An Interconnection Agreement is the formal contract between a solar system owner (or installer/developer) and the utility company that allows the solar PV system to connect to the electrical grid. It outlines the technical, safety, operational, and administrative requirements that must be met before a solar installation can export or import electricity through the utility network.

The agreement ensures that the distributed energy system—whether residential rooftop solar or a large commercial installation—operates safely, does not compromise grid stability, and complies with local interconnection standards. It is a core component of the solar project lifecycle and significantly impacts project timelines, design decisions, and financial modeling.

Interconnection Agreements are required for grid-tied PV systems, net metering, export-based incentives, battery storage systems, and EV-charging integrations. Solar designers typically prepare for the agreement during system engineering, often using software tools like Solar Designing to ensure voltage, conductor sizing, AC configurations, and inverter placements meet utility standards.

• An Interconnection Agreement is the utility’s approval for a solar system to operate in parallel with the grid.
• It outlines technical, safety, metering, and operational rules for grid connection.
• Required for all grid-tied solar installations, net metering systems, and hybrid systems.
• Impacts inverter settings, system size, export rules, and project timelines.
• Proper documentation and early planning dramatically speed up utility approval.

What Is an Interconnection Agreement?

An Interconnection Agreement is the utility's official approval for a solar energy system to operate in parallel with the grid. It defines:

• How the PV system connects to the grid
• Required equipment (inverters, disconnect switches, meters)
• Safety protocols and anti-islanding requirements
• Export rules (full export, limited export, zero export)
• Billing and net-metering arrangements
• Inspection and commissioning procedures
• Communication and metering requirements

It protects the grid from unsafe or unstable energy flows and protects the system owner from regulatory or compliance issues.

Related foundational terms include Inverters, Grid-Tied System, and Export Limiting.

How an Interconnection Agreement Works

While the process varies by region and utility, the typical steps are:

1. Application Submission

The solar installer submits required documents, such as:

• System design drawings
• One-line diagrams
• Equipment specifications
• Site maps
• Shading and production estimates
• Electrical load details

Tools like Solar Designing help generate compliant line diagrams and layouts.

2. Utility Engineering Review

The utility evaluates:

• Grid capacity
• Transformer loading
• Voltage rise impacts
• Fault current contributions
• Anti-islanding requirements
• Equipment compliance (UL 1741, IEEE 1547)

3. Conditional Approval

The utility may request:

• Design adjustments
• Export limitations
• New meter installations
• Additional protection devices

See Export Limit Control for configurations.

4. Installation & Inspection

Once approved, installers build the system.

The utility performs:

• Site inspection
• Witness testing
• Meter upgrades

5. Permission to Operate (PTO)

The final authorization allowing the system to generate AC power and export to the grid.

6. Ongoing Compliance

Some agreements require operational reporting, periodic equipment checks, or inverter configuration updates.

Types / Variants of Interconnection Agreements

1. Net Metering Interconnection Agreement

Allows the customer to send excess solar electricity to the grid and receive credits.

2. Grid-Tied Export Agreement

Allows full export based on utility capacity.

3. Limited Export Agreement

Used when the grid has constraints; solar output is capped.

4. Zero-Export (Non-Export) Agreement

Customer generates solar power but sends no energy to the grid.

Often requires inverter controls or CT-based limiters.

See Zero-Export Constraint.

5. Battery-Integrated Interconnection Agreement

Specifies rules for hybrid systems, charging behavior, and export protocols.

6. Large-Scale Commercial/Utility Interconnection Agreement

Detailed engineering studies required, including:

• Load flow analysis
• Short-circuit studies
• Protection coordination
• Grid impact analysis

How It’s Measured / Evaluated

1. AC Capacity (kW or MW)

Determines grid impact and interconnection limits.

2. Export Limit (kW)

Approved grid export quantity.

3. Voltage Rise (%)

Utilities evaluate acceptable voltage increases due to PV injection.

4. Fault Current Contribution

Measured in amps (A), important for protection device settings.

5. System Compliance

Engineer confirms adherence to UL, IEEE, and utility standards.

Typical Values / Ranges

Timelines vary from 1–12 weeks, depending on utility workload and system size.

Practical Guidance for Solar Designers & Installers

1. Start interconnection planning early

It can impact inverter selection, layout, and export strategy.

2. Use accurate system drawings

Tools like Solar Designing help produce clean, compliant diagrams.

3. Validate grid capacity for the site

Utilities often publish hosting capacity maps.

4. Be prepared for export limitations

See Export Limiting for strategies.

5. Align with AHJ and utility rules

Requirements vary significantly between jurisdictions.

6. Ensure safety equipment matches utility expectations

This includes:

• AC disconnects
• Rapid shutdown devices
• Metering enclosures

7. Review inverter anti-islanding behavior

Compliance is essential for PTO approval.

8. Maintain clear documentation

Accelerates review and avoids back-and-forth delays.

Real-World Examples

1. Residential Rooftop Solar (5 kW)

An installer submits a simple interconnection application including a single-line diagram and equipment data. The utility approves in under one week, followed by a meter upgrade and PTO.

2. Commercial Flat Roof (150 kW)

The utility identifies limited transformer capacity. The project is approved with a 70 kW export limit, requiring controlled inverter settings.

3. Industrial Ground-Mount (1.5 MW)

A full interconnection study is required, including load flow and protection analysis. The utility mandates a transformer upgrade before issuing PTO.

• Grid-Tied System
• Export Limiting
• Inverter Sizing
• Stringing & Electrical Design
• Zero-Export Constraint