The cost of utility discretion on residential solar requirements

This paper reviews state and utility interconnection rules for residential solar to determine what safety equipment is required by state and utilities. This study finds that most states allow utilities’ discretion on equipment requirements for residential solar arrays. Oftentimes, utilities with discretion will require technically unnecessary equipment, such as an external disconnect switch, that increases the cost of the solar array to the customer. With this information, this paper calculates the costs of external disconnect switch requirements using estimated residential solar capacity and customer counts in each state. Based on a review of over 200 utility policies that cover more than 70% of U.S. electricity customers, most utilities require or strongly recommend an external disconnect switch. Revising these policies would have avoided $413 million in extra, unnecessary costs for home PV systems in the U.S. thus far. Based on future projections of residential solar growth to 2050, eliminating these regulations would save $3.7 billion for customer-generators across the country.