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

A Consumer’s Guide

Get Your Power from the Sun

Solar energy has advanced greatly since 2003, when “A Consumer’s Guide: Get Your Power from the Sun” was written. The price for solar systems has dropped by more than a factor of ten, and solar cell efficiency continues to improve. The payback has decreased, making solar energy much more attractive now than in 2003. Although this guide still contains valuable information about how solar energy works, please consult recent publications if you need pricing or product maturity metrics. For example, here are some 2016 postings:

• Homeowner’s Guide to Going Solar (U.S. Department of Energy)

• EnergySage—Explore Solar (EnergySage) • Residential Consumer Guide to Solar Power (Solar Energy

Industries Association)

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BackgroundWhat is a solar electric or photovoltaic system? . . . . . . . . . . . . . . . .2Are incentives available to help reduce the cost? . . . . . . . . . . . . . . . .3

Investing in a PV systemWhy should you buy a PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . .5Is your home or business a good place for a PV system? . . . . . . . . . .5How big should your PV system be, and what features

should it have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6How much will you save with your PV system? . . . . . . . . . . . . . . . . .8How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . .8How can you finance the cost of your PV system? . . . . . . . . . . . . . .9

Selecting a PV provider Who sells and installs PV systems? . . . . . . . . . . . . . . . . . . . . . . . . . .11How do you choose among PV providers? . . . . . . . . . . . . . . . . . . . .11How do you choose among competing bids? . . . . . . . . . . . . . . . . . .12Is the lowest price the “best deal”? . . . . . . . . . . . . . . . . . . . . . . . . . .13

Before connecting a PV system to the gridWhat should you know about permits? . . . . . . . . . . . . . . . . . . . . . .14What should you know about insurance? . . . . . . . . . . . . . . . . . . . .14How do you get an interconnection agreement? . . . . . . . . . . . . . . .14How do you get a net-metering agreement? . . . . . . . . . . . . . . . . . . .15What should you know about utility and inspection sign-off? . . . .16What should you know about warranties? . . . . . . . . . . . . . . . . . . . .16

Getting help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Contents

Cover photo: This PV system, integrated into an awning over theback porch of a home in California, generates electricity whileshading the family's outdoor activities. (Courtesy of AstroPower/PIX12345)

Photo opposite: These PV modules are light and flexible, whichmakes them suitable for roofing shingles.

This Consumer’s Guide is based on a state-specific guide written by Tom Starrs and Howard Wenger for the California EnergyCommission, which was supported, in part, by the NationalRenewable Energy Laboratory in Golden, Colorado.

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Are you thinking about buying a solar electric system for your home or busi-ness? If so, this booklet provides some basic information that can help you.

Solar electric systems, which are also called photovoltaic or PV systems, are reliable and pollution-free. They make use of a renewable source of ener-gy—the sun. And PV systems for homes and businesses are becoming moreaffordable all the time.

PV works best in an energy-efficient building. So, adding insulation and ener-gy-efficient lighting, appliances, and windows is a good idea, to reduce yourhome’s overall electricity use before you install a PV system.

To make PV systems even more affordable, several states offer financial incen-tives through solar rebates and other programs. Some utilities have net meter-ing programs, which further enhance the economics of PV. Net meteringmeans that when your PV system generates more power than you need, theexcess goes to the utility grid and the meter runs backward. This allows youto receive full retail value for the power that your PV system generates.

This booklet can guide you through the process of buying a solar electric sys-tem. It is not a technical guide to designing or installing a system—for thatinformation, we recommend consulting an experienced PV system designeror supplier.

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

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What is a solar electric orphotovoltaic system?Photovoltaic (PV) systems convertsunlight directly to electricity. Theywork any time the sun is shining, but more electricity is producedwhen the sunlight is more intenseand strikes the PV modules directly(as when rays of sunlight are perpen-dicular to the PV modules). Unlikesolar thermal systems for heatingwater, PV does not use the sun's heat to make electricity. Instead, electrons freed by the interaction of sunlight with semiconductormaterials in PV cells are captured in an electric current.

PV allows you to produce electricity—without noise or air pollution—froma clean, renewable resource. A PV system never runs out of fuel, and itwon't increase U.S. oil imports. ManyPV system components are manufac-tured right here in the United States.These characteristics could make PV

technology the U.S. energy source of choice for the 21st century.

The basic building block of PV tech-nology is the solar “cell.” MultiplePV cells are connected to form a PV“module,” the smallest PV compo-nent sold commercially. Modulesrange in power output from about10 watts to 300 watts. A PV systemconnected or “tied” to the utility grid has these components:

• One or more PV modules, whichare connected to an inverter

• The inverter, which converts thesystem's direct-current (DC) elec-tricity to alternating current (AC)

• Batteries (optional) to provide energy storage or backup power in case of a power interruption or outage on the grid.

AC electricity is compatible with the utility grid. It powers our lights,appliances, computers, and televisions.

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

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

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

Second, if you live near existingpower lines, PV-generated electricityis usually more expensive than con-ventional utility-supplied electricity.Although PV now costs less than 1% of what it did in the 1970s, theamortized price over the life of thesystem is still about 25 cents per kilowatt-hour. This is double toquadruple what most people pay forelectricity from their utilities. A solarrebate program and net metering canhelp make PV more affordable, butthey can't match today's price forutility electricity in most cases.

Finally, unlike the electricity you purchase monthly from a utility, PVpower requires a high initial invest-ment. This means that buying a PVsystem is like paying years of electricbills up front. Your monthly electricbills will go down, but the initialexpense of PV may be significant. By financing your PV system, youcan spread the cost over many years,and rebates can also lighten yourfinancial load.

Are incentives available tohelp reduce the cost?Yes, many states offer incentives. For specific information, call one ofthe contacts listed under “GettingHelp” at the end of this booklet.Another excellent source is theNational Database of State Incent-ives for Renewable Energy (DSIRE).Prepared by the North Carolina SolarCenter, this database contains infor-mation on financial and regulatoryincentives that promote renewableenergy technologies.

Net Metering—In more than 35states, customers who own PV sys-tems can benefit from laws and regulations that require “net” electricmeter reading. The customer is billedfor the net electricity purchased fromthe utility over the entire billing period—that is, the differencebetween the electricity coming fromthe power grid and the electricitygenerated by the PV system. Throughnet metering, the customer obtainsthe full retail electricity rate—ratherthan the much lower wholesalerate—for kilowatt-hours of PV-pro-duced electricity sent to the utilitypower grid. The benefits of netmetering to consumers are especiallysignificant in areas such as Hawaiiand New York, which have highretail electric rates. Utilities also benefit because the solar-generatedenergy often coincides with theirperiods of “peak” demand for electricity.

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

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all of which provide an economicbenefit to consumers by loweringhigh capital costs. The U.S. govern-ment also provides financial supportfor PV technology through a taxcredit for commercial uses of solarenergy. This energy investment creditprovides businesses (but not individ-uals or utilities) with a 10% tax creditand 5-year accelerated depreciationfor the cost of equipment used togenerate solar electricity.

Buy-Down—Rebates and buy-downs, typically based on the ratedpower of the system, help to defrayhigh capital costs and to create competitive, sustainable market

growth. In the United States, the U.S. Department of Energy has beeninvolved in a program known asTEAM-UP, or Technology Experienceto Accelerate Markets in UtilityPhotovoltaics. Through this program,some 80 utilities in 40 states haveinstalled more than 7 megawatts of grid-connected PV; supplier buy-downs and consumer rebates rangebetween $2 and $4 per watt.

Residential Energy Rate—This is the average retail residential ratefor energy from utilities, in cents per kilowatt-hour. Check your utilitybill for your actual rate.

PV awnings such as this one in California provide bothelectricity and shade. A

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Why should you buy a PVsystem?People decide to buy PV systems fora variety of reasons. Some peoplewant to help preserve the Earth'sfinite fossil-fuel resources and reduceair pollution. Others want to investin an energy-producing improve-ment to their property. Some peoplelike the security of reducing theamount of electricity they buy fromtheir utility because it makes themless vulnerable to future priceincreases. And some people justappreciate the independence that a PV system provides.

If you plan to build a home awayfrom an established utility service,inquire about the cost of installing a utility line. Often, the cost ofextending conventional power toyour residence is higher than thecost of a solar option.

Whatever your reason, solar energy is widely thought to be the energysource of choice for the future, andyou may be able to take advantage of a state-sponsored program to helpmake it your energy choice for todayand tomorrow.

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

Can you locate your system so it works well?

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

location looks promising, your PVprovider can determine whether yourhome or business can effectively usea PV system.

The orientation of your PV system(the compass direction that your sys-tem faces) affects its performance. Inthe United States, the sun is alwaysin the southern half of the sky but ishigher in the summer and lower inthe winter. Usually, the best locationfor a PV system is a south-facingroof, but roofs that face east or westmay also be acceptable. Flat roofsalso work well for solar electric sys-tems, because PV modules can bemounted flat on the roof facing thesky or bolted on frames tilted towardthe south at an optimal angle. Theycan also be attached directly to theroof as “PV shingles.”

If a rooftop can't be used, your solarmodules can also be placed on theground, either on a fixed mount or a “tracking” mount that follows thesun to orient the PV modules. Otheroptions (often used in multifamily or commercial applications) includemounting structures that create cov-ered parking, or that provide shadeas window awnings.

Is your site free from shading bytrees, nearby buildings, or otherobstructions?

To make the best use of your PV sys-tem, the PV modules must have aclear “view” of the sun for most orall of the day—unobstructed by trees,roof gables, chimneys, buildings, andother features of your home and the

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Investing in a PV system

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

Does your roof or property contain a large enough area for the PV system?

The amount of space that a PV system needs depends on the size of the system you purchase. Someresidential systems require as little as 50 square feet (for a small “starter”system), but others could need asmuch as 1,000 square feet.Commercial systems are typicallyeven larger. If your location limitsthe size of your system, you maywant to install one that uses moreefficient PV modules. Greater effi-ciency means that the module needsless surface area to convert sunlightinto a given amount of electricpower. PV modules are available in a range of types, and some offermore efficiency per square foot than others do (see table on the next page). Although the efficiency (percent of sunlight converted toelectricity) varies with the differenttypes of PV modules available today,higher efficiency modules typically

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

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

Some types of roofs are simpler andcheaper to work with, but a PV sys-tem can be installed on any type.Typically, roofs with compositionshingles are the easiest to work with,and those with slate are the most difficult. In any case, an experiencedsolar installer will know how to work on all types and can use roof-ing techniques that eliminate anypossibility of leaks. Ask your PVprovider how the PV system affectsyour roof warranty.

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

How big should your PVsystem be, and what featuresshould it have?To begin, consider what portion ofyour current electricity needs youwould like your PV system to meet.For example, suppose that you wouldlike to meet 50% of your electricityneeds with your PV system. Youcould work with your PV provider to examine past electric bills and

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

You can contact your utility andrequest the total electricity usage,measured in kilowatt-hours, for yourhousehold or business over the past12 months (or consult your electricbills if you save them). Ask your PVprovider how much your new PVsystem will produce per year (alsomeasured in kilowatt-hours) andcompare that number to your annualelectricity usage (called demand) toget an idea of how much you willsave. In the next section, we'll pro-vide more information on estimatinghow much you will save.

Some solar rebate programs arecapped at a certain dollar amount.Therefore, a solar electric system that matches this cap maximizes the benefit of the solar rebate.

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

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

One optional feature to consider is a battery system to provide energystorage (for stand-alone systems) orbackup power in case of a utilitypower outage (for grid-connected systems). Batteries add value to yoursystem, but at an increased price.

As a rule, the cost per kilowatt-hourgoes down as you increase the size of the system. For example, manyinverters are sized for systems up to5 kilowatts, so even if your PV arrayis smaller (say, 3 kilowatts), you mayhave to buy the same size of inverter.Labor costs for a small system maybe nearly as much as those for a largesystem, so you are likely to get a bet-ter price for installing a 2-kilowattsystem all at once, rather thaninstalling 1 kilowatt each year fortwo years.

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

PV ModuleEfficiency (%) PV Capacity Rating (Watts)

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

4 30 75 150 300 600 1,200 3,000

8 15 38 75 150 300 600 1,500

12 10 25 50 100 200 400 1,000

16 8 20 40 80 160 320 800

For example, to generate 2,000 watts from a 12%-efficient system, you need 200 square feet of roof area.

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How much will you save with your PV system?The value of your PV system's elec-tricity depends on how much youpay for electricity now and howmuch your utility will pay you forany excess power that you generate.If your utility offers net metering(and so pays the full retail price foryour excess electricity), you and yourutility will pay the same price foreach other's electricity. You can usethe calculation box on the next pageto roughly estimate how much elec-tricity your PV system will produceand how much that electricity willbe worth. Actual energy productionfrom your PV system will vary by upto 20% from these figures, dependingon your geographic location, theangle and orientation of your system,the quality of the components, andthe quality of the installation.

Also, you may not get full retailvalue for excess electricity producedby your system on an annual basis,even if your utility does offer netmetering. Be sure to discuss theseissues with your PV provider. Requesta written estimate of the averageannual energy production from thePV system. However, even if an esti-mate is accurate for an average year,actual electricity production will fluctuate from year to year because of natural variations in weather and climate.

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

electricity will not be worth as muchas the electricity you actually use.You may earn only 2 cents per kilowatt-hour—or less than half theretail rate—for your excess power.

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

How much does a PV system cost?No single answer applies in everycase. But a solar rebate and otherincentives can always reduce thecost. Your price depends on a num-ber of factors, including whetheryour home is under construction andwhether PV is integrated into theroof or mounted on top of an exist-ing roof. The price also depends onthe PV system rating, manufacturer,retailer, and installer.

The size of your system may be themost significant factor in any meas-urement of costs versus benefits.Small, single-PV-panel systems withbuilt-in inverters that produce about75 watts may cost around $900installed, or $12 per watt. Thesesmall systems offset only a small fraction of your electricity bill. A 2-kilowatt system that meets nearlyall the needs of a very energy-efficient home could cost $16,000 to $20,000 installed, or $8 to $10 perwatt. At the high end, a 5-kilowattsystem that completely meets theenergy needs of many conventional

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homes can cost $30,000 to $40,000installed, or $6 to $8 per watt. Theseprices are rough estimates; your costs depend on your system's con-figuration, your equipment options,and other factors. Your local PVproviders can give you more accurateestimates or bids.

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

Calculating Electricity Bill Savings for a Net-Metered PV System• Determine the system's size in kilowatts (kW). A reasonable range is from

1 to 5 kW. This value is the “kW of PV” input for the equations below.

• Based on your geographic location, select the energy production factor from the map below for the “kWh/kW-year” input for the equations.

Energy from the PV system = (kW of PV) x (kWh/kW-year) = kWh/year

Divide this number by 12 if you want to determine your monthly energy reduction.

Energy bills savings = (kWh/year) x (Residential Rate)/100 = $/year saved

(Residential Rate in this above equation should be in dollars per kWh; for example,a rate of 10 cents per kWh is input as $0.10/kWh.)

For example, a 2-kW system in Denver, CO, at a residential energy rate of$0.07/kWh will save about $266 per year: 1,900 kWh/kW-year x $0.07/kWh x 2 kW = $266/year.

Note: The uncertainty of thecontoured values is generally ±10%.In mountainous and other areas ofcomplex terrain, the uncertainty maybe higher.

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investments. But most of the options will be familiar to you.

The best way to finance PV systemsfor homes is through a mortgageloan. Mortgage financing optionsinclude your primary mortgage; asecond mortgage, such as a U.S.Department of Housing and UrbanDevelopment (HUD) Title 1 loan; ora home-equity loan that is securedby your property. There are twoadvantages to mortgage financing.First, mortgage financing usually pro-vides longer terms and lower interestrates than other loans, such as con-ventional bank loans. Second, theinterest paid on a mortgage loan isgenerally deductible on your federaltaxes (subject to certain conditions).If you buy the PV system for yourhome at the same time that youbuild, buy, or refinance the home,adding the cost of the PV system toyour mortgage loan is likely to be

relatively simple. It is also one way to avoid additional loan applicationforms and fees.

If mortgage financing is not avail-able, look for other sources of fin-ancing, such as conventional bankloans. Seek the best possible combi-nation of low rate and long term.This allows you to amortize your PVsystem as inexpensively as possible.Because your PV system is a long-term investment, the terms and conditions of your financing are likely to be the most important factor in determining the effectiveprice of your PV-generated power.

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

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Who sells and installs PVsystems?In some areas, finding a PV providercan be as simple as picking up thetelephone directory and lookingunder “Solar Energy Equipment andSystems—Dealers.” However, many of the listings are solar water-heatingcompanies and many companiesmight not be experienced in PV sys-tem design or installation. Similarly,many electrical contractors, althoughproficient in typical electrical con-tracting work, might not have expert-ise in PV or residential roof-mountingtechniques. How do you identify solarelectric system providers? Here are several suggestions.

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

• Contact the Solar Energy IndustriesAssociation (SEIA) at 202-628-7745for a list of solar service providers.

• Contact your utility company to see which vendors it might recommend.

• Conduct a search on the Internet.

Reputable, professional contractorswith experience in PV systems arethe best choice for the actual installation.

How do you choose amongPV providers?Compile a list of prospective PVproviders. (Those closest to you

should have the lowest travel costs).Contact these providers and find outwhat products and services they offer.The following questions may give youa good sense of their capabilities:

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

Experience in installing grid-connected systems is valuablebecause some elements of the instal-lation—particularly interconnectionwith the local utility—are unique to these systems. Because grid-connected systems are relativelyuncommon, however, most contrac-tors with PV experience have workedonly on stand-alone systems. So,they have experience with all aspectsof PV system installation exceptconnection with the utility grid.However, a competent company with PV experience should not beeliminated just because it has not yet installed grid-connected PV.Experience with off-grid systems isvaluable, because grid-independentsystems are more technically com-plex than grid-tied systems.

How many years of experiencedoes the company have installingPV systems?

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

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Is the company properly licensed?

PV systems should be installed by an appropriately licensed contractor.This usually means that either theinstaller or a subcontractor has anelectrical contractor's license. YourState Electrical Board can tell youwhether a contractor has a valid electrician's license. Local buildingdepartments might also require thatthe installer have a general contrac-tor's license. Call the city or countyyou live in for additional informa-tion on licensing.

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

• Possession of a solar contractor specialty license, issued by a localbuilding jurisdiction, that recog-nizes—through testing or othermeans—special knowledge of PVsystems

• Certification in PV systems by agroup such as the state chapter of SEIA

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

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

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

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

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

Similarly, some PV modules generatemore electricity per square foot thanothers. Bids should clearly state themaximum generating capacity of thesystem (measured in watts or kilo-watts). If possible, have the bids spec-ify the system capacity in “AC watts”under a standard set of test condi-tions, or specify the output of thesystem at the inverter.

Also request an estimate of theamount of energy that the systemwill produce on an annual basis(measured in kilowatt-hours).Because the amount of energydepends on the amount of sun-light—which varies by location, sea-son, and year to year—it’s unlikelythe contractor will quote a specificfigure, but a range of ±20% is realis-tic. Bids also should include the totalcost of getting the PV system up andrunning, including hardware, instal-lation, connection to the grid, per-mitting, sales tax, and warranty.

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

Is the lowest price the “bestdeal”?It might not be. You generally getwhat you pay for, and it's possiblethat a low price could be a sign ofinexperience. Companies that planto stay in business must chargeenough for their products and services to cover their costs, plus afair profit margin. Therefore, priceshould not be the only considera-tion, and quality should probablyrank high on the list.

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What should you know aboutpermits?If you live where a homeowners asso-ciation must approve a solar electricsystem, you or your PV provider mayneed to submit your plans. You’llneed approval before you begininstalling your PV system. However,some state laws stipulate that youhave the right to install a solar electric system on your home.

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

However, in some cases, your PVprovider may not know how muchtime or money will be involved in“pulling” a permit. If so, this taskmay be priced on a time-and-materi-als basis, particularly if additionaldrawings or calculations must be provided to the permitting agency. In any case, make sure the permit-ting costs and responsibilities areaddressed at the start with your PVprovider before installation begins.

Code requirements for PV systemsvary somewhat from one jurisdictionto the next, but most are based onthe National Electrical Code (NEC).Article 690 in the NEC spells outrequirements for designing andinstalling safe, reliable, code-compliantPV systems. Because most localrequirements are based on the NEC,your building inspector is likely to

rely on Article 690 for guidance indetermining whether your PV systemhas been properly designed andinstalled. If you are one of the firstpeople in your community to installa grid-connected PV system, yourlocal building department may nothave experience in approving one of these systems. If this is the case,you and your PV provider can speedthe process by working closely withbuilding officials to bring them up to speed on the technology.

What should you know aboutinsurance?For grid-connected PV systems, yourelectric utility will require that youenter into an interconnection agree-ment (see also the next section).Usually, these agreements set forth theminimum insurance requirements tokeep in force. If you are buying a PVsystem for your home, your standardhomeowner’s insurance policy is usually adequate to meet the utility’srequirements. However, if insurancecoverage becomes an issue, contactone of the groups listed in the GettingHelp section.

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

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

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

The language in these contractsshould be simple, straightforward,and easy to understand. If you areunclear about your obligations underthese agreements, contact the utilityor your electrical service provider forclarification. If your questions arenot answered adequately, contactone of the groups in the GettingHelp section.

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

• Institute of Electrical and ElectronicEngineers, P929: Recommended

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

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

You don’t need to fully understandthese standards, but your PV providerand utility should. It is your obliga-tion to make sure that your PVprovider uses equipment that com-plies with the relevant standards,however, so be sure to discuss thisissue.

How do you get a net-metering agreement?Some utilities offer customers withPV systems the option to net meterthe excess power generated by the PV system. As noted, this means thatwhen the PV system generates morepower than the household can use,the utility pays the full retail price for this power in an even swap as theelectric meter spins backward, andyour PV power goes into the grid.

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

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For example, in one utility program,customers are billed monthly for the“net” energy consumed. If the cus-tomer’s net consumption is negativein any month (i.e., the PV systemproduces more energy than the cus-tomer uses), the balance is creditedto subsequent months. Once a year,on the anniversary of the effectivedate of the interconnection agree-ment, the utility pays the customerfor any negative balance at its whole-sale or “avoided cost” for energy,which may be quite small, perhapsless than 2 cents per kilowatt-hour.

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

Under the federal Public UtilityRegulatory Policies Act (PURPA), utili-ties must allow you to interconnectyour PV system. They must also buyany excess electricity you generate,beyond what you use in your home orbusiness. If your utility does not offernet metering, it will probably requireyou to use two meters: one to measurethe flow of electricity into the build-ing, the other to measure the flow ofelectricity out of the building. If netmetering is not available, the utilitywill pay you only a wholesale rate foryour excess electricity. This provides astrong incentive to use all the electrici-ty you generate so that it offsets elec-tricity you would otherwise have topurchase at the higher retail rate. Thismay be a factor in how you optimize

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

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

What should you know aboutwarranties?Warranties are key to ensuring thatyour PV system will be repaired ifsomething should malfunction dur-ing the warranty period. PV systemseligible for some solar rebate pro-grams must carry a full (not “limit-ed”) two-year warranty, in additionto any manufacturers’ warranties onspecific components. This warrantyshould cover all parts and labor,including the cost of removing anydefective component, shipping it tothe manufacturer, and reinstallingthe component after it is repaired or replaced. The rebate program’stwo-year warranty requirementsupersedes any other warranty limitations. In other words, even ifthe manufacturer’s warranty on aparticular component is less than

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

Be sure you know who is responsiblefor honoring the various warrantiesassociated with your system—theinstaller, the dealer, or the manufac-turer. The vendor should disclose thewarranty responsibility of each party.

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

Getting HelpFor more information on solar electricsystems, please contact:

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

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

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

This Web site has a listing of state Public Utility Commissions that you may contact.

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

The Solar Energy Industries Association is the national trade association of thesolar industry. Many states have a statechapter of the national SEIA organiza-tion, which can be found on SEIA’s Web site.

Other helpful Web sites

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

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

Million Solar Roofs: www.millionsolar-roofs.com

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

About the Office of Energy Efficiency and Renewable Energy

A Strong Energy Portfolio for a Strong AmericaEnergy efficiency and clean, renewable energy will mean a stronger economy, acleaner environment, and greater energy independence for America. By investing intechnology breakthroughs today, our nation can look forward to a more resilienteconomy and secure future.

Far-reaching technology changes will be essential to America's energy future.Working with a wide array of state, community, industry, and university partners,the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energyinvests in a portfolio of energy technologies that will:

• Conserve energy in the residential, commercial, industrial, government, and transporta-tion sectors

• Increase and diversify energy supply, with a focus on renewable domestic sources• Upgrade our national energy infrastructure • Facilitate the emergence of hydrogen technologies as vital new "energy carriers."

The Opportunities

Biomass Program—Using domestic, plant-derived resources to meet our fuel,power, and chemical needsBuilding Technologies Program—Homes, schools, and businesses that use lessenergy, cost less to operate, and, ultimately, generate as much power as they useDistributed Energy & Electric Reliability Program—A more reliable energyinfrastructure and reduced need for new power plantsFederal Energy Management Program—Leading by example, saving energyand taxpayer dollars in federal facilitiesFreedomCAR & Vehicle Technologies Program—Less dependence on foreignoil, and eventual transition to an emissions-free, petroleum-free vehicleGeothermal Technologies Program—Tapping the Earth's energy to meet our heat and power needsHydrogen, Fuel Cells & Infrastructure Technologies Program—Paving theway toward a hydrogen economy and net-zero carbon energy futureIndustrial Technologies Program—Boosting the productivity and competitivenessof U.S. industry through improvements in energy and environmental performanceSolar Energy Technology Program—Utilizing the sun's natural energy to generate electricity and provide water and space heating Weatherization & Intergovernmental Program—Accelerating the use of today'sbest energy-efficient and renewable technologies in homes, communities, and businessesWind & Hydropower Technologies Program—Harnessing America's abundantnatural resources for clean power generation

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

The National Renewable Energy Laboratory,a DOE national laboratory, produced this Consumer’s Guide for:

U.S. Department of EnergyOffice of Energy Efficiency and Renewable Energy1000 Independence Avenue, S.W.Washington, D.C. 20585

December 2003 • DOE/GO-102003-1844