By: David Sarkisian, Principal Policy Analyst

The basic model for interconnection of distributed generation (DG) customers has historically involved the customer exporting electricity to the grid, as with net-metered systems. In recent years, however, as in some states the value of traditional net metering has declined and as energy storage has become more common in the DG market, some customers are choosing to not export power and instead use their systems solely to supply their own load. States and utilities are adopting new interconnection rules for customers that choose this route, typically expediting the usual interconnection process due to non-exporting systems having smaller grid impacts.

Non-Exporting Distributed Generation Tariffs

Rules for interconnection of DG systems have typically assumed that these systems will (at least part of the time) be exporting electricity to the grid, as with net-metered systems that offset electricity supplied by the grid with electricity generated at other times. Exporting energy to the grid means that both the DG system and its accompanying grid point must be equipped to handle those exports, which means that interconnection rules must consider these requirements.

However, as energy storage has become more common in the DG market, some DG systems now optimally operate without ever exporting power to the grid, instead solely supplying the customer’s behind-the-meter load. In some cases, systems without energy storage can also be non-exporting, if, for instance, the DG capacity is much smaller than the customer’s base load. Several states have adopted interconnection rules for DG systems that do not export any electricity to the grid. In some cases, there are also rules for systems with limited exports or export controls. Export control techniques may include reverse power protection, minimum power protection, relative distributed energy resource rating, directional power protection, configured power rating, and power control systems (PCS). Systems may also create “inadvertent” exports if a system that is normally geared not to export electricity inadvertently exports for a brief period due to fluctuations in load. Interconnection rules for zero, inadvertent, or limited-export systems typically provide some advantage in terms of interconnection cost or time for review, as technical grid requirements are lessened for these systems.

Models for Interconnecting Non-Exporting Systems

The Building a Technically Reliable Interconnection Evolution for Storage (BATRIES) project (led by the Interstate Renewable Energy Council (IREC)) has published a toolkit for energy storage interconnection that discusses some state procedures for interconnection of non-exporting systems. States typically follow one of three models for recognizing non-export and export-limiting systems in interconnection rules.

The first model is the Federal Energy Regulatory Commission (FERC)’s Small Generator Interconnection Procedures (SGIP), which do not contain any differentiation of rules for non-export and export-limiting systems. Several states follow this model, including North Carolina and Ohio. The second model has a distinct review tier for non-exporting systems, but does not identify what methods of export control are acceptable specifically. The third model includes a distinct screen for non-exporting projects, identifying what methods of export control are acceptable to qualify as non-export.

As of the time of the publication of the BATRIES toolkit, none of the models specifically considered limited-export systems. However, as of September 2024, California’s and several other states’ rules do include provisions for limited-export systems.

State Examples

California

One example of a state with special provisions for non-exporting systems is California. California’s Rule 21 governing interconnection allows for a fast track interconnection process for energy storage systems that are configured to not export to the grid. Rule 21 also contains provisions for inadvertent export systems and limited-export systems with inadvertent exports. The rules specify what types of export control technologies are necessary to comply with the requirements.

States other than California that include interconnection provisions for non-export systems include Arizona, Colorado, Hawaii, Illinois, Maryland, Minnesota, and Nevada.

Arizona

In Arizona, non-exporting systems or inadvertent export systems with a capacity of 20 kW or less are eligible for expedited interconnection review. Systems must have control technologies certified by a Nationally Recognized Testing Laboratory (NRTL) in order to qualify as non-exporting systems.

Colorado

Non-exporting DG systems, including systems with some inadvertent exports, are eligible for a special interconnection track. Interconnection requests must specify the type of power control system (PCS) used to prevent exports.

Hawaii

The Hawaiian Electric Company (HECO) utilities offer a tariff option called Smart Renewable Energy Non-Export. Under this program, non-exporting systems are eligible for expedited review even in areas with voltage limitations. Customers installing non-exporting systems complete a different interconnection review process than those with exporting systems.

Illinois

Illinois’ interconnection standards include a list of technologies acceptable for export control for both non-exporting and limited-export systems. Illinois’ rules limit the nameplate capacity of these systems to what can actually be exported for the purposes of interconnection review.

Maryland

Maryland’s interconnection rules qualify DG systems for a certain level of interconnection review if they use reverse power relays to prevent export of electricity to the distribution grid. This applies even for larger systems up to 10 MW.

Minnesota

Minnesota’s interconnection rules include provisions for both non-exporting and limited-export DG systems. Similarly to Illinois’s rules, power control systems that limit export capacity reduce the nameplate capacity of the systems for interconnection purposes.

Nevada

NV Energy’s interconnection rules specify that non-exporting systems must use one of five technology options to ensure that exports, other than inadvertent exports, do not occur. Passing this test qualifies the system for simplified interconnection review and avoids the need for an interconnection study.

Table: Examples of State Rules on Interconnection of Non-Exporting and Limited-Export Systems

Conclusion

As energy storage has become more common in the DG market and the value of traditional net metering has declined, some customers are seeking to operate DG systems that do not export electricity, instead using their systems entirely to meet their own load. States are revising interconnection rules to make it easier to interconnect DG systems that do not export power, or export limited amounts of power, to the grid. States in some cases specify particular technologies that must be used to ensure systems are non-exporting, while other states have not yet addressed non-exporting systems in their interconnection rules. With continued growth in the use of behind-the-meter battery storage, more states may adopt interconnection rule changes that expedite interconnection of non-exporting systems.