Solar 101

Solar Utility Requirements

It’s a common myth that going solar will somehow negate or replace your connection to the electrical grid. A home that functions “off the grid” is not dependent on public utilities, including electricity.

In truth, most solar-powered homes remain connected to the electrical grid so you have access to electricity when the sun goes down or when you use more energy than your panels are able to produce. 

This means that you will still receive a utility bill after your solar panels are installed—though your energy usage and costs will be offset by the solar energy your panels produce.

A Day With Grid-Tied Solar

To understand why your home will remain connected to the electricity grid, let’s look at a sample day in the life of a solar homeowner. 

Solar Power Grid Power
8 a.m. The sun is above the horizon.

Your panels produce the power needed for your morning routine.
12 p.m. The sun is high in the sky!

Your panels are producing more energy than you need.		 The excess power is fed back to the grid.
4 p.m. The sun is low in the sky when you get home.

Your panels are still producing power but not enough for dinner, homework, and all the evening activities.		 You supplement your solar power with energy from the grid.
8 p.m. The sun has set. Any energy used after sunset and before sunrise will come from the grid.

What is the Electrical Grid?

The electrical grid (also called the electric, electricity, or power grid) is a massive, interconnected network of facilities and equipment that create and supply electricity for homeowners, businesses, and industrial operations alike. 

Electricity is distributed across this network with a goal to continuously balance supply and demand, also known as production and consumption. When supply exceeds demand, the excess energy must be sold, converted, or otherwise disposed of—often resulting in waste. When demand exceeds supply, it can create disruptions in power such as brownouts or blackouts.

Who owns the grid?

While the federal government oversees aspects of grid maintenance and management, the majority of the power that is generated and disturbed through the electrical grid is owned by private, investor-led, or cooperative utilities like your local electricity provider. 

How does it work?

There are three key functions of the electrical grid: 

  • Generation
    Most of the energy available through the grid today is generated by natural gas and coal, followed by nuclear, renewables, and hydropower. Electricity generation includes everything from large-scale power plants, to wind farms, hydroelectric dams, and (yes!) your rooftop solar energy system.
  • Transmission
    The electricity must be modified to travel over long distances at high voltages and is then transmitted across the grid to where it is needed. This is where power lines, substations, and transformers come in. 
  • Distribution
    After reaching a local substation and passing through a switch tower, grid energy is distributed to end users through smaller electrical power lines. When it reaches a specific home or business, an on-site electrical meter records the electricity coming in. This usage is then billed to the consumer.

Can you go “off-grid” with solar?

Wherever public utilities are available, we recommend maintaining a connection to the power grid. This allows you to source power from both your electricity provider and your solar panels depending on your usage needs relative to the power generated by your solar array. 

Homeowners who wish to function “off the grid,” whether by necessity or choice, typically require a larger solar array and the addition of a generator and/or solar battery storage.

Utility Approval and Requirements

Because your home will remain connected to the electrical grid, your solar installation requires approval from your electricity provider. There are three checkpoints to be aware of:

  • System Requirements
  • Interconnection Requirements
  • Permission to Operate

These requirements can change regularly based on grid capacity, state and local regulations, internal systems, and other variables. At Palmetto, we have a dedicated Interconnection Team that maintains accurate information for every utility company we work with to avoid delays in the solar installation process. 

System Requirements

The system requirements set forth by your utility provider function as parameters in the solar design process. While system requirements will vary across markets and providers, they can generally be broken down into three categories:

  • Size Limitations restrict the size or energy production capacity of your solar energy system as measured in kilowatts (kW). This number is calculated by multiplying the panel rating by the number of panels.
  • Offset Restrictions limit the percentage of your household energy consumption that can be offset by the addition of your solar panel system. If you have a maximum allowable offset of 100%, you cannot install a solar energy system that will produce more energy than you currently use.
  • Insurance Requirements state that a homeowner must meet minimum requirements for general liability insurance in order to move forward with an installation, and may include a tiered system through which larger solar installations have higher insurance requirements.

Interconnection 

Utility Approval or “Interconnection” is the process through which a solar customer (or, in this case, their provider) applies for and receives permission from their utility company to proceed with a solar installation. 

To initiate the process, Palmetto will submit an Interconnection application to your utility provider that outlines your energy usage, roof specifications, and the engineering design of your solar energy system. Once submitted, we'll work with your utility provider to finalize the approval so we can schedule your installation. 

If your electricity company requires that homeowners be involved in the Interconnection process—often by providing a signature, proof of insurance, or additional documentation—Palmetto will alert you to the requirements in your area and guide you through the process.

Permission to Operate

After your solar installation is complete and has passed required inspections, Palmetto will apply for “Permission to Operate” from your utility provider. This is the final step before you can activate your system and start producing power. 

Like Interconnection, the requirements for Permission to Operate will vary by utility provider and may include an application, installation photos, a signature from the account holder, further documentation, or an on-site inspection. In most cases, a representative will visit your home to ensure that your solar energy system meets safety and metering guidelines, and to install a new bi-directional energy meter capable of tracking both the energy you produce and the energy you use. 

Why is Utility Approval Required?

Remember that one of the primary objectives of grid management is to balance supply and demand, or energy production and consumption. When you add solar panels to your home, any excess energy you produce will be fed back to the grid, becoming part of the total electricity supply. 

For this reason, your utility provider needs to know how much energy your solar system will produce, and how this will impact your total energy consumption. The pre- and post-installation requirements support the safety of your home, your solar energy system, and the larger electricity grid.

Utility Rates and Metering Programs

As a general rule: The more power you source from your solar panels, the more money you will save on your electricity bill. While a larger system can produce more power and offset a greater percentage of your energy needs with clean, solar energy, the financial benefit you see from that offset is directly tied to the electricity rates and metering programs in your area. Two of the most common rate programs that can benefit solar homeowners are Net Metering and Time-of-Use Rates. 

Net Metering

If you’re in an area with Net Metering Rates or Net Energy Metering (NEM), any energy that is produced by your solar power system and not used in your home will be sent back to the grid and earn you credit on your energy bill. Your utility bill will then be calculated based on the energy you consume from the grid less any credits you’ve earned from the excess energy you produced, allowing you to further offset your electricity costs. 

Time-of-Use Rates

If you’re in an area with Time-of-Use Rates, your electricity fees are structured to increase during peak usage hours and decrease during low usage or off-peak hours. In this case, a solar power storage system may be an easy way to save money on your monthly electricity costs by allowing you to tap into stored energy when rates go up, and rely on grid power when rates are low.

How to Access Net Metering Programs

If net metering programs are available in your area, registration is typically included in the Interconnection application process. Your electricity bill will then automatically adjust once you receive Permission to Operate and begin producing power.   

In select areas of the U.S., electricity providers are required to offer multiple rate plan options—giving homeowners more control of their solar energy savings. While rate programs will vary by provider, we can help you compare the options and select the right program for your needs.

Browse Solar 101 Topics

Use the links below to navigate through Solar 101 topics and resources. Please direct any questions to [email protected].

Help us improve our Support Center! Was this article helpful?

Solar Utility Requirements

It’s a common myth that going solar will somehow negate or replace your connection to the electrical grid. A home that functions “off the grid” is not dependent on public utilities, including electricity.

In truth, most solar-powered homes remain connected to the electrical grid so you have access to electricity when the sun goes down or when you use more energy than your panels are able to produce. 

This means that you will still receive a utility bill after your solar panels are installed—though your energy usage and costs will be offset by the solar energy your panels produce.

A Day With Grid-Tied Solar

To understand why your home will remain connected to the electricity grid, let’s look at a sample day in the life of a solar homeowner. 

Solar Power Grid Power
8 a.m. The sun is above the horizon.

Your panels produce the power needed for your morning routine.
12 p.m. The sun is high in the sky!

Your panels are producing more energy than you need.		 The excess power is fed back to the grid.
4 p.m. The sun is low in the sky when you get home.

Your panels are still producing power but not enough for dinner, homework, and all the evening activities.		 You supplement your solar power with energy from the grid.
8 p.m. The sun has set. Any energy used after sunset and before sunrise will come from the grid.

What is the Electrical Grid?

The electrical grid (also called the electric, electricity, or power grid) is a massive, interconnected network of facilities and equipment that create and supply electricity for homeowners, businesses, and industrial operations alike. 

Electricity is distributed across this network with a goal to continuously balance supply and demand, also known as production and consumption. When supply exceeds demand, the excess energy must be sold, converted, or otherwise disposed of—often resulting in waste. When demand exceeds supply, it can create disruptions in power such as brownouts or blackouts.

Who owns the grid?

While the federal government oversees aspects of grid maintenance and management, the majority of the power that is generated and disturbed through the electrical grid is owned by private, investor-led, or cooperative utilities like your local electricity provider. 

How does it work?

There are three key functions of the electrical grid: 

  • Generation
    Most of the energy available through the grid today is generated by natural gas and coal, followed by nuclear, renewables, and hydropower. Electricity generation includes everything from large-scale power plants, to wind farms, hydroelectric dams, and (yes!) your rooftop solar energy system.
  • Transmission
    The electricity must be modified to travel over long distances at high voltages and is then transmitted across the grid to where it is needed. This is where power lines, substations, and transformers come in. 
  • Distribution
    After reaching a local substation and passing through a switch tower, grid energy is distributed to end users through smaller electrical power lines. When it reaches a specific home or business, an on-site electrical meter records the electricity coming in. This usage is then billed to the consumer.

Can you go “off-grid” with solar?

Wherever public utilities are available, we recommend maintaining a connection to the power grid. This allows you to source power from both your electricity provider and your solar panels depending on your usage needs relative to the power generated by your solar array. 

Homeowners who wish to function “off the grid,” whether by necessity or choice, typically require a larger solar array and the addition of a generator and/or solar battery storage.

Utility Approval and Requirements

Because your home will remain connected to the electrical grid, your solar installation requires approval from your electricity provider. There are three checkpoints to be aware of:

  • System Requirements
  • Interconnection Requirements
  • Permission to Operate

These requirements can change regularly based on grid capacity, state and local regulations, internal systems, and other variables. At Palmetto, we have a dedicated Interconnection Team that maintains accurate information for every utility company we work with to avoid delays in the solar installation process. 

System Requirements

The system requirements set forth by your utility provider function as parameters in the solar design process. While system requirements will vary across markets and providers, they can generally be broken down into three categories:

  • Size Limitations restrict the size or energy production capacity of your solar energy system as measured in kilowatts (kW). This number is calculated by multiplying the panel rating by the number of panels.
  • Offset Restrictions limit the percentage of your household energy consumption that can be offset by the addition of your solar panel system. If you have a maximum allowable offset of 100%, you cannot install a solar energy system that will produce more energy than you currently use.
  • Insurance Requirements state that a homeowner must meet minimum requirements for general liability insurance in order to move forward with an installation, and may include a tiered system through which larger solar installations have higher insurance requirements.

Interconnection 

Utility Approval or “Interconnection” is the process through which a solar customer (or, in this case, their provider) applies for and receives permission from their utility company to proceed with a solar installation. 

To initiate the process, Palmetto will submit an Interconnection application to your utility provider that outlines your energy usage, roof specifications, and the engineering design of your solar energy system. Once submitted, we'll work with your utility provider to finalize the approval so we can schedule your installation. 

If your electricity company requires that homeowners be involved in the Interconnection process—often by providing a signature, proof of insurance, or additional documentation—Palmetto will alert you to the requirements in your area and guide you through the process.

Permission to Operate

After your solar installation is complete and has passed required inspections, Palmetto will apply for “Permission to Operate” from your utility provider. This is the final step before you can activate your system and start producing power. 

Like Interconnection, the requirements for Permission to Operate will vary by utility provider and may include an application, installation photos, a signature from the account holder, further documentation, or an on-site inspection. In most cases, a representative will visit your home to ensure that your solar energy system meets safety and metering guidelines, and to install a new bi-directional energy meter capable of tracking both the energy you produce and the energy you use. 

Why is Utility Approval Required?

Remember that one of the primary objectives of grid management is to balance supply and demand, or energy production and consumption. When you add solar panels to your home, any excess energy you produce will be fed back to the grid, becoming part of the total electricity supply. 

For this reason, your utility provider needs to know how much energy your solar system will produce, and how this will impact your total energy consumption. The pre- and post-installation requirements support the safety of your home, your solar energy system, and the larger electricity grid.

Utility Rates and Metering Programs

As a general rule: The more power you source from your solar panels, the more money you will save on your electricity bill. While a larger system can produce more power and offset a greater percentage of your energy needs with clean, solar energy, the financial benefit you see from that offset is directly tied to the electricity rates and metering programs in your area. Two of the most common rate programs that can benefit solar homeowners are Net Metering and Time-of-Use Rates. 

Net Metering

If you’re in an area with Net Metering Rates or Net Energy Metering (NEM), any energy that is produced by your solar power system and not used in your home will be sent back to the grid and earn you credit on your energy bill. Your utility bill will then be calculated based on the energy you consume from the grid less any credits you’ve earned from the excess energy you produced, allowing you to further offset your electricity costs. 

Time-of-Use Rates

If you’re in an area with Time-of-Use Rates, your electricity fees are structured to increase during peak usage hours and decrease during low usage or off-peak hours. In this case, a solar power storage system may be an easy way to save money on your monthly electricity costs by allowing you to tap into stored energy when rates go up, and rely on grid power when rates are low.

How to Access Net Metering Programs

If net metering programs are available in your area, registration is typically included in the Interconnection application process. Your electricity bill will then automatically adjust once you receive Permission to Operate and begin producing power.   

In select areas of the U.S., electricity providers are required to offer multiple rate plan options—giving homeowners more control of their solar energy savings. While rate programs will vary by provider, we can help you compare the options and select the right program for your needs.

Browse Solar 101 Topics

Use the links below to navigate through Solar 101 topics and resources. Please direct any questions to [email protected].

Help us improve our Support Center! Was this article helpful?