Interconnection Standards

Non- Technical Interconnection Issues  

California’s interconnection standards for distributed generation (DG) and renewable resources have evolved over the past four years, culminating the current version of "Rule 21," which was formally issued December 2000. Rule 21 specifies the technical interconnection rules for all DG under 10 MW, including renewables, with separate simplified rules for small renewables under 10 kW. Rule 21 is a utility tariff; thus, each of the three major IOUs -- Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company (SCE) -- have filed their own Rule 21 tariffs with the California Public Utilities Commission (CPUC), although each is essentially the same.

Technical Requirements for Interconnection

Small PV and Wind Under 10 kW  

PV and wind systems under 10 kW qualify for net metering and Simplified Interconnection, whereby no supplemental review or interconnection studies are necessary. Such systems must comply with the requirements in National Electrical Code Article 690 and UL 1741. Note that while utilities must provide a bi-directional meter for net-metered systems, system owners taking advantage of net metering with time-of-use metering must pay for the meter.

Large DG Systems up to 10 MW  

As an outcome of the SRP, systems may be permitted to undergo "Simplified Interconnection" with some additional requirements, or where one or more screens are not passed, the system must undergo a formal Interconnection Study, for which the costs are determined by the utility and borne by the system owner. The process is illustrated graphically on the California Energy Commission’s (CEC) DER interconnection site, where links are also provided to on-line applications for SCE and SDGE customers. Interestingly, the CEC site also lists current statistics on the number of DER systems interconnected for each of the three IOUs.

Technical requirements for DG installations mirror those established in IEEE 1547, including requirements regarding flicker, harmonics, voltage and frequency fluctuations, islanding, DC injection, and protection devices. Now that the IEEE 1547 standard has been formally adopted, portions of the new standard are expected to be incorporated into the California standards. As of November 2004, advice letters addressing IEEE 1547 incorporation have been issued, and approval is pending. It is important to note that IEEE 1547 will not supersede Rule 21, given that Rule 21 has a wider scope and is more specific in many instances than IEEE 1547.

In parallel to the technical and procedural processed developed as part of Rule 21, the California Public Utilities Commission also investigated and ruled on rate design issues for standby generators. The final ruling can be found on the CPUC site. With regard to exit fees in particular, the CPUC ruled in 2003 that systems smaller than 1 MW that are net metered and/or eligible for CPUC or CEC incentives for being clean and super-clean are fully exempt from any exit fee surcharge. This includes many solar and wind systems, as well as fuel cells.  

Further information may be obtained by contacting Scott Tomashefsky of the CEC at (916) 654-4896 or by contacting the following utilities: 

San Diego Gas and Electric
Mike Iammarino (858) 650-6166

Southern California Edison 
Tom Dossey (626) 302-8242

Pacific Gas and Electric Company
Generator Hotline (415) 972-5676

Personal Tax Credit (wind or solar)

California's Solar or Wind Energy System Credit (SB17x2) was approved by the Governor on October 8, 2001. The law provides personal and corporate income tax credits for the purchase and installation of photovoltaic or wind driven systems with a peak generating capacity of up to 200 kilowatts. After January 1, 2004 and before January 1, 2006, the tax credit is equal to 7.5% of the net installed system cost after deducting the value of any municipal, state, or federal sponsored financial incentives, or $4.50 per watt of rated peak generating capacity, whichever is less.

The official tax form, a calculation worksheet, and additional information are available through the California Energy Commission.

Corporate Tax Credit (wind or solar)

California's Solar or Wind Energy System Credit (SB17x2) was approved by the Governor on October 8, 2001. The law provides personal and corporate income tax credits for the purchase and installation of photovoltaic or wind driven systems with a peak generating capacity of up to 200 kilowatts. After January 1, 2004 and before January 1, 2006, the tax credit is equal to 7.5% of the net installed system cost after deducting the value of any municipal, state, or federal sponsored financial incentives, or $4.50 per watt of rated peak generating capacity, whichever is less.

The California Franchise Tax Board (FTB) administers the program in consultation with the California Energy Commission (Commission). The solar or wind system must be certified by the Commission. A five-year warranty is required of each system. Taxpayers claiming the credit cannot sell the electricity produced by the system, but may utilize California’s net metering law, if eligible.

California form FTB 3508 must be completed and attached to your California tax return. The Solar or Wind Energy System Credit Worksheet can be used to determine the tax credit amount. These form are available on the Commission's Website.

CEC Emerging Renewables Buy-Down Programs

The California Energy Commission’s Emerging Renewables Program (ERP) provides incentives for the purchase of four types of grid-connected renewable energy generating
systems - photovoltaics, solar thermal electric systems, fuel cells using renewable fuels, and small wind turbines (50 kW or less).  

This program is offered to all grid-connected utility customers within the electric utility service areas of: Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Southern California Water Company (doing business as Bear Valley Electric Service (BVE))  

Beginning January 1, 2005, the rebate amounts for wind are as follows:
$1.70/W for first 7.5 kW and $0.70/W for increments >7.5 kW up to 30 kW

Rebates for owner-installed systems are further discounted by 15 percent. The rebate levels for all technology types will continue to be reduced by $0.20/W every six months (every January 1st and July 1st).  

Note that wind systems up to 50 kW in size may participate, but the rebates for such systems are limited to less than 30 kW.  

Incentives received from sources other than this program, such as other utility incentive programs, a State of California sponsored incentive program, or a federal government sponsored incentive program, other than tax credits, will reduce the amount of the Emerging Renewables rebate by fifty percent (50%) of other incentives received or expected.  

The following system requirements apply:  

• Must be grid connected. 
• Electricity production is not to exceed 200% of the site's historical or current electricity needs. 
• The equipment retailer must provide a 5-year warranty. 
• Systems/components must meet national standards. 
• Only new equipment is eligible. 
• Systems must be installed by licensed contractors or owner-installed. 
• All systems must be installed with a performance meter.
• System audits will be conducted by the Energy Commission.

Applicants are responsible for all costs associated with the purchase and installation of an approved revenue-quality meter and must make arrangements with their electric utility for the meter’s installation.

As of January 2005, over 11,000 new systems have been installed since the rebate program began in 1998.

Contact:
Energy Call Center
California Energy Commission
Emerging Renewables (Rebate) Program
1516 9th Street MS-45
Sacramento, CA 95814-5512
Phone: (800) 555-7794
Fax: (916) 654-4420
E-Mail: renewable@energy.state.ca.us
Web site: http://www.consumerenergycenter.org/

Supplemental Energy Payments (SEPs)

Production incentives, referred to as supplemental energy payments (SEPs), will be awarded to eligible renewable generation for the above market costs of eligible procurement by investor owned utilities to fulfill their Renewable Portfolio Standard (RPS) obligations. The investor-owned utilities are: PG&E, SDG&E, and SCE. These payments are required by SB 1038 and SB 1078 of 2002, with funding availability of approximately $70 million per year collected for five years from a public goods charge. Only projects selected through competitive solicitations are eligible. SEPs are not available to a facility owned by an electrical corporation or a local publicly-owned electric utility. Facilities must begin commercial operations on or after January 1, 2002 or be repowered and re-commence operation on or after January 1, 2002, and meet other fuel specific and electricity delivery criteria.

The generators do not apply for the SEPs, but may be awarded SEPs from the Energy Commission if they successfully compete in an RPS solicitation. Once the IOUs have received bids and selected a tentative "short list" of winners, the California Public Utilities Commission will announce the market price referent (MPR). The MPR is the levelized, cent-per-kWh price of a comparable long-term, natural gas electricity product. The MPR also represents a dividing line that used to determine SEPs:  

• Bid prices at or below the MPR may be accepted as per se reasonable to the CPUC;  

• Bids priced above the MPR may be eligible for SEPs to cover the difference between the MPR and the bid price, subject to funding availability and subject to Energy Commission determination.  

The IOUs will have an opportunity to finalize contract negotiations after the MPR is announced before selecting their final list of winning bidders. The IOUs will then submit RPS contracts to the CPUC for approval. Proposed contracts priced above the MPR will be considered by the Energy Commission for SEP awards. The SEP will not exceed the difference between the proposed contract price and the MPR. A project awarded SEPs for eligible renewable generation may receive payments for up to 10 years (the contract must be at least 3 years in duration). The Energy Commission will make monthly payments to the generator for eligible renewable electricity generation.  

Program details are available from the New Renewable Facilities Program Guidebook (May 2004), Renewables Portfolio Standard Eligibility Guidebook (May 2004), and the Overall Program Guidebook (May 2004), all of which are available from the
Energy Commission's RPS Documents Page.

Contact:
Heather Raitt
California Energy Commission
Renewable Energy Program
1516 Ninth Street
Sacramento, CA 95814-5512
Phone: (916) 654-4735
Fax: (916) 654-4420
E-Mail: hraitt@energy.state.ca.us
Web site: http://www.energy.ca.gov/

Self-Generation Incentive Program (SGIP)

On March 27, 2001, the California Public Utilities Commission approved a statewide incentives program to encourage commercial and residential customers of investor-owned utilities to install clean distributed generation technologies to meet all or part of their onsite electricity needs. The incentive payments range from $1/W - $4.50/W, depending on the type of system, and will be funded through the end of 2007. Qualifying systems include photovoltaics, microturbines, small gas turbines, internal combustion engines, fuel cells and wind turbines. Under this $138 million per year program, greater incentives (Level 1) are provided for renewables. The payment for wind turbines is initially $4.50 per installed Watt of peak generating capacity.

Requirements include:

• Self-generation units must be and remain connected to the utility grid. 
• Wind systems must be sized between 30kW to 5MW.
• Proposed sites must be within the electric utility service area of either Pacific Gas and Electric (PG&E), San Diego Gas & Electric (SDG&E), Southern California Edison (SCE) or Southern California Gas Company (SoCalGas).
• Projects should not exceed 200% of the historical or current electricity needs.
• Contractor-installed systems count towards the total eligible system costs and must carry a minimum full warranty of five years. Some systems and/or their components are required to meet national standards.

Additional information can be found at the California Energy Commission's Distributed Energy Resources Guide website.

PG&E, SCE, and SoCal Gas will administer the incentive program in their service territories, and the San Diego Regional Energy Office will administer the program in SDG&E's territory. Customers of PG&E, SDG&E, SCE and SoCal Gas should contact their program administrator for an application, program handbook and additional eligibility information. For program administrator contact information, see Utility Contacts, below.

San Francisco Bonding Authority

On November 6, 2001, San Francisco voters approved two ballot initiatives to support solar and wind systems, allowing the city to issue a $100 million revenue bond for renewable installations and Supervisors to authorize future revenue bonds for renewable energy and conservation projects without voter approval. The city expects that the bond will help fund 30 MW of wind generation in the Bay area.

Contact:
Fred Schwartz
San Francisco Public Utilities Commission
1155 Market St., 4th Floor
San Francisco, CA 94103
Phone: (415) 554-2425
E-Mail: fschwartz@sfwater.org
Web site: http://sfwater.org/home.cfm

We are unaware of any California utilities currently offering additional incentives for wind energy development.

The Energy Commission has contracted with TrueWind Solutions LLC to generate high-resolution wind maps for California using state-of-the-art numerical modeling techniques along with site data validation. The maps are available for download from the California Energy Commission’s website.

The US Department of Energy has produced wind resource maps for each state. There is a map for Northern California, and one for Southern California. You may also find the definitions of Wind Power Classes for the maps helpful.

There is additional information in the Wind Energy Atlas of the United States, where you can review maps for other locations in the US or get more information about how the maps were created.

Wind maps are available for Northern California at www.WindPowerMaps.org. This site also offers interactive wind maps of the Northwest with zoom-in capability.

The US Department of Energy’s Energy Efficiency and Renewable Energy Network has also published wind resource data for California.

Calenergy.org, a website designed to facilitate the installation of wind and solar energy in California, was launched in October 2001 as part of a multi-faceted consumer education program called This Renewable House. The website is intended to bring consumers an important tool to help secure competitive bids and help ensure their renewable energy installations are completed by qualified, experienced installers. The website includes a contractor database, with tips on how to choose a contractor and other information to help consumers judge if renewables are right for them. Renewable energy contractors, retailers, and consultants are invited to establish themselves in the Web site's database.

A California-specific Consumer's Guide to Buying a Small Wind Electric System (PDF 133 kb) and the U.S. Department of Energy's Small Wind Electric Systems Consumer's Guide (PDF 540 kb) provide further information on installing small wind turbines. Hard copies of both publications can be obtained by contacting the CEC Energy Call Center at 800-555-7794. Additional dealers may be found through AWEA's list of wind turbine manufacturers.

Pacific Gas & Electric (PG&E)  
Phone: (415) 973-6436
Fax: (415) 973-2510  
Email: selfgen@pge.com
Web: www.pge.com/selfgen   

Address:
Self-Generation Incentive Program  
P.O. Box 770000  
Mail Code B27P  
San Francisco, CA 94177-001 

San Diego Regional Energy Office 
(administrator for San Diego Gas & Electric, or SDG&E)

Contact:
Nathalie Osborn, Program Manager  
Phone: (858) 244-1193
Phone: 1 (866) SDENERGY
Fax: (858) 244-1178  
Email: selfgen@sdenergy.org
Web: www.sdenergy.org  

Address:
San Diego Regional Energy Office
Attn: SELFGEN Program Manager  
8520 Tech Way Suite 110  
San Diego, CA 92123 

Southern California Edison (SCE)
Phone: 1 (800) 736-4777 or (626) 302-8436  
Fax: (626) 302-6253    
Email: greenh@sce.com  
Web: www.sce.com/sgip  

Address:
Program Manager Self-Generation Incentive Program Southern California Edison  
2131 Walnut Grove Avenue, 3rd Floor, B 10
Rosemead, California 91770 

Southern California Gas Company (SoCalGas)
Phone: 1 (866) 347-3228  
Fax: (213) 244-8222 
Email: selfgeneration@socalgas.com  
Web: www.socalgas.com/business/selfgen  

Address:
Self-Generation Incentive Program Administrator   Southern California Gas Company  
555 West Fifth Street, GT22H4  
Los Angeles, CA 90013-1011

California Energy Commission
The California Energy Commission has additional information about renewable energy programs.

California Public Utility Commission
The California Public Utility Commission’s Energy Division is responsible for regulations relating to the electric utility industry.

The Kern Wind Energy Association (KWEA) located in Kern County California is a trade association representing wind developers, operators and manufacturing companies as well as other suppliers and vendors to the wind industry. KWEA is actively involved with residents of the state of California interested in installing small wind turbines.
Phone: 805-822-7956

The Center for Energy Efficiency and Renewable Technology (CEERT) is a collaboration of major environmental organizations, public interest groups, and clean technology companies.

The California Alliance for Distributed Energy Resources (CADER) is a voluntary collaborative committed to facilitating the successful deployment of highly efficient and environmentally responsible distributed energy resources into competitive energy markets.

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