buying guide forwind technologies. Buying guides forfuel cells and solar thermal applicationswill be considered as markets developfor these technologies.

You can install your own PV system andbe eligible for the rebate, providing youare technically proficient inunderstanding wiring schematics,electrical codes, and mountingtechniques for roofs or other locations.

Otherwise, you should hire aprofessional PV provider to help youselect the system size and its installedlocation, and to install your system (see“Selecting a PV retailer or provider”).

Here are additional questions you shouldconsider before making your finalpurchase decision.

How can I benefit from the EmergingRenewables Buy-down Account?The Buy-down Account offers financialincentives that encourage you to

purchase renewable energy electricgenerating systems. If you are thinkingabout buying a PV system, the EnergyCommission provides rebates that willreduce your initial cost. This makes

generating electricity from solar energymore affordable.

If you purchase a PV system during theinitial phase of the program, your rebatewould be $3 per watt or 50 percent of your total installed costs, whichever islower. For a 2-kilowatt system costing$12,000 or more, for example, the rebateamount would be $6,000: $3 per watt x2000 watts. If the system cost $18,000,the rebate would still be $6,000, basedon the lower $3 per watt amount,equivalent to a 33 percent discount.

You or your PV retailer can reserve arebate amount at a specified fundinglevel block. Each block of funds isavailable on a first-come, first-servedbasis until it is depleted. You have ninemonths from the date of reservation tobuy and install systems up to 10 watts insize.2

When the system is installed andoperating, you must submit a claim formto the Energy Commission. Includedocumentation verifying properinstallation (a copy of the buildingpermit is required). The EnergyCommission will then issue a check toeither you or your PV retailer,whomever reserved the rebate, typicallywithin 30 days of receiving the claim

form.






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Are there other California incentiveprograms?Yes. Even if you do not qualify for theEmerging Renewables Buy-downAccount, you are not necessarily

excluded from receiving other financialincentives. Many municipal utilities —including the state’s largest, LADWPand SMUD — are offering buy-downsor other programs to help theircustomers obtain PV systems for theirhomes or businesses. Contact your localutility for more information.

Are there Federal incentive programs?Yes, the U.S. government also providesfinancial support for developing PV

technology — through a tax credit forcommercial uses of solar energy. Thisenergy investment credit providesbusiness taxpayers (but not individualsor utilities) with a 10 percent tax creditand a five-year accelerated depreciationfor the cost of equipment used togenerate electricity using solartechnologies.

How can I finance my PV system?

While there are some special programsfor financing solar and other renewableenergy investments, most financingoptions are already familiar to you.

The best way to finance PV systems forhomes is through a mortgage loan.Mortgage financing options include yourprimary mortgage, a second mortgage,such as a U.S. Department of Housingand Urban Development Title 1 loan, ora home equity loan that is secured byyour property.

There are two advantages to mortgagefinancing. First, mortgage financingusually provides longer terms and lowerinterest rates than other loans, such as

conventional bank loans. Second, theinterest paid on a mortgage loan isgenerally deductible from your federaltaxes. If you buy the PV system at thesame time that you build, buy, or

refinance the house on which the systemwill be installed—adding the cost of thePV system to your mortgage is likely tobe relatively simple and may avoidadditional loan application forms or fees.

If mortgage financing is not available,look for other sources of financing, suchas conventional bank loans. PV systemspurchased for business applications areprobably best financed through acompany’s existing sources of funds forcapital purchases—usually SmallBusiness Administration loans orconventional bank loans. Because yourPV system is a long-term investment, thePV financing terms and conditions arelikely to be important factors indetermining the effective price of yourPV-generated electricity.

Will a PV system increase myproperty taxes?

No. All PV systems installed from 1999until 2006 will not be subject to propertytaxes (Revenue and Taxation Code,section 73).

Connecting a PV system tothe utility grid

All utilities in thestate must offer theoption of interconnecting on anet metering basis toresidential and smallcommercialcustomers with PV or




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small wind systems 10 kilowatts or less(California Public Utilities Code section2827).

What is net metering?

As an eligible customerwith a PV or smallwind system, netmetering allows you tointerconnect with yourutility and feed your

surplus electricity to the utility grid.You can use an equivalent amount of electricity later without additional cost toyou.

Net metering allows your electricitymeter to spin forward when electricityflows from the utility into your building,and backward when your systemproduces surplus electricity that is notimmediately used. Your excesselectricity is “banked” on the utility grid.

At least once a year, you are charged forthe net energy consumed over theprevious 12 months.4 Under federal law,utilities must buy any excess electricityyou generate beyond what you use inyour home or business. Utilities are notrequired to carry over your credit fromyear to year, however, so any “net”energy you generate may be lost at theend of the 12-month period.

Net metering simplifies the meteringprocess in two ways: it eliminates theneed for a second meter, and it

streamlines the accounting process byeliminating the need for payments fromyour electricity service provider. Mostutilities have established simplifiedagreements for customers that qualify;be sure to ask your PV provider or yourutility for a net-metering agreement.

How does net metering affect me?Net metering allows you to get morevalue from your generated electricity byoffsetting your future retail electricitypurchases, rather than selling your

excess electricity to your utility at thelower wholesale, or “avoided cost,”price.

Without net metering, you would losemuch of the value of your excesselectricity. The electricity you generatefrom your PV system would supply yourown immediate needs, and you wouldpurchase any shortfall from the utility atthe retail rate. Without net metering,

any electricity you generated and did notimmediately use would be sold back tothe utility at the avoided cost rate. Thisrate is much lower than the retail rate—about 2 to 3 cents per kilowatt-hour, asopposed to a retail rate of 10 to 15 centsper kilowatt-hour.

At a residence, net metering can usuallybe accomplished by using your existingelectricity meter. Utilities usuallyrequire business customers without net-metering agreements to use two meters:one to measure the flow of electricityinto the building, the other to measurethe flow of electricity out of thebuilding. For large commercial andindustrial customers who generate theirown power, this “dual metering”arrangement is still the norm.

What is an interconnection

agreement?

Interconnecting your PV system to theutility transmission grid will require youto enter into an interconnectionagreement, and a purchase and saleagreement. Most California utilitieshave developed standardized




13

interconnection agreements for small-scale PV systems as part of theirimplementation of California’s netmetering law. These agreements may bea single contract with your local utility

or separate contracts with your utilityand your electrical service provider.

The interconnection agreement definesthe terms and conditions under whichyour system will be connected to theutility grid, including the technicalrequirements necessary to ensure safetyand power quality. Other items in theagreement include your obligation toobtain all necessary permits for the

system, maintain the system in goodworking order, and generally beresponsible for the system’s safeoperation.

The interconnection agreement alsospecifies the metering arrangements(usually net metering for residentialcustomers, dual metering for commercialand industrial customers), and any otherrelated issues.

Most utilities have established simplifiedinterconnection agreements; be sure toask your provider or utility. Thelanguage in these agreements should besimple and straightforward. If you areunclear about your obligations, youshould contact your utility or electricservice provider for clarification. If yourquestions are not adequately addressed,contact one of the “Getting help” listingsat the end of this Guide.

What should I know about UtilityInterconnection Standards?

Recent progress has been made indeveloping nationally recognizedstandards for utility interconnection of

PV systems. Although these standardsare not necessarily binding on utilities,many utilities are adopting them ratherthan developing their own.

The most important standard focuses oninverters. Traditionally, inverters simplyconverted the DC electricity generatedby PV arrays into AC electricity that isused in your home. More recently,inverters have evolved into remarkablysophisticated devices to manage andcondition power. Many new inverterscontain all the protective relays,disconnects, and other componentsnecessary to meet the most stringent

national standards.

Two of these standards are particularlyrelevant:

1. Institute of Electrical and ElectronicEngineers, P929: Recommended

Practice for Utility Interface of

Photovoltaic Systems. Institute of Electrical and Electronic Engineers,Inc., New York, NY (1988, withrevision being finalized in 1999).

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

You do not necessarily need to knowabout these standards, but your PVprovider and utility should. It is yourobligation to ensure that your PVprovider uses equipment that complieswith these or other relevant standards.




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What should I know aboutpermits and codes?

In most locations, you will need toobtain various permits from your city or

county building department beforeadding a PV system. You will likelyneed to purchase a building permit, anelectrical permit, or both to legally begininstallation. Typically, your PVprovider will take care of this task,rolling the price of permits into theoverall system price. In some cases,however, your PV provider may notknow how much time or money will beinvolved in “pulling” a permit. In that

case, permitting may be priced on a“time and materials” basis. Alwaysmake sure that permitting costs andresponsibilities are addressed with yourPV provider at the start.

Code requirements for PV systems varysomewhat from one jurisdiction to thenext, but most requirements are based onthe National Electrical Code. NECArticle 690 carefully spells out

requirements for designing and installingsafe, reliable, code-compliant PVsystems. Because many localrequirements are based on the NEC,your building inspector is likely to relyon Article 690 for guidance indetermining whether your PV systemhas been properly designed and installed.

If you are among the first people in yourcommunity to install a grid-connected

PV system, your local government maynever have permitted one of thesesystems, and the building inspector mayhave never seen one. If this is the case,you and your PV provider can speed theprocess along by working closely andcooperatively with your local building

officials to help educate them about thetechnology and its characteristics.

You may live in a location where youmust gain installation approval from an

architectural committee or homeowners’association to comply with the“Covenants, Codes and Restrictions”applicable to your home. If so, you oryour PV provider may need to seek agreement from your neighbors andsubmit your system plans to ahomeowner committee before you installa system. Complying with “CC&Rs” isa very important step that you shouldundertake before you begin installing

your PV system. If this process becomesan obstacle, contact one of the “Gettinghelp” listings at the end of this Guide.

How do I get the utility andinspection signoff?

After your new PV system is installed,your local permitting agency, usually abuilding or electrical inspector, and yourutility will probably need to inspect and

sign off on your system. Depending onthe inspection, your PV provider mayhave to make corrections to your systemto satisfy the inspector’s requirements.Corrections are fairly common in theconstruction business, so don’t bealarmed if they are requested of you andyour provider.

A copy of the building permit showingfinal inspection signoff, and a recent

utility statement showing electricalservice at the installation location, arerequired to obtain a rebate from theEmerging Renewables Buy-downAccount.




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What do I need to know about thesystem warranty?

You are required to obtain a minimumfive-year full-system warranty against

defective parts, workmanship, or unusualdegradation of output (performance) toqualify for the Emerging RenewablesBuy-down. The equipment warrantymust cover the full cost of repair orreplacement of defective components. If the system is professionally installed,rather than self-installed, the warrantymust also include the labor of removingand reinstalling any defectivecomponents and shipping costs. Ask

yourself, “Will this company standbehind the full-system warranty for thenext five years?”

How do I obtain warranties?Retailers participating in the EmergingRenewables Buy-down Account arerequired to provide a five-year warrantyon the PV system components that theysell.

If the retailer installs the equipment foryou and the installation price is includedin the overall system price on which thebuy-down amount is based, then therequired warranty includes the cost of removing a defective component,shipping it to the manufacturer, andreinstalling it after it is repaired orreplaced.

On the other hand, if the retailer simply

sells you the equipment, and you installit yourself or have it installed bysomeone other than the retailer, then theretailer is not responsible for the cost of removal, shipping, and reinstallation —you will have to bear those costsyourself. You should consider thesewarranty implications in deciding

whether to have the retailer also serve asthe installer.

The Buy-down Account’s five-yearwarranty requirement supercedes any

other warranty limitations. In otherwords, if the manufacturer’s ownwarranty on a particular component isless than five years, the retailer must stillprovide you with a five-year warranty.Similarly, if the manufacturer’s warrantyis limited and does not include the costof removing, shipping, and reinstallingdefective components—the retailer mustcover these costs if the retailer alsoinstalled the system.

The required five-year warranty appliesonly to components of the generatingsystem covered by the Buy-downAccount, including PV modules,mounting or tracking structures,inverters, wiring, foundations (only forfree-standing systems), and utility-required interconnection equipment.The warranty does not apply tocomponents used for electricity storage,including batteries and chargecontrollers.

Retailers participating in the Buy-downAccount are also required to provide awarranty against breakdown ordegradation in electrical output of morethan 10 percent of the system’s ratedelectrical output. The five-year warrantyyou receive may contain exclusions fordamage, malfunction, or degradation of electrical output caused by factorsbeyond the manufacturer’s or retailer’scontrol. These exclusions may include,but are not limited to, failure to properlyoperate and maintain the system, failureto comply with applicable buildingcodes and utility requirements,




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mishandling, neglect, vandalism, or actsof God.

The warranty may also containexclusions for systems that are not

installed by either you or anappropriately licensed Californiacontractor, and for systems that are notinstalled in accordance with applicablesafety and building codes and localutility requirements. Be sure to carefullyread the warranty and review the termsand conditions with your retailer toavoid later misunderstandings.

How do I insure my PV system?

As described earlier, your electric utilitywill require you to enter into aninterconnection agreement. One or moreprovisions of this agreement may specifyminimum insurance requirements thatyou must keep in force.

If you are buying a PV system for yourhome, your standard homeowner’sinsurance policy may be adequate to

meet the utility’s requirements.California law, however, does not allowa utility to require that you purchaseadditional insurance [California PublicUtilities Code section 2827 (F)].

If insurance coverage becomes an issue,contact one of the “Getting help” listingsat the end of this Guide.

Selecting a PV retailer orprovider

While some retailers offer equipmentonly with no installation, many retailerscan provide completely installedsystems. In some locations, finding aPV provider can be as simple as looking

in the telephone directory under “SolarEnergy Equipment and Systems—Dealers.”

Many of those listings, however, are for

companies experienced in solar waterheating system installations, not in PVsystem design or installation. Similarly,many electrical contractors, althoughproficient in typical electricalcontracting work, may not haveexpertise in working with PV systems orwith residential roof mountingtechniques. Once you have identifiedone or more companies, investigatefurther by taking the steps outlined in the

following sections.

How do I find the rightcompany?

Here are a couple of suggestions:

! Contact the Energy Commission toget a list of retailers participating inthe Buy-down Account. The list canbe found at the Energy

Commission’s Web site at<www.energy.ca.gov/programs> orby calling (800) 555-7794. TheEnergy Commission provides the listfor information purposes only, anddoes not endorse any of the retailers.

! Contact either the California Solar

Energy Industries Association at(800) 225-7799 or by fax at (949)837-7430; or the Independent Power

Providers at (209) 841-7001. Bothorganizations maintain a list of PVproviders they will send to you uponrequest.

! Conduct an Internet search.




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Reminder: If you purchaseequipment from an out-of-stateretailer, you will still be responsiblefor paying use tax on the purchase tothe State Board of Equalization

(BOE). Check with the retailer onuse tax withholding or call the BOEat (800) 400-7115 for moreinformation.

How do I choose among PVproviders?

Once you have compiled a list of providers, the next step is to call and ask them questions. When contacting any

company, consider its location relative toyours. Try to locate a PV provider whois relatively close to where the systemwill be installed and who meets the othercriteria outlined below.

When contacting companies, you mightask some of the following questions:

1. Has the company installed anygrid-connected PV systems?

Experience installing grid-connectedsystems is valuable because someelements of the installation—particularly interconnection with thelocal utility—are unique to thesesystems. If the company does nothave this experience, has it installedoff-grid systems?

Grid-connected systems arerelatively uncommon. Most

contractors with PV experience havetypically worked on systems that arenot connected to the electrical grid,such as those that power remotecabins far from a utility line. Thismeans they have experience with allaspects of installation exceptconnecting to the utility grid.

Although grid-connected work differs from off-grid work, acompetent company with experienceon photovoltaic systems should not

be eliminated just because they havenot installed grid-connected PVsystems.

2. How many years of experiencedoes the company have installingPV systems?This issue speaks for itself: acompany or contractor that has beenin business a long time hasdemonstrated an ability to work withcustomers and to compete effectivelywith other firms.

3. Is the company properly licensed?The Buy-down program requires PVsystems to be installed by anappropriately licensed Californiacontractor. For PV systems, thisrequirement means either an “A”(general engineering), C-10(electrical) or C-46 (solar)contractor’s license.

Although using a properly licensedcontractor is highly recommended,individuals who have adequateelectrical and constructionexperience are not prohibited frominstalling their own system andqualifying for the EmergingRenewables buy-down. A decisionto do so, however, should becarefully considered and only

attempted with a clear understandingof the complexities of the job andpotential effects on the systemwarranty.




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4. Does the company have anypending or active judgements orliens against it?As with any project that necessitateshiring a contractor, due diligence is

recommended. The CaliforniaContractor’s State License Boardmaintains records of the work historyof contractors. These records can beaccessed at (800) 321-2752, or in theSacramento area at (916) 255-3900.Records can also be found on theBoard’s website at<http://www.cslb.ca.gov>.

5. How do I obtain and chooseamong competing bids?If you have decided to get more thanone bid for your system installation,be sure that the bids are made on thesame basis. Comparing a bid for aground-mounted system to a bid fora roof-mounted system, for example,would not result in a faircomparison. Similarly, there aredifferent types of PV panels, some of which generate more electricity persquare foot than others.

Bids should clearly state themaximum generating capacity of thesystem, measured in watts orkilowatts. If possible, the bidsshould specify the system capacity in“AC watts” as defined by the Buy-down program. Also, try to obtainsome estimate of the system’s annualenergy production, measured inkilowatt-hours.

Bids should also include the totalcost of getting the PV system up andrunning, including hardware,installation, connecting to the grid,permitting, sales tax, and warranty.

6. Is the lowest price the “best deal”?It might not be. You must decidehow much you wish to pay for yourPV system, but price should not beyour only consideration.

Getting help

Many details about the EmergingRenewables Buy-down Account are notaddressed here, but your qualified PVprovider should be able to guide youthrough the process.

You can also contact the CaliforniaEnergy Commission. Obtain a copy of

the Guidebook for the RenewableTechnology Program, Volume 3 –

Emerging Renewable Resources Account

(CEC publication number P500-97-011V3). The Guidebook contains moredetailed program information and allnecessary forms needed to reserve arebate, and to request payment after yoursystem is installed and operating.Request a printed copy of the Guidebook

from the Call Center, or download it

from the Energy Commission’s website.

Other helpful information can be foundon the Energy Commission’s website,including lists of PV retailers, equipmentthat is eligible for the rebate, andcontacts for financing options.




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Contacts

California Energy CommissionCall Center

(800) 555-7794 (in California)(916) 654-4058 (outside California)

For faxed documents call (916) 653-6830Web site: www.energy.ca.gov/greengride-mail: [email protected]

California Solar Energy Industries Association (CalSEIA)(800) 225-7799Web site: www.calseia.org

Northern California Solar Energy Association (NCSEA)(510) 869-2759Web site: www.norcalsolar.orge-mail: [email protected]

Pacific Gas & Electric Company (PG&E)(415) 973-2628Web site: www.pge.com

Photovoltaics for Utility-Scale Applications (PVUSA)Technical Support

(530) 753-0725Web site: www.pvusa.com

San Diego Gas & Electric Company (SDG&E)(619) 650-6166Web site: www.sdge.com

Southern California Edison Company (SCE)(626) 302-8242 or(626) 302-9680Web site: www.sce.com




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Definitions

Alternating current (AC) – The flow of electricity that constantly changes directionbetween positive and negative sides. Almost all power produced by electric

utilities in the United States moves in current that shifts direction at a rate of 60times per second.

Ampere (Amp) - The unit of measure that indicates how much electricity flows througha conductor. It is like using cubic feet per second to measure the flow of water.For example, a 1,200-watt, 120-volt hair dryer pulls 10 amperes of electricitycurrent. (amps = watts/volts)

Average Demand - The energy demand for a given location over a period of time. Forexample, the number of kilowatt-hours used in a 24-hour period, divided by 24,tells the average demand for that location in that time period.

Avoided Cost - The amount of money an electric utility would need to spend for the nextincrement of electric generation to produce or purchase.

Battery - Batteries are often sold with a PV system. The primary purpose is to store theelectricity not immediately used, which could be used at some later time. Withnet metering, the value of batteries is less because the utility grid basically acts asa storage facility. For a reliable generation system that can function independentof the utility grid, however, batteries may be a viable component to the totalsystem. Back-up generators may be included in a system to provide power whenthe PV system is not operating, and are generally included when systems are not

grid connected. Neither batteries nor generators are eligible for rebate money.

Circuit – One or more conductors through which electricity flows.

Converter – An apparatus that changes the quantity or quality of electrical energy.

Customer load - The amount of power your site uses. Load may be expressed inkilowatts (capacity) or kilowatt-hours (energy). A site’s peak kilowatts generallyrefers to when electric demand requirements are highest.

Demand - The level at which electricity (or natural gas) is delivered to end-users at a

given point in time. Electric demand is measured in kilowatts.

Direct current (DC) – The flow of electricity that flows continuously in one direction.

Frequency - The number of cycles through which an alternating current moves in eachsecond. Standard electric utility frequency in the United States is 60 cycles persecond, or 60 hertz.




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Definitions

Grid - The electricity transmission and distribution system that links power plants tocustomers through high-power transmission line service.

Hertz - The unit of electromagnetic wave frequency that is equal to one cycle per second.

Interconnection - The linkage of transmission lines between two utilities, or between autility and an end-user, enabling power to be moved in either direction.

Inverter - Device used to change direct current electricity to alternating currentelectricity.

Kilowatt (kW) –1000 watts. A unit of measure of the amount of electricity needed tooperate given equipment. For example, one kW is enough power to illuminate 10light bulbs at 100 watts each. (volts x amps = watts)

Kilowatt-hour (kWh) – the amount of kW produced over a period of time, or onekilowatt of electricity supplied for one hour. For example, a one kW system, if operating at full capacity for 5 hours will produce 5 kWh of electricity.

Megawatt – One thousand kilowatts or one million watts. One megawatt is enough topower 1,000 average California homes per day.

Meter – A device that measures levels and volumes of customers’ electricity and gas use.

Mounting equipment - Equipment/apparatus used to fasten PV modules to the roof.

Peak load - The highest electrical demand within a particular period of time.

Photovoltaic cell – A device that produces an electric reaction to light, producingelectricity.

Solar Energy – Heat and light radiated from the sun.

Solar Thermal - The process of concentrating sunlight to create high temperatures thatare needed to vaporize fluid to drive a turbine for electric power generation.

Storage - Storage refers to saving surplus electricity produced by a PV system.Generally batteries are used as storage devices.

Tracking equipment - Structure that houses PV modules and that can automaticallyfollow the sun across the sky throughout the day to maximize output.




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Definitions

Utility grid - The interconnection of electricity generation plants through thetransmission and distribution lines to customers. The grid also refers to theinterconnection of utilities through the electric transmission and distribution

systems.

Volt - The amount of force required to drive a steady current of one ampere through aresistance of one ohm. Electrical systems of most homes and offices use 120volts. (Volts = watts/amps)

Watt (W) –Electric measurement of power at one point in time, as capacity or demand.For example, light bulbs are classified by wattage. (1000 watts = 1 kilowatt)




Endnotes

1. PV systems do not necessarily have to use an inverter in order to produce usable

power. For example, many “off-grid” systems use DC power to operate lights andmotors. On-grid systems can also use DC power but the DC circuits in the homemust then be separately connected to the rest of the home’s electric system throughthe use of a charge controller.

2. For systems larger than 10 kW, you have 18 months to buy and install the system. Asof March 1999, rebates available for systems greater than 10kW are $2.50/watt, or 40percent of the total eligible system cost, whichever is less.

3. Assumes interest is deductible from a home equity loan, and assumes your combinedstate and federal income tax rate at 30 percent.

4. You are permitted to pay for net energy consumed on a monthly basis as well.

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Buying a Photo Voltaic Solar Electronics System

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