In many states, homeowners and businesses can now sell solar panel energy to utilities. Doing so requires an interconnection agreement with your local utility.

Lowering Your Utility Bill

In a majority of states, homeowners using solar can take advantage of a concept known as net metering. Net metering essentially refers to the act of selling excess power produced by your solar panels to the local utility. While you are at work during the day, the energy produced by panels is fed directly back to the utility [your meter runs backwards] and then you use utility energy as you need it in the evening. The utility company pays you at the same rate per watt as what it charges you, thus creating a net metering situation. Practically speaking, it is a tremendous way to slash or eliminate your electrical bill.

If you intend to sell electricity to the utility company, you cant just do it. Instead, you must get and sign an interconnection agreement with it. While the name can change from utility to utility, this agreement basically lays out the ground rules on how the process will work. Lets take a closer look.

Federal and state laws require utility companies to supply you with standard interconnection agreements. The agreement specifies the terms and conditions under which your system will be connected to the utility grid. These can include your obligation to get any required permits, maintain homeowners insurance and meet certain connection specifications.

Sometimes set apart as a separate document, the agreement will also include the specifics related to the sale and purchase of power by each of you. Instead of installing multiple meters to asses the transfer of power, most utilities will simply let the existing utility meter run forward when you are drawing energy from the grid and backward when you are supplying energy to it.

If you supply more energy than you use in a month, must the utility company send you a check? Unfortunately, net metering laws do not require the utilities to do so. Instead, the company will credit the monetary equivalent of the excess generation to the next months electrical bill until you eventually use it during a cloudy or rainy month.

Interconnect agreements are fairly standardized agreements that shouldnt cause you much concern. Just make sure you get one before hooking up to the local utility.