Get Your Power from theSun A Consumer’s Guide

Get Your Power from theSun A Consumer’s Guide
A Consumer’s Guide
Get Your Power from theSun
Bringing you a prosperous future where energy is clean, abundant, reliable, and affordable
What is a solar electric or photovoltaic system? . . . . . . . . . . . . . . . .2
Are incentives available to help reduce the cost? . . . . . . . . . . . . . . . .3
Investing in a PV system
Why should you buy a PV system? . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Is your home or business a good place for a PV system? . . . . . . . . . .5
How big should your PV system be, and what features
should it have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
How much will you save with your PV system? . . . . . . . . . . . . . . . . .8
How much does a PV system cost? . . . . . . . . . . . . . . . . . . . . . . . . . . .8
How can you finance the cost of your PV system? . . . . . . . . . . . . . .9
Selecting a PV provider
Who sells and installs PV systems? . . . . . . . . . . . . . . . . . . . . . . . . . .11
How do you choose among PV providers? . . . . . . . . . . . . . . . . . . . .11
How do you choose among competing bids? . . . . . . . . . . . . . . . . . .12
Is the lowest price the “best deal”? . . . . . . . . . . . . . . . . . . . . . . . . . .13
Before connecting a PV system to the grid
What should you know about permits? . . . . . . . . . . . . . . . . . . . . . .14
What should you know about insurance? . . . . . . . . . . . . . . . . . . . .14
How do you get an interconnection agreement? . . . . . . . . . . . . . . .14
How do you get a net-metering agreement? . . . . . . . . . . . . . . . . . . .15
What should you know about utility and inspection sign-off? . . . .16
What should you know about warranties? . . . . . . . . . . . . . . . . . . . .16
Getting help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Cover photo: This PV system, integrated into an awning over the
back porch of a home in California, generates electricity while
shading the family's outdoor activities. (Courtesy of AstroPower/PIX12345)
Photo opposite: These PV modules are light and flexible, which
makes 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 Energy
Commission, which was supported, in part, by the National
Renewable Energy Laboratory in Golden, Colorado.
Get Your Power from theSun
Are you thinking about buying a solar electric system for your home or business? 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 energy—the sun. And PV systems for homes and businesses are becoming more
affordable all the time.
PV works best in an energy-efficient building. So, adding insulation and energy-efficient lighting, appliances, and windows is a good idea, to reduce your
home’s overall electricity use before you install a PV system.
To make PV systems even more affordable, several states offer financial incentives through solar rebates and other programs. Some utilities have net metering programs, which further enhance the economics of PV. Net metering
means that when your PV system generates more power than you need, the
excess goes to the utility grid and the meter runs backward. This allows you
to 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 system. It is not a technical guide to designing or installing a system—for that
information, we recommend consulting an experienced PV system designer
or supplier.
Warren Gretz, NREL/PIX06283
A PV system can be a substantial investment. As with any investment, careful
planning will help you make the right decisions for your home or business.
What is a solar electric or
photovoltaic system?
technology the U.S. energy source
of choice for the 21st century.
Photovoltaic (PV) systems convert
sunlight directly to electricity. They
work any time the sun is shining,
but more electricity is produced
when the sunlight is more intense
and strikes the PV modules directly
(as when rays of sunlight are perpendicular to the PV modules). Unlike
solar thermal systems for heating
water, PV does not use the sun's
heat to make electricity. Instead,
electrons freed by the interaction
of sunlight with semiconductor
materials in PV cells are captured
in an electric current.
The basic building block of PV technology is the solar “cell.” Multiple
PV cells are connected to form a PV
“module,” the smallest PV component sold commercially. Modules
range in power output from about
10 watts to 300 watts. A PV system
connected or “tied” to the utility
grid has these components:
PV allows you to produce electricity—
without noise or air pollution—from
a clean, renewable resource. A PV
system never runs out of fuel, and it
won't increase U.S. oil imports. Many
PV system components are manufactured right here in the United States.
These characteristics could make PV
• Batteries (optional) to provide
energy storage or backup power
in case of a power interruption
or outage on the grid.
• One or more PV modules, which
are connected to an inverter
• The inverter, which converts the
system's direct-current (DC) electricity to alternating current (AC)
AC electricity is compatible with
the utility grid. It powers our lights,
appliances, computers, and televisions.
Home Power/
Residential grid-connected PV system
Special appliances that run directly
on DC power are available, but they
can be expensive.
Before you decide to buy a PV system,
there are some things to consider:
First, PV produces power intermittently because it works only when
the sun is shining. This is not a problem for PV systems connected to the
utility grid, because any additional
electricity required is automatically
delivered to you by your utility. In
the case of non-grid, or stand-alone,
PV systems, batteries can be purchased to store energy for later use.
Second, if you live near existing
power lines, PV-generated electricity
is usually more expensive than conventional utility-supplied electricity.
Although PV now costs less than
1% of what it did in the 1970s, the
amortized price over the life of the
system is still about 25 cents per
kilowatt-hour. This is double to
quadruple what most people pay for
electricity from their utilities. A solar
rebate program and net metering can
help make PV more affordable, but
they can't match today's price for
utility electricity in most cases.
Finally, unlike the electricity you
purchase monthly from a utility, PV
power requires a high initial investment. This means that buying a PV
system is like paying years of electric
bills up front. Your monthly electric
bills will go down, but the initial
expense of PV may be significant.
By financing your PV system, you
can spread the cost over many years,
and rebates can also lighten your
financial load.
Are incentives available to
help reduce the cost?
Yes, many states offer incentives.
For specific information, call one of
the contacts listed under “Getting
Help” at the end of this booklet.
Another excellent source is the
National Database of State Incentives for Renewable Energy (DSIRE).
Prepared by the North Carolina Solar
Center, this database contains information on financial and regulatory
incentives that promote renewable
energy technologies.
Net Metering—In more than 35
states, customers who own PV systems can benefit from laws and
regulations that require “net” electric
meter reading. The customer is billed
for the net electricity purchased from
the utility over the entire billing
period—that is, the difference
between the electricity coming from
the power grid and the electricity
generated by the PV system. Through
net metering, the customer obtains
the full retail electricity rate—rather
than the much lower wholesale
rate—for kilowatt-hours of PV-produced electricity sent to the utility
power grid. The benefits of net
metering to consumers are especially
significant in areas such as Hawaii
and New York, which have high
retail electric rates. Utilities also
benefit because the solar-generated
energy often coincides with their
periods of “peak” demand for
Property and Sales Tax—Tax
incentives may include a sales tax
exemption on the PV system purchase, a property tax exemption,
or state personal income-tax credits,
all of which provide an economic
benefit to consumers by lowering
high capital costs. The U.S. government also provides financial support
for PV technology through a tax
credit for commercial uses of solar
energy. This energy investment credit
provides businesses (but not individuals or utilities) with a 10% tax credit
and 5-year accelerated depreciation
for the cost of equipment used to
generate solar electricity.
Buy-Down—Rebates and buydowns, typically based on the rated
power of the system, help to defray
high capital costs and to create
competitive, sustainable market
growth. In the United States, the
U.S. Department of Energy has been
involved in a program known as
TEAM-UP, or Technology Experience
to Accelerate Markets in Utility
Photovoltaics. Through this program,
some 80 utilities in 40 states have
installed more than 7 megawatts
of grid-connected PV; supplier buydowns and consumer rebates range
between $2 and $4 per watt.
Residential Energy Rate—This
is the average retail residential rate
for energy from utilities, in cents
per kilowatt-hour. Check your utility
bill for your actual rate.
PV awnings such as this one in California provide both
electricity and shade.
Investing in a PV system
Why should you buy a PV
People decide to buy PV systems for
a variety of reasons. Some people
want to help preserve the Earth's
finite fossil-fuel resources and reduce
air pollution. Others want to invest
in an energy-producing improvement to their property. Some people
like the security of reducing the
amount of electricity they buy from
their utility because it makes them
less vulnerable to future price
increases. And some people just
appreciate the independence that
a PV system provides.
If you plan to build a home away
from an established utility service,
inquire about the cost of installing
a utility line. Often, the cost of
extending conventional power to
your residence is higher than the
cost of a solar option.
Whatever your reason, solar energy
is widely thought to be the energy
source of choice for the future, and
you may be able to take advantage
of a state-sponsored program to help
make it your energy choice for today
and tomorrow.
Is your home or business a
good place for a PV system?
Can you locate your system
so it works well?
A well-designed PV system needs
clear and unobstructed access to the
sun's rays for most or all of the day,
throughout the year. You can make
an initial assessment yourself. If the
location looks promising, your PV
provider can determine whether your
home or business can effectively use
a PV system.
The orientation of your PV system
(the compass direction that your system faces) affects its performance. In
the United States, the sun is always
in the southern half of the sky but is
higher in the summer and lower in
the winter. Usually, the best location
for a PV system is a south-facing
roof, but roofs that face east or west
may also be acceptable. Flat roofs
also work well for solar electric systems, because PV modules can be
mounted flat on the roof facing the
sky or bolted on frames tilted toward
the south at an optimal angle. They
can also be attached directly to the
roof as “PV shingles.”
If a rooftop can't be used, your solar
modules can also be placed on the
ground, either on a fixed mount or
a “tracking” mount that follows the
sun to orient the PV modules. Other
options (often used in multifamily
or commercial applications) include
mounting structures that create covered parking, or that provide shade
as window awnings.
Is your site free from shading by
trees, nearby buildings, or other
To make the best use of your PV system, the PV modules must have a
clear “view” of the sun for most or
all of the day—unobstructed by trees,
roof gables, chimneys, buildings, and
other features of your home and the
surrounding landscape. Some potential sites for your PV system may
be bright and sunny during certain
times of the day, but shaded during
other times. Such shading may substantially reduce the amount of electricity that your system will produce.
To be eligible for some rebates, your
system must be unshaded between
certain hours during certain times of
the year. Some states have laws that
establish your right to protect your
solar access through the creation of
a “solar easement.” Your PV provider
can help you determine whether
your 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. Some
residential systems require as little
as 50 square feet (for a small “starter”
system), but others could need as
much as 1,000 square feet.
Commercial systems are typically
even larger. If your location limits
the size of your system, you may
want to install one that uses more
efficient PV modules. Greater efficiency means that the module needs
less surface area to convert sunlight
into a given amount of electric
power. PV modules are available
in a range of types, and some offer
more efficiency per square foot
than others do (see table on the
next page). Although the efficiency
(percent of sunlight converted to
electricity) varies with the different
types of PV modules available today,
higher efficiency modules typically
cost more. System sizing, discussed
later in this booklet, should also be
discussed with your PV provider.
What kind of roof do you have,
and what is its condition?
Some types of roofs are simpler and
cheaper to work with, but a PV system can be installed on any type.
Typically, roofs with composition
shingles are the easiest to work with,
and those with slate are the most
difficult. In any case, an experienced
solar installer will know how to
work on all types and can use roofing techniques that eliminate any
possibility of leaks. Ask your PV
provider how the PV system affects
your roof warranty.
If your roof is older and needs to be
replaced in the near future, you may
want to replace it at the time the PV
system is installed to avoid the cost
of removing and reinstalling your
PV system. PV panels often can be
integrated into the roof itself, and
some modules are actually designed
as three-tab shingles or raised-seam
metal roof sections. One benefit of
these systems is their ability to offset
the cost of roof materials.
How big should your PV
system be, and what features
should it have?
To begin, consider what portion of
your current electricity needs you
would like your PV system to meet.
For example, suppose that you would
like to meet 50% of your electricity
needs with your PV system. You
could work with your PV provider
to examine past electric bills and
determine the size of the PV system
needed to achieve that goal.
produced by your system on an
annual basis (see the section on net
metering). Finally, customers eligible
for net metering vary from utility to
utility; for example, net metering
could be allowed for residential customers only, commercial customers
only, or both.
You can contact your utility and
request the total electricity usage,
measured in kilowatt-hours, for your
household or business over the past
12 months (or consult your electric
bills if you save them). Ask your PV
provider how much your new PV
system will produce per year (also
measured in kilowatt-hours) and
compare that number to your annual
electricity usage (called demand) to
get an idea of how much you will
save. In the next section, we'll provide more information on estimating
how much you will save.
One optional feature to consider is
a battery system to provide energy
storage (for stand-alone systems) or
backup power in case of a utility
power outage (for grid-connected
systems). Batteries add value to your
system, but at an increased price.
As a rule, the cost per kilowatt-hour
goes down as you increase the size
of the system. For example, many
inverters are sized for systems up to
5 kilowatts, so even if your PV array
is smaller (say, 3 kilowatts), you may
have to buy the same size of inverter.
Labor costs for a small system may
be nearly as much as those for a large
system, so you are likely to get a better price for installing a 2-kilowatt
system all at once, rather than
installing 1 kilowatt each year for
two years.
Some solar rebate programs are
capped 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 some
service territories, your PV system
must have a peak generating capacity
that is typically not more 10 kilowatts (10,000 watts), although this
peak may differ from state to state.
Also, utilities have different provisions for buying excess electricity
Roof Area Needed in Square Feet (shown in Bold Type)
PV Module
Efficiency (%)
PV Capacity Rating (Watts)
For example, to generate 2,000 watts from a 12%-efficient system, you need 200 square feet of roof area.
How much will you save
with your PV system?
The value of your PV system's electricity depends on how much you
pay for electricity now and how
much your utility will pay you for
any excess power that you generate.
If your utility offers net metering
(and so pays the full retail price for
your excess electricity), you and your
utility will pay the same price for
each other's electricity. You can use
the calculation box on the next page
to roughly estimate how much electricity your PV system will produce
and how much that electricity will
be worth. Actual energy production
from your PV system will vary by up
to 20% from these figures, depending
on your geographic location, the
angle and orientation of your system,
the quality of the components, and
the quality of the installation.
Also, you may not get full retail
value for excess electricity produced
by your system on an annual basis,
even if your utility does offer net
metering. Be sure to discuss these
issues with your PV provider. Request
a written estimate of the average
annual energy production from the
PV system. However, even if an estimate 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 net
metering, you can still use the calculation box to determine the amount
of electricity your system will
produce. However, this is not as
straightforward, because the excess
electricity will not be worth as much
as the electricity you actually use.
You may earn only 2 cents per
kilowatt-hour—or less than half the
retail rate—for your excess power.
PV systems produce most of their
electricity during the middle of the
day, when residential electric loads
tend to be small. If your utility does
not offer net metering, you may
want to size your system to avoid
generating electricity significantly
beyond your actual needs.
How much does a PV
system cost?
No single answer applies in every
case. But a solar rebate and other
incentives can always reduce the
cost. Your price depends on a number of factors, including whether
your home is under construction and
whether PV is integrated into the
roof or mounted on top of an existing roof. The price also depends on
the PV system rating, manufacturer,
retailer, and installer.
The size of your system may be the
most significant factor in any measurement of costs versus benefits.
Small, single-PV-panel systems with
built-in inverters that produce about
75 watts may cost around $900
installed, or $12 per watt. These
small systems offset only a small
fraction of your electricity bill. A
2-kilowatt system that meets nearly
all the needs of a very energyefficient home could cost $16,000
to $20,000 installed, or $8 to $10 per
watt. At the high end, a 5-kilowatt
system that completely meets the
energy needs of many conventional
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 the
contoured values is generally ±10%.
In mountainous and other areas of
complex terrain, the uncertainty may
be higher.
homes can cost $30,000 to $40,000
installed, or $6 to $8 per watt. These
prices are rough estimates; your
costs depend on your system's configuration, your equipment options,
and other factors. Your local PV
providers can give you more accurate
estimates or bids.
How can you finance the cost
of your PV system?
When it comes to financing the cost
of purchasing and installing your
PV system, there are some special
programs particular to financing
solar and other renewable energy
investments. But most of the
options will be familiar to you.
The best way to finance PV systems
for homes is through a mortgage
loan. Mortgage financing options
include your primary mortgage; a
second mortgage, such as a U.S.
Department of Housing and Urban
Development (HUD) Title 1 loan; or
a home-equity loan that is secured
by your property. There are two
advantages to mortgage financing.
First, mortgage financing usually provides longer terms and lower interest
rates than other loans, such as conventional bank loans. Second, the
interest paid on a mortgage loan is
generally deductible on your federal
taxes (subject to certain conditions).
If you buy the PV system for your
home at the same time that you
build, buy, or refinance the home,
adding the cost of the PV system to
your mortgage loan is likely to be
relatively simple. It is also one way
to avoid additional loan application
forms and fees.
If mortgage financing is not available, look for other sources of financing, such as conventional bank
loans. Seek the best possible combination of low rate and long term.
This allows you to amortize your PV
system as inexpensively as possible.
Because your PV system is a longterm investment, the terms and
conditions of your financing are
likely to be the most important
factor in determining the effective
price of your PV-generated power.
PV systems for businesses are probably best financed through a company's existing sources of funds for
capital purchases—such as Small
Business Administration loans or
conventional bank loans.
Schott Applied Power Corp./PIX08808
This 20-kilowatt PV system produces electricity for the common
areas of a shopping center in Cambridge, Massachusetts.
Selecting a PV provider
Who sells and installs PV
In some areas, finding a PV provider
can be as simple as picking up the
telephone directory and looking
under “Solar Energy Equipment and
Systems—Dealers.” However, many
of the listings are solar water-heating
companies and many companies
might not be experienced in PV system design or installation. Similarly,
many electrical contractors, although
proficient in typical electrical contracting work, might not have expertise in PV or residential roof-mounting
techniques. How do you identify solar
electric system providers? Here are
several suggestions.
• Check the Source Guide for renewable energy businesses (including
PV) by name, product type, business
type, and location: http://energy.
• Contact the Solar Energy Industries
Association (SEIA) at 202-628-7745
for a list of solar service providers.
• Contact your utility company
to see which vendors it might
• Conduct a search on the Internet.
Reputable, professional contractors
with experience in PV systems are
the best choice for the actual
How do you choose among
PV providers?
should have the lowest travel costs).
Contact these providers and find out
what products and services they offer.
The following questions may give you
a good sense of their capabilities:
Has the company installed gridconnected PV systems? If not,
has it installed grid-independent
(or stand-alone) PV systems?
Experience in installing gridconnected systems is valuable
because some elements of the installation—particularly interconnection
with the local utility—are unique
to these systems. Because gridconnected systems are relatively
uncommon, however, most contractors with PV experience have worked
only on stand-alone systems. So,
they have experience with all aspects
of PV system installation except
connection with the utility grid.
However, a competent company
with PV experience should not be
eliminated just because it has not
yet installed grid-connected PV.
Experience with off-grid systems is
valuable, because grid-independent
systems are more technically complex than grid-tied systems.
How many years of experience
does the company have installing
PV systems?
This issue speaks for itself: A contractor who has been in business a long
time probably understands how to
work with customers and to compete
effectively with other firms.
Compile a list of prospective PV
providers. (Those closest to you
Is the company properly licensed?
PV systems should be installed by
an appropriately licensed contractor.
This usually means that either the
installer or a subcontractor has an
electrical contractor's license. Your
State Electrical Board can tell you
whether a contractor has a valid
electrician's license. Local building
departments might also require that
the installer have a general contractor's license. Call the city or county
you live in for additional information on licensing.
A solar rebate program may require
that, in addition to being properly
licensed, installers must demonstrate
that they have special knowledge
about installing PV systems. This special knowledge may be demonstrated
in one of the following ways:
• Possession of a solar contractor
specialty license, issued by a local
building jurisdiction, that recognizes—through testing or other
means—special knowledge of PV
• Certification in PV systems by a
group such as the state chapter
• A letter from the PV system manufacturer stating that the installer
has the experience and training
needed to install the system
Does the company have any
pending or active judgments
or liens against it?
As with any project that requires a
contractor, due diligence is recommended. Your state electrical board
can tell you about any judgments or
complaints against a state-licensed
electrician. Consumers should call
the city and county they live in for
information on how to evaluate contractors. The Better Business Bureau
is another source of information.
How do you choose among
competing bids?
If you decide to get more than one
bid for the installation of your PV
system (always a good idea), make
sure that all bids are made on the
same basis. For example, a bid for a
system mounted on the ground is
usually very different from another
bid for a rooftop system.
Similarly, some PV modules generate
more electricity per square foot than
others. Bids should clearly state the
maximum generating capacity of the
system (measured in watts or kilowatts). If possible, have the bids specify the system capacity in “AC watts”
under a standard set of test conditions, or specify the output of the
system at the inverter.
Also request an estimate of the
amount of energy that the system
will produce on an annual basis
(measured in kilowatt-hours).
Because the amount of energy
depends on the amount of sunlight—which varies by location, season, and year to year—it’s unlikely
the contractor will quote a specific
figure, but a range of ±20% is realistic. Bids also should include the total
cost of getting the PV system up and
running, including hardware, installation, connection to the grid, permitting, sales tax, and warranty.
Your warranty is a very important
factor for evaluating bids. A solar
rebate program may require that
systems be covered by a two-year
parts-and-labor written installation
warranty, for example, in addition
to any manufacturers' warranties on
specific components. The installer
may offer longer warranties. Also, ask
yourself, “Will this company stand
behind the full-system warranty for
the next two years?”
It might not be. You generally get
what you pay for, and it's possible
that a low price could be a sign of
inexperience. Companies that plan
to stay in business must charge
enough for their products and
services to cover their costs, plus a
fair profit margin. Therefore, price
should not be the only consideration, and quality should probably
rank high on the list.
A home in the woods of New
Hampshire had too much shade
to use PV on the roof. The
solution was installing a
freestanding PV array.
Alan Ford/PIX09507
Is the lowest price the “best
Before connecting a PV system to the grid
What should you know about
If you live where a homeowners association must approve a solar electric
system, you or your PV provider may
need to submit your plans. You’ll
need approval before you begin
installing your PV system. However,
some state laws stipulate that you
have the right to install a solar
electric system on your home.
You will probably need to obtain permits from your city or county building
department. These include a building
permit, an electrical permit, or both.
Typically, your PV provider will take
care of this, rolling the price of the
permits into the overall system price.
However, in some cases, your PV
provider may not know how much
time or money will be involved in
“pulling” a permit. If so, this task
may be priced on a time-and-materials basis, particularly if additional
drawings or calculations must be
provided to the permitting agency.
In any case, make sure the permitting costs and responsibilities are
addressed at the start with your PV
provider before installation begins.
Code requirements for PV systems
vary somewhat from one jurisdiction
to the next, but most are based on
the National Electrical Code (NEC).
Article 690 in the NEC spells out
requirements for designing and
installing safe, reliable, code-compliant
PV systems. Because most local
requirements are based on the NEC,
your building inspector is likely to
rely on Article 690 for guidance in
determining whether your PV system
has been properly designed and
installed. If you are one of the first
people in your community to install
a grid-connected PV system, your
local building department may not
have experience in approving one
of these systems. If this is the case,
you and your PV provider can speed
the process by working closely with
building officials to bring them up
to speed on the technology.
What should you know about
For grid-connected PV systems, your
electric utility will require that you
enter into an interconnection agreement (see also the next section).
Usually, these agreements set forth the
minimum insurance requirements to
keep in force. If you are buying a PV
system for your home, your standard
homeowner’s insurance policy is
usually adequate to meet the utility’s
requirements. However, if insurance
coverage becomes an issue, contact
one of the groups listed in the Getting
Help section.
How do you get an
interconnection agreement?
Connecting your PV system to the
utility grid will require an interconnection agreement and a purchase
and sale agreement. Federal law and
some state public utility commission
regulations require utilities to supply
you with an interconnection agreement. Some utilities have developed
simplified, standardized interconnection agreements for small-scale PV
The interconnection agreement specifies the terms and conditions under
which your system will be connected
to the utility grid. These include your
obligation to obtain permits and insurance, maintain the system in good
working order, and operate it safely.
The purchase and sale agreement specifies the metering arrangements, the
payment for any excess generation,
and any other related issues.
The language in these contracts
should be simple, straightforward,
and easy to understand. If you are
unclear about your obligations under
these agreements, contact the utility
or your electrical service provider for
clarification. If your questions are
not answered adequately, contact
one of the groups in the Getting
Help section.
National standards for utility interconnection of PV systems are being
adopted by many local utilities. The
most important of these standards
focuses on inverters. Traditionally,
inverters simply converted the DC
electricity generated by PV modules
to the AC electricity we use in our
homes. More recently, inverters have
evolved into remarkably sophisticated devices to manage and condition
power. Many new inverters contain
all the protective relays, disconnects,
and other components necessary to
meet the most stringent national
standards. Two of these standards are
particularly relevant:
• Institute of Electrical and Electronic
Engineers, P929: Recommended
Practice for Utility Interface of
Photovoltaic Systems. Institute of
Electrical and Electronic Engineers,
Inc., New York, NY (1998).
• Underwriters Laboratories, UL
Subject 1741: Standard for Static
Inverters and Charge Controllers for
Use in Photovoltaic Power Systems
(First Edition). Underwriters
Laboratories, Inc., Northbrook, IL
(December 1997).
You don’t need to fully understand
these standards, but your PV provider
and utility should. It is your obligation to make sure that your PV
provider uses equipment that complies with the relevant standards,
however, so be sure to discuss this
How do you get a netmetering agreement?
Some utilities offer customers with
PV systems the option to net meter
the excess power generated by the
PV system. As noted, this means that
when the PV system generates more
power than the household can use,
the utility pays the full retail price
for this power in an even swap as the
electric meter spins backward, and
your PV power goes into the grid.
Net metering allows eligible customers with PV systems to connect
to the grid with their existing single
meter. Almost all standard utility
meters can measure the flow of
energy in either direction. The meter
spins forward when electricity is
flowing from the utility into the
building and spins backward when
power is flowing from the building
to the utility.
For example, in one utility program,
customers are billed monthly for the
“net” energy consumed. If the customer’s net consumption is negative
in any month (i.e., the PV system
produces more energy than the customer uses), the balance is credited
to subsequent months. Once a year,
on the anniversary of the effective
date of the interconnection agreement, the utility pays the customer
for any negative balance at its wholesale or “avoided cost” for energy,
which may be quite small, perhaps
less than 2 cents per kilowatt-hour.
Net metering allows customers to get
more value from the energy they
generate. It also simplifies both the
metering process (by eliminating the
need for a second meter) and the
accounting process (by eliminating
the need for monthly payments from
your utility). Be sure to ask your
utility about its policy regarding
net metering.
Under the federal Public Utility
Regulatory Policies Act (PURPA), utilities must allow you to interconnect
your PV system. They must also buy
any excess electricity you generate,
beyond what you use in your home or
business. If your utility does not offer
net metering, it will probably require
you to use two meters: one to measure
the flow of electricity into the building, the other to measure the flow of
electricity out of the building. If net
metering is not available, the utility
will pay you only a wholesale rate for
your excess electricity. This provides a
strong incentive to use all the electricity you generate so that it offsets electricity you would otherwise have to
purchase at the higher retail rate. This
may be a factor in how you optimize
the system size, because you may want
to limit generating excess electricity.
Such a “dual metering” arrangement is
the norm for industrial customers who
generate their own power.
What should you know about
utility and inspection sign-off?
After your new PV system is
installed, it must be inspected and
“signed off” by the local permitting
agency (usually a building or electrical inspector) and most likely by
the electric utility with which you
entered into an interconnection
agreement. Inspectors may require
your PV provider to make corrections
(which is fairly common in the construction business). A copy of the
building permit showing the final
inspection sign-off may be required
to qualify for a solar rebate program.
What should you know about
Warranties are key to ensuring that
your PV system will be repaired if
something should malfunction during the warranty period. PV systems
eligible for some solar rebate programs must carry a full (not “limited”) two-year warranty, in addition
to any manufacturers’ warranties on
specific components. This warranty
should cover all parts and labor,
including the cost of removing any
defective component, shipping it to
the manufacturer, and reinstalling
the component after it is repaired
or replaced. The rebate program’s
two-year warranty requirement
supersedes any other warranty
limitations. In other words, even if
the manufacturer’s warranty on a
particular component is less than
two years, the system vendor must
provide you with a two-year warranty. Similarly, even if the manufacturer’s warranty is a limited warranty
that does not include the cost of
removing, shipping, and reinstalling
defective components, the system
vendor must cover these costs if
the retailer/vendor also installed
the system.
Be sure you know who is responsible
for honoring the various warranties
associated with your system—the
installer, the dealer, or the manufacturer. The vendor should disclose the
warranty responsibility of each party.
Know the financial arrangements,
such as contractor's bonds, that
ensure the warranty will be honored.
(A warranty does not guarantee that
the company will remain in business). Find out whom to contact
if there is a problem. Under some
solar rebate programs, vendors must
provide documentation on system
and component warranty coverage
and claims procedures. To avoid any
later misunderstandings, be sure to
read the warranty carefully and
review the terms and conditions
with your retailer/vendor.
Getting Help
For more information on solar electric
systems, please contact:
National Association of State Energy
Officials (NASEO)
1414 Prince Street
Suite 200
Alexandria, Virginia 22314
Phone: 703-299-8800 • Fax: 703-299-6208
Check the above Web site to find the
contact for your state energy office,
which typically promotes the development and use of renewable energy
resources in your state. The office might
offer technical assistance, sponsor workshops and forums, and provide general
information to resident energy consumers on renewable energy resources
and applications.
National Association of Regulatory and
Utility Commissioners (NARUC)
1101 Vermont, N.W.
Suite 200
Washington, DC 20005
Phone: 202-898-2200 • Fax: 202-898-2213
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 800
Washington, DC 20006
Phone: 202-628-7745 • Fax: 202-628-7779
The Solar Energy Industries Association
is the national trade association of the
solar industry. Many states have a state
chapter of the national SEIA organization, which can be found on SEIA’s
Web site.
Other helpful Web sites
Solar Energy Technologies Program:
National Center for Photovoltaics:
Million Solar Roofs:
Database of State Incentives for
Renewable Energy (DSIRE):
About the Office of Energy Efficiency and Renewable Energy
A Strong Energy Portfolio for a Strong America
Energy efficiency and clean, renewable energy will mean a stronger economy, a
cleaner environment, and greater energy independence for America. By investing in
technology breakthroughs today, our nation can look forward to a more resilient
economy 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 Energy
invests in a portfolio of energy technologies that will:
• Conserve energy in the residential, commercial, industrial, government, and transportation 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 needs
Building Technologies Program—Homes, schools, and businesses that use less
energy, cost less to operate, and, ultimately, generate as much power as they use
Distributed Energy & Electric Reliability Program—A more reliable energy
infrastructure and reduced need for new power plants
Federal Energy Management Program—Leading by example, saving energy
and taxpayer dollars in federal facilities
FreedomCAR & Vehicle Technologies Program—Less dependence on foreign
oil, and eventual transition to an emissions-free, petroleum-free vehicle
Geothermal Technologies Program—Tapping the Earth's energy to meet
our heat and power needs
Hydrogen, Fuel Cells & Infrastructure Technologies Program—Paving the
way toward a hydrogen economy and net-zero carbon energy future
Industrial Technologies Program—Boosting the productivity and competitiveness
of U.S. industry through improvements in energy and environmental performance
Solar 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's
best energy-efficient and renewable technologies in homes, communities, and businesses
Wind & Hydropower Technologies Program—Harnessing America's abundant
natural resources for clean power generation
To learn more, visit
The National Renewable Energy Laboratory,
a DOE national laboratory, produced this Consumer’s Guide for:
U.S. Department of Energy
Office of Energy Efficiency and Renewable Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585
December 2003 • DOE/GO-102003-1844
Small Solar
Electric Systems:
A Minnesota
Can I use
solar energy to
power my home? More
and more Minnesotans are asking themselves this
question as people look for affordable, clean and
reliable sources of electricity.
Minnesota has better solar resources than what most
people may think. In fact, average annual resources in
Minneapolis are comparable to solar resources in
Jacksonville, Fla. Minnesota’s solar energy can produce
electricity when demand is highest—during the summer
months. Solar electric systems will even produce electricity
on cloudy days, although generation is significantly reduced.
Small solar electric systems can make a significant
contribution to meeting energy needs. A small solar
electric system may be a good choice if:
• trees, buildings, or other structures do not shade
the installation location,
• there is adequate roof, wall or yard space to permit
a collector assembly installation,
• the desired electrical output can be achieved,
• there are few personal financial barriers for ongrid homes or
• the home or cabin is located off-grid, away from
power lines.
Most people are interested in solar energy because it
is a nonpolluting source of power. Solar electric systems
are one of the most flexible home-based renewable energy
systems available. The system can be moved from one
location to another with far greater ease than other
renewable energy systems and can be added to over an
extended period of time, a few solar panels at a time.
Depending on the solar resource availability and the
home’s electric energy consumption, a small solar electric
system can lower electricity bills by 50 to 90 percent,
prevent power interruptions and avoid the high costs of
extending utility power lines to remote locations.
In small solar electric systems, PV cells are typically
combined into panels that hold about 40 cells; multiple
panels can be mounted together in an array that can
measure up to several yards (meters) on a side. Panels
come in sizes from a few watts to hundreds of watts—a
small home system can use anywhere from 3 to 20 panels,
depending on their size. Also available are solar roof
shingles, which replace conventional roofing materials
while providing electricity less expensively than standard
solar panels.
The photovoltaic effect
French scientist Edmund Becquerel first reported the photovoltaic effect in 1839, when he
observed a voltage between two electrodes in a beaker of electrolyte after the beaker was
exposed to sunlight.
Solar electric or photovoltaic (PV) cells convert sunlight directly into electricity. PV cells
are made of semi-conducting materials, similar to those used in computer chips. When exposed
to sunlight, these materials absorb light energy and are “excited,” causing electrons to flow
through the material and produce electricity. This process of converting light (photons) to
electricity (voltage) is called the photovoltaic effect.
N type semiconductor
P type semiconductor
Photovoltaic Device
Increase solar energy usage by increasing energy
Solar Electric
The amount of solar energy a home uses is determined more by
the amount of electricity that is consumed rather than what is
Pictured are two homes that use similar solar electric systems,
both rated at 2.85 kilowatts, installed for $18,000 in 1996 under Xcel
Energy’s (then Northern States Power Company) Solar Advantage
Program. The energy-efficient home receives about 71 percent of its
energy from solar resources, compared to 38 percent for the average
The solar cell is the basic building block of a photovoltaic system.
Individual cells can vary in size from about 1 cm (1/2 inch) to about 10
cm (4 inches) across. Although rigid panels (left) are more popular,
flexible solar panels (right) offer the benefits of being lightweight, easily
transportable, and they can be applied to smooth, curved surfaces. A
potential drawback is that they have a lower output per square meter of
surface area.
Start by increasing energy efficiency
The solar electric system for this home in Minnetonka, Minn.,
produced 2967 kilowatt-hours in 2001, meeting 71 percent of the
home’s electrical usage that year of 4192 kilowatt-hours. This energyefficient home consumes about 50 percent less energy than the
average home.
The solar electric system in this home in White Bear Lake,
Minn., produced 2719 kilowatt hours in 2001, meeting 38 percent of
the home’s electrical usage that year of 7204 kilowatt-hours. The
home is about average for electrical consumption.
Before choosing a solar electric system, reduce the
home or business’s energy consumption by increasing
energy efficiency. Because energy efficiency is less
expensive than energy production, increasing energy
efficiency is more cost effective and will reduce the size
and cost of the solar electric system that is needed. For
example, replacing an older non-Energy Star refrigerator
(pre-2001, when new efficiency standards were enacted)
might cost $600, while trying to generate the electricity
with a solar system may cost $2,000. Low power
consumption always enhances a solar electric system’s
performance and investment.
To achieve maximum energy efficiency, take a wholebuilding approach. View the home or business as an
energy system with interrelated parts, all of which work
together to contribute to the efficiency of the system.
From the insulation in the walls to the light bulbs in the
fixtures, there are many ways to make a home or business
more energy efficient:
• Reduce overall heating and cooling needs by up to
30 percent by investing just a few hundred dollars
in proper insulation, caulking and weatherstripping products. See the Home Energy Guides
“Home Insulation” and “Caulking and Weatherstripping.”
• Save money and increase comfort by upgrading the
heating, ventilation, and air-conditioning systems.
Many new furnaces use only 20 percent of the
electricity that standard furnaces use, especially
those with variable-speed furnace fan motors, so
shop wisely. See the Home Energy Guide “Home
• Replace the refrigerator and freezer with high
efficiency models. Current refrigerator models
Solar Electric
generally consume only 50 percent of the
electricity used by a ten-year-old
refrigerator. See the Home Energy Guide
“Home Appliances.”
• Replace all incandescent light bulbs with
fluorescent and compact fluorescent light bulbs.
Using fluorescent lighting can reduce lighting
costs by up to 75 percent. See the Home Energy
Guide “Home Lighting.”
• When shopping for appliances, use the Energy
Star® label as a minimum standard. Energy Star®
appliances have been identified by the U.S.
Environmental Protection Agency and U.S.
Department of Energy as being the most energyefficient products in their classes. For more
information visit the web site
The “For More Information” section at the end of this
guide lists additional resources about how to make homes
and businesses energy efficient.
additional power lines in the community. Many
solar electric systems may be incorporated within
a roof assembly or hidden by the roof or other
sections of a building or plantings.
Determine solar resources
Does the sun shine often enough and long enough to
make a small solar electric system economically
worthwhile? The answer has more to do with the cost of
the solar electric system than the amount of sun we
receive. It is true that Arizona receives more sun than
Minnesota (and that Minnesota receives more sunlight
than New York), but the difference is small compared to
the cost of the system—being in Arizona versus Minnesota
may influence the decision but the costs will ultimately be
the major factor. A discussion of solar resources is
important, however.
Solar resource maps can be used to estimate the
available solar resources. The Minnesota Department of
Commerce has created a map by measuring solar insolation,
which is the amount of radiation that penetrates the
earth’s atmosphere and actually reaches the ground.
Solar resource mapping shows that a solar electric
system would work well just about anywhere in Minnesota
—although some areas of the state have slightly stronger
solar resources than other areas of the state, there wasn’t
a broad range in strength of solar insolation statewide.
The values range from 140 watts per square meter in the
northern regions of the state up to 165 watts in the
southwestern region.
To put the state’s solar power into perspective,
Minneapolis and Jacksonville, Fla. are nearly equal in terms
of estimated annual solar energy production. Minneapolis
has a greater summer solar resource than Jacksonville due
to longer days and clearer skies, but a much lower winter
solar resource. Although Minnesota’s solar energy is
intermittent, it does have the strongest solar resources
when it is needed most—in the summer months when
electrical demands for air conditioning are highest.
Local terrain and weather patterns may cause the
solar resource at a specific site to differ considerably from
these estimates, such as the palisade along the Lake
Superior shoreline.
Making the decision
The following list can serve as a guide for deciding if a
solar electric system is for you:
• the property has good solar resources,
• whether local zoning codes or covenants allow
solar electric systems,
• long-term investments are a comfortable financial
• there is a commitment to decrease the impact on
the environment, or
• the property is in a remote location that does not
have easy access to utility lines.
Example: You are building a new home or remote
cabin. The local utility will provide power, but at a cost of
$20,000 for installation of power lines and poles. This cost
could be avoided by installing a solar electric system and
becoming your own utility. The utility costs may be
amortized as part of the mortgage costs.
Before investing in a solar electric system, research
potential obstacles. Some communities, for example,
restrict the exterior appearance of homes in residentially
zoned areas, although variances are often obtainable.
Check the zoning restrictions by contacting the local
building inspector, board of supervisors, or planning
board. They can specify if a building permit is needed and
provide a list of requirements. Condominium and
townhouse developments may also restrict installations.
An electrical permit is always required.
Most zoning and aesthetic concerns can be addressed
by supplying objective data. For example, adding a solar
electric system may defer the need for constructing
Select the best site
Unobstructed access to the sun for the collector surface is
an absolute must for any solar electric system. Obstacles
such as trees, houses, utility poles, branches, chimneys,
and sheds need to be considered, as well as planning
ahead for future obstructions such as new buildings
Solar Electric
size of system that is needed. Solar electric
system dealers can help size the system based on
the home’s electricity needs (see DOC brochure
and list).
Small systems range in size from 20 watts to 1
kilowatt. The smaller (20-500 watt) systems are commonly
used in a variety of applications such as charging batteries
for recreational vehicles and sailboats as well as supplying
power to remote cabins and lighting systems.
Smaller systems can also meet ongoing needs such as
pumping water. Farmers and ranchers find that solar
electric water pumps as well as solar electric fence systems
are versatile tools for farm operations. Solar-electric
pumping systems can be connected to the pump motor
with an electric cable, permitting flexible installations.
that are planned or trees that have not reached
their full height. The system collectors need to be
sited beyond all possible shadows of buildings and
trees. Shadows at any time dramatically reduce the
performance of solar electric systems and must be avoided
to achieve good performance.
Whether the system is stand-alone or grid-connected,
the length of the wire run between the system and the
load (house, batteries, water pumps, etc.) needs to be
taken into consideration. A substantial amount of
electricity can be lost as a result of the wire resistance—
the longer the wire run, the more electricity is lost. A
larger wire reduces these losses but costs more; however,
the closer the system to the building, the less this issue
needs to be considered. Wire run losses are greater when
using direct current (DC) instead of alternating current
(AC). So, with a long wire run, it is advisable to consider
converting DC to AC.
Basic parts of a small solar electric system
Home solar electric systems are generally comprised of a
collector or collectors, wiring, controllers, inverters and/or
batteries and mounting brackets to optimize the exposure.
The solar electric panels need to be solidly mounted.
Mounting racks must be engineered and installed to
withstand the elements of wind, ice and snow. Panels can
be mounted on the roof of a home, garage or shed or by
themselves either on the ground or a pole.
Mounting solar electric systems on rooftops is one
option, providing safe and easy access to adjust and
service panels. Low angle roofs, such as the White Bear
Lake installation mentioned earlier, might accumulate
snow on the solar panels reducing electricity production
by 2-3 percent annually. One can remove snow
accumulation manually if this is considered a major issue.
Stationary mounted panels can also be adjustable,
permitting solar electric panels to face the sun as near to
perpendicular as possible. Many people adjust their panels
two to four times a year, getting maximum exposure as
the sun’s path rises and falls over the passage of the
seasons. The sun is much higher in the sky in the summer
and lower in the winter. Solar panels mounted to the same
angle as the location’s latitude will produce the optimal
annual electricity production without having to adjust
these angles.
Solar electric panels may also be mounted on a
tracking system, which will automatically adjust so that
the PV panels face the sun throughout the day. Tracking
systems can improve solar electric output by up to 30
Parts required in addition to the solar panels will depend
on the application of the system and whether the system is
grid-connected, stand-alone, or part of a hybrid system.
Most suppliers can provide an all-inclusive package.
Select the proper size
The size of the solar electric system needed depends on
the application—whether the system will provide
supplemental power, back-up power, or power for the
entire home or business.
The average home in Minnesota uses about 8,037 kWh
per year, or about 670 kWh per month. However, the
average energy-efficient home uses much less energy; for
example, a home with a high efficiency fuel and
electrically efficient air handler plus a natural gas or
propane hot water heater can easily use only 3500 kWh
per year.
To meet 100 percent of the home’s annual energy
demand of 8,037 kWh per year, an 8 kW solar electric
system would be needed. A 1 kW system can provide about
1000 kWh annually, more or less depending on a specific
site. The roof of a typical home can support a 2 to 3 kW
solar electric system, so additional sites on the ground
would be required. And this system would need to be kept
free of snow for good year-round production.
The manufacturer will note the expected annual
energy out-put of the system as a function of annual
average solar energy available. Also check for the
maximum electricity output that the system is designed to
operate safely. Systems, including batteries, should have
automatic overcharging components to prevent
overcharging of batteries.
Solar electric systems used in residential applications
can range in size from a few hundred watts to 10 kW
depending on the desired amount of electricity. If the
solar electric system is to supply energy for the whole
house, establish an energy budget to help define the
Solar Electric
For a residential grid-connected application,
the balance of system parts may include a
controller, storage batteries (if back-up power is
desired), a power conditioning unit (inverter), and
wiring. Some solar electric systems will include controllers,
inverters or other electrical devices. It is critical that all
components be approved by a recognized testing agency,
like Underwriters Laboratories (UL), to assure the
component meets safety standards.
Mounted and tracking solar electric panels
Equipment for stand-alone systems
A stand-alone or off-grid system, which is not connected
to the utility grid, uses batteries to store excess generated
power. This system can also be used in hours of darkness,
power outages or during high demand. A charge controller
is needed to prevent the batteries from overcharging.
Deep-cycle batteries, such as those used for golf carts, can
discharge and recharge 80 percent of their capacity
hundreds of times, which makes them a good option for
remote renewable energy systems. Automotive and other
shallow-cycle batteries should not be used in renewable
energy systems.
Small solar electric systems generate direct current
(DC) electricity. In very small systems, such as those
serving cabins or remote homes, DC appliances operate
directly off the batteries. In conventional housing, most
people want to use standard appliances that use
alternating current (AC) so an inverter must be installed to
convert DC electricity from the batteries to AC. Although
the inverter slightly reduces the overall efficiency of the
system, it allows the home to be wired for AC, a definite
plus with financial lenders and future homebuyers.
For safety, batteries should be isolated from living
areas and electronics because they contain battery acids
and generate small amounts of flammable gas that need to
be vented to the outside to prevent build-up. Lead-acid
batteries also require protection from temperature
extremes to avoid significant power loss.
Stationary mounted panels can be adjustable, permitting the
panels to face the sun as near to perpendicular as possible.
Solar electric panels may also be mounted on a tracking system,
which will automatically adjust so that the PV panels face the sun
throughout the day.
Basic Parts of a Small Solar Electric System
Equipment for grid-connected systems
In grid-connected systems, the only additional equipment
required is a power conditioning unit (inverter) and
switching gear to disconnect the system from the grid in
the event of a power outage. Batteries added to this
configuration provide a power supply during power outage
situations. Power conditioning equipment is needed to
make solar electric system output electrically compatible
with the utility grid.
DC Loads
AC Loads
Solar Electric
Solar energy becomes more cost effective as the
cost of electricity increases. Although smaller
electric systems cost less in initial outlay, they are
proportionally more expensive.
A small solar electric system can cost anywhere from
$3,000 to $35,000 installed, depending on size,
application and service agreements with the manufacturer.
According to the American Solar Energy Association, the
average cost for a typical home solar electric system is
approximately $10 per watt (installed).
Although solar electric systems involve a significant
initial investment, they can be competitive with
conventional energy sources when considering a lifetime
of reduced or avoided utility costs.
The length of the payback period—the time before
the savings resulting from the system equals the cost of
the system itself—depends on several factors including:
• the system selected,
• tax benefits or exemptions,
• potential rebates,
• production credits from the state and federal
• electricity cost in the area, and
• how the solar electric system is used.
PV equipment exempt from state sales tax
To help boost the development of renewable energy
generation, a photovoltaic device
is now exempt from Minnesota
state sales tax.
A photovoltaic device is
defined as a solid-state electrical
device, such as a solar module,
that converts light directly into
direct current electricity of
voltage-current characteristics
that are a function of the
characteristics of the light source
and the materials in and design of
the device.
A “solar module” is a
photovoltaic device that produces
a specified power output under
defined test conditions, usually
composed of groups of solar cells
connected in series, in parallel, or
in series-parallel combinations.
The tax exemption is in effect
for purchases made after July 31,
2001, and before August 1, 2005. For
more information, the statute citation
is: Minnesota Session Laws 2001, 1st
Special Session, Chapter 5, Article 12,
Sec. 44.
Questions about sales tax
payments should be directed to
the Minnesota Department of
Revenue, Sales & Use Tax Hotline,
at (651) 296-6181 or 1-800-6573777.
Things to consider when purchasing a solar
electric system
Rebate program reduces PV costs
In an effort to spark
development of solar energy, the
Minnesota Department of Commerce State Energy Office is
administering a rebate program
that could pay up to 25 percent of
installation costs for a photovoltaic system.
The program provides a
rebate of $2,000 per kilowatt for
1 to 4 kilowatts of grid-connected
systems. Applications must be
made before the installation
begins, and rebates will be issued
once installation is completed
and inspected.
An example of how the
program will reduce installation
costs: A person who installs a 2kW
system, an estimated cost of
The cost of solar electric systems
$20,000, would get a rebate of
The rebate program is
funded by Xcel Energy’s Renewable
Development Fund, one of the
requirements stemming from the
1994 Prairie Island Nuclear Power
Plant legislation. During the fouryear program, approximately $1
million will be spent to install 400
kilowatts of grid-connected
photovoltaic systems.
For more information on
the rebate program, email the
Energy Information Center at or call
651-296-5175 or 1-800-6573710. Information is also
available on the web site at
As with any major purchase, shop comparatively for a
solar electric system and get at least three bids. Review
product literature from several manufacturers and read
product reviews in trade magazines.
Narrow the field to a few companies and do more
research to be sure they are recognized solar energy
businesses and that parts and service will be available
when needed. Ask for references of past customers with
similar installations and contact the Better Business
Bureau to check the company’s integrity. Ask other system
owners about performance, reliability, maintenance and
repair requirements and whether the system is meeting
their expectations. Also, find out the length of the
warranty and what is included. The state electrical code
requires that a solar electric system be inspected before
For more information see the publication ”Choosing a
Renewable Energy Contractor,” available from the
Minnesota Department of Commerce Energy Information
Installation and maintenance
Solar Electric
utility (see sidebar on Net Metering).
Grid-connected systems can be practical if
the following conditions exist:
• Utility-supplied electricity is expensive (about 10
to 15 cents per kilowatt-hour) or the net cost of
the system is reduced by a rebate.
• The cost and requirements for connecting the solar
electric system to the grid are not prohibitively
• There are good incentives for the sale of excess
electricity or for the purchase of solar-generated
electricity. (Average retail rate of the utility
combined with any other production incentive)
Federal regulations (specifically, the Public Utility
Regulatory Policies Act of 1978, or PURPA) require utilities
to connect with and purchase power from small solar
electric energy systems. However, contact the utility
before connecting to their distribution lines to address any
power quality and safety concerns. The utility can provide
a list of requirements for connecting a solar electric
system to the grid. The American Solar Energy Association
is another good source for information on utility
interconnection requirements.
Many manufacturers and dealers also offer
installation and maintenance services. A list of
installers may be available from the manufacturer, the
local utility or the phone book. The Department of
Commerce State Energy Office also maintains a list of
dealers and installers, but does not endorse or recommend
specific companies.
A credible installer will provide many services such as
obtaining necessary permits. As a general rule the Department of Commerce State Energy Office recommends
installation by a trained licensed electrical contractor
or licensed electrical professional.
Choosing to self-install
Some people elect to install the systems themselves.
When deciding to self-install, first consider the following
• Can you install the panel mounting system on roof
or yard?
• Do you know the difference between AC and DC
• Do you know enough about electricity to safely
wire the system?
• Do you know how to safely handle and install
If the answer is no to any of the above questions, the
system should probably be installed by a system integrator
or installer, including a licensed electrician or licensed
electrical contractor.
Although small solar energy systems are very simple
devices, they do require some maintenance. If you do not
have the expertise to maintain the system, an installer
may provide a service and maintenance program.
Bolts and electrical connections should be checked
and tightened if necessary. The mounting components
should be checked for corrosion and for proper angle
tension. With proper installation and maintenance, the
system should last up to 30 years or longer.
Net Metering
A net metering program
allows the electric meters of
customers with generating
facilities to turn backwards—and
send electricity back into the
generator produces more energy
than is used. Net metering allows
customers to offset their
electricity consumption over the
entire billing period, not just
instantaneously. This offset
generating facilities to receive
retail prices for the excess
electricity they generate.
Safety Requirements
Whether or not the solar electric system is connected to
the utility grid, the installation and operation of the solar
electric system is subject to the State Electrical Code.
The state’s principal concern is with the safety of the
system, so code requirements emphasize proper wiring and
installation and the use of components that have been
certified for fire and electrical safety by approved testing
laboratories, such as Underwriters Laboratories (UL).
Electrical code requirements are based on the current
National Electrical Code (NEC), which is published by the
National Fire Protection Association. Solar electric energy
installations are governed by the NEC.
If the solar electric system is connected to the local
utility grid, then the utility also has legitimate concerns
about safety and power quality that need to be
Grid-connected systems
Small solar electric energy systems connected to the local
utility’s electricity distribution system and are called gridconnected systems. A grid-connected solar electric system
can reduce consumption of utility-supplied electricity for
lighting, appliances and other uses. If the solar electric
system cannot deliver the full amount of energy needed,
the utility makes up the difference. When the solar
electric system produces more electricity than the
household requires, the excess is sent or sold to the
Solar Electric
addressed. The utility’s principal concern is that
a customer’s solar electric system automatically
stops delivering any electricity to its power lines
during a power outage. Otherwise, line workers and
the public, thinking that the line is “dead,” might not
take normal precautions and might be hurt or even killed
by the power supplied from a private electric system.
Another concern among utilities is that the power
from a small solar electric system needs to synchronize
properly with the utility grid and match the utility’s own
power in terms of voltage, frequency and power quality.
Customer charges can take a variety of
forms, including interconnection charges, metering
charges and standby charges, among others. Do not
hesitate to question any charges that seem inappropriate.
Federal law (Public Utility Regulatory Policies Act of 1978,
or PURPA, Section 210) prohibits utilities from assessing
discriminatory charges to customers who have their own
generation facilities.
Hybrid Systems
Interconnection Requirements
Hybrid wind and solar energy systems can provide reliable
off-grid power for homes, farms or even entire
communities (a co-housing project, for example) that are
located far from the nearest utility lines. According to
many renewable energy experts, a “hybrid” system that
combines wind and solar electric technologies offers
several advantages over either system alone.
In Minnesota, wind speeds are low in the summer
when the sun shines brightest and longest. Conversely, the
wind is strong in the winter when there is less sunlight
available. Because the peak operating times for wind and
solar electric systems occur at different times of the day
and year, hybrid systems are more likely to continually
produce power when needed.
When neither the wind turbine nor the solar modules
are producing electricity, most hybrid systems provide
power through batteries and/or a small auxiliary backup
engine-generator powered by conventional fuels, such as
gasoline, diesel or even biodiesel. If the batteries run low,
the engine-generator can provide power and recharge the
Adding an engine-generator makes the system more
complex, but modern electronic controllers can operate
these systems automatically. An engine-generator can also
reduce the size of the other components needed for the
system. Keep in mind that storage capacity must be large
enough to supply electrical needs during non-charging
periods. Battery banks are typically sized to supply the
electric load for three to four days without sun, wind or
An off-grid hybrid system may be practical if:
• the location has an average annual wind speed of
at least 9-mph (4.0 m/s),
• the location has unobstructed sunlight,
• a grid connection is not available or can only be
made through an expensive extension; the cost of
running a power line to a remote site to connect
with the utility grid can be prohibitive, ranging
from $15,000 to more than $50,000 per mile,
Most utilities and other electricity providers require
customers with private energy systems to sign a formal
agreement before allowing customers to interconnect to
the utility grid. The terms and conditions in these
agreements must be reviewed and approved by state
regulatory authorities.
In Minnesota, net metering rules allow utilities to require
owners of renewable energy electric generation systems that
are connected to the utility’s grid to maintain $300,000 in
liability insurance. This is generally found as part of a
Homeowners Insurance Policy or may be added to that
policy. An insurance agent or company can provide a
statement of coverage to give to the utility. Utilities consider
these requirements as necessary to protect them from
liability for facilities they do not own and have no control
over. In the 21 years since utilities have been required to
allow small solar systems to interconnect with the grid there
has never been a liability claim relating to electrical safety.
Each utility decides whether to require insurance.
An indemnity is an agreement between two parties in
which one party agrees to secure the other party against
loss or damage arising from some act or some assumed
responsibility. In the context of customer-owned
generating facilities, utilities often want customers to
indemnify them for any potential liability arising from the
operation of the customer’s generating facility.
Although the basic principle is sound—utilities
should not be held responsible for property damage or
personal injury attributable to someone else—indemnity
provisions should not favor the utility but should be fair
to both parties. Look for language that says, “each party
shall indemnify the other . . .” rather than “the
customers shall indemnify the utility . . .”
Utility customer charges
Solar Electric
depending on terrain,
• there is a personal desire for energy
independence from the utility,
• there is a personal desire to generate clean
power; and/or
• a backup power supply is needed in the event of
power outages.
Glossary of Terms
Ampacity—The current, in amperes, that a
conductor can carry continuously under the
conditions of use without exceeding its temperature
Ampere-hour—A unit for the quantity of electricity
obtained by integrating current flow in amperes over the
time in hours for its flow; used as a measure of battery
Solar electricity for a home or business is one of several
energy options in Minnesota. Energy can be generated to
meet all or part of the demand, or become a net generator
and potentially sell extra power to the local utility.
Deciding whether a solar electric system is feasible
depends on many factors; for best results, conduct careful
research and make some economic decisions before
proceeding with plans.
Converter—A device the converts direct current (DC) to
alternating current (AC). Also called an inverter.
Grid—The utility distribution system that connects
electricity generators to electricity users.
Inverter—A device the converts direct current (DC) to
alternating current (AC). Also called a converter
W—watt, a measure of power for electrical current equal
to 3.4 Btu’s
kW—Kilowatt, a measure of power for electrical current
(one thousand watts).
This off-grid home near
Red Wing, Minn., combines
wind and solar power. On the
roof are five solar thermal
collectors for space heating
and domestic hot water needs,
and two skylights provide day
lighting and passive solar heat
of the upstairs. A PV panel
array will be installed on a
pole-mounted tracker in
production data for the home,
completed in 2002, is not
available yet. The home
exceeds the energy code by 50
percent and incorporates
energy-efficient and environmentally sustainable features.
An ethanol-fueled generator
provides back-up power to the
kWh—Kilowatt-hour, a measure of energy equal to the use
of one kilowatt in one hour.
MW—Megawatt, a measure of power (one million watts).
O&M Costs—Operation and maintenance costs.
PUC—Public Utility Commission, a state agency which
regulates utilities.
PURPA—Public Utility Regulatory Policies Act (1978), 16
U.S.C. § 2601.18 CFR § 292 that refers to small generator
utility connection rules.
Rated output capacity—The maximum output power of a
solar electric panel operating in sunlight of 1000 W/m2 .
For More Information
Solar Electric
The Solar Electric House: A Design Manual for
Home-Scale Photovoltaic Power Systems This book
helps homeowners decide if photovoltaics are for them,
how to choose the right system and determine if they
want to install it themselves. By Steven J. Strong with
William G. Scheller, Sustainability Press, 1987 (revised
1991), 276 pages, $21.95, ISBN 0-9637383-2-1.
Solar Electric Independent Home Meant to educate
and spread the use of PV, this book was written
specifically for the PV homeowner or the potential PV
homeowner. Chapters on system sizing, appliances, home
wiring, system installation, lighting protection and the
National Electrical Code, explain how to use a PV system
for greatest efficiency. By Paul Jeffrey Fowler, revised
1993, 200 pages, 25 photos, 75 CAD diagrams, $16.95,
ISBN 1-879523-01-9.
The New Independent Home: People and Houses that
Harvest the Sun, Wind and Water The Independent Home
has become a best seller. Profiles solar homesteaders whose
experiments and innovations have opened the possibility
of solar living for the rest of us. By Michael Potts, Chelsea
Green Publishing, 1993 (revised 2000) 416 pages, illus.,
color photos, $30.
Government Agencies
The Energy Information Center at the Minnesota
Department of Commerce State Energy Office provides
energy efficiency and renewable energy information to
consumers. The Home Energy Guide series offers simple
but detailed information about improving energy
efficiency in the home. Many publications are available
about renewable energy resources. Experts are also
available to answer individual questions by phone or
email. For more information visit the Department of
Commerce web page at:, e-mail
at:, or call: 651-296-5175 or 1800-657-3710 (Minnesota only).
Energy Savers Tips on Saving Energy and Money at
Home A homeowner’s guide for saving energy and reducing
utility bills. Available free from U.S. Department of
Energy’s Energy Efficiency and Renewable Energy
Clearinghouse (EREC), P.O. Box 3048, Merrifield, VA 22116.
Phone: (800) 363-3732. Web site:
Energy Efficiency and Renewable Energy
Clearinghouse P.O. Box 3048, Merrifield, VA 22116. Phone:
1-800-DOE-EREC (363-3732). Web site:
National Climatic Data Center Federal
Building 151 Patton Avenue, Asheville, NC,
28801-5001. Phone: (828) 271-4800. Web site:
U.S. Department of Commerce, National Technical
Information Service 5285 Port Royal Road, Springfield, VA
22161. Phone: (800) 553-6847. Web site:
Non-Government Organizations
American Solar Energy Society 2400 Central Avenue,
Suite. G-1 Boulder, CO 80301 Phone: 303-443-3130. Email: Web site:
Interstate Renewable Energy Council, P.O. Box 1156,
Latham, NY 12110-1156. Phone: 518-458-6059. Email: Web site:
Midwest Renewable Energy Association (MREA) A
nonprofit network for sharing ideas, resources, and
information with individuals, businesses and communities
to promote a sustainable future through renewable energy
and energy efficiency. Host of the annual Renewable
Energy and Sustainable Living Fair. This three-day festival
is the world’s largest venue to learn about renewable
energy, energy efficiency, and sustainable energy systems.
The Fair offers more than 100 workshops presented by
experts from across the US and working demonstrations of
renewable energy and energy efficiency technologies. 7558
Deer Road, Custer, WI 54423 Phone: 715-592-6595. Email: Web site:
Minnesota Renewable Energy Society (MRES)
Established in 1978, MRES is a locally-based, non- profit
organization committed to developing awareness and use
of renewable energy sources across Minnesota. 1916 2nd
Ave South, Minneapolis, MN 55403-3927. Phone: 612-8723285. Web site:
Solar Electric Power Association (SEPA) A
collaboration of utilities, energy service providers and the
photovoltaic industry working together to create and
encourage commercial use of new solar electric power.
1800 M Street, N.W., Suite 300 Washington, DC 200365802. Phone: (202) 857-0898. Email: Web site:
Solar Electric
Solar Today An award-winning bimonthly
magazine that covers all solar technologies, from
photovoltaics to climate-responsive buildings to wind
power. Regular topics include building case studies, energy
policy and community-scale projects. Published by the
American Solar Energy Society. 2400 Central Ave., G-1,
Boulder, CO 80301. Phone: 303-443-3130. Web site:
Home Power Magazine The definitive magazine for the
homemade power enthusiast, published bimonthly. PO Box
520, Ashland, OR 97520 Phone: (800) 707-6586. Web site:
Web Sites
Minnesota Department of Commerce, State Energy
Office, Energy Information Center
A Minnesota clearinghouse for energy efficiency and
renewable energy information and resources within
Minnesota. E-mail: Web site:
The American Solar Energy Society (ASES) Provides
answers to frequently asked questions and information on
all aspects of solar energy. Web site:
Database of State Incentives for Renewable Energy A
comprehensive source of information on state, local,
utility and selected federal incentives that promote
renewable energy. A project of the Interstate Renewable
Energy Council (IREC)
Green Power Network Net Metering Web Site. Net
metering programs are now available in 30 states.
Solar Energy for Homeowners Offers things to
consider before investing in a small solar energy system
and also basic information about the systems.
National Renewable Energy Laboratory The U.S.
Department of Energy’s premier laboratory for renewable
energy research & development and a lead lab for energy
efficiency research and design.
This solar-powered lighting system is owned and
operated by the Minnesota Department of Natural Resources
and provides lighting at a remote public access point.
This publication is adapted from “Small Wind Energy
Systems” produced for the U.S. Department of Energy by the
National Renewable Energy Laboratory, a DOE Laboratory.
DOE/GO-102001-1293 ay 2001
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