This page is part of the Highest Good energy component of One Community and an open source guide to the setup and construction process needed to grid-tie remote energy infrastructure. It is purposed to help people understand the how’s and why’s of the grid-tie process, setup, and construction. This page was researched along with our Solar Incentive Rates and Net Metering Research (for West Coast states).
We discuss grid-tie remote energy infrastructure setup and construction with the following sections:
NOTE: THIS PAGE IS NOT CONSIDERED BY US TO BE A COMPLETE AND USABLE TUTORIAL UNTIL
WE FINISH OUR OWN DEMO CONSTRUCTION AND ADD ALL THE VIDEOS AND EXPERIENCE FROM
THAT BUILD TO THIS PAGE – IN THE MEANTIME, WE WELCOME YOUR INPUT AND FEEDBACK
There are several ways to execute an electrical supply plan when energy is generated at the point of use. One critical decision point is if the electrical supply is stand-alone (autonomous) or connected to the grid (semi-autonomous). In the United States, the grid is a system of 450,000 miles (724,205 kilometers) of high-voltage power lines and 160,000 miles (257,500 kilometers) of overhead transmission lines connecting centralized electrical power plants to homes and businesses (DOE). A grid-tied electrical system, also called a “tied to grid” or “grid-tie” system, is a semi-autonomous electrical generation or grid-energy system which links to a local electrical grid. It is a solar system that is connected to the electrical power grid. When self-generated electricity is available, any excess energy produced can be sent back to the grid. When insufficient self-generated electricity occurs, electricity can be drawn from the grid to make up for the shortfall. This is the nature of renewable energy options. Renewable energy systems available today do not generate a consistent stream of energy. These systems rely on environmental factors that are not always predictable or homogeneous or match the diurnal or seasonal fluctuations in demand.
These systems are connected via an inverter because a photovoltaic array (multiple PV panels) only delivers DC power that must be converted to AC power. This type of system then produces usable solar energy and funnels excess energy to the grid for net metering, clean energy credits, or later usage. If excess energy supplied to the grid is equal to the energy drawn from grid, your grid-tie sustainability plan has achieved net-zero energy use, also known as 100% power self-supply.
In our proposed location, there are 256 sunny days a year. This makes solar energy available 70% of the time. Because of the high solar radiation, we expect the net-total solar energy generation to be the same as the total demand, but we need backup energy systems covering the downtime. The current available technologies include connecting a PV field to a battery system, a generator, an electrical grid, or a combination of the aforementioned.
Despite the declining cost of batteries, connecting a PV field to a battery system is very expensive. The costs to install enough batteries to store the energy needed to run a proposed property like ours can be millions of dollars. Another option is connecting the PV field to a generator. During the downtime, the fuel-powered generators provide the electricity needed. However, no excess energy can be stored during the day when more solar energy available than the instantaneous demand. In other words, 100% self-supply cannot be achieved as the generator will require fuel to produce electricity when the instantaneous solar energy available does not meet demands and the energy generated beyond instantaneous demands has no way of being stored.
For a large scale PV farm like ours, connecting to a grid system is more economical compared to the other options. Off-grid battery based systems are expensive and unsuitable because excess energy produced during the day can be sent back to the grid and power can be accessed from the grid during solar downtimes. Utility-scale solar farm construction is also becoming more and more common. So most local power companies are available to supply the hardware and support the construction for connecting the field to their grid. Most importantly, we can still achieve a net-zero energy bill and demonstrate 100% self-supply/sustainable energy use.
This open-source / DIY How to Connect to the Grid guide will be the step-by-step tutorial for our project managers to build our grid-tie energy infrastructure. As part of our due diligence and design process we conducted research on what we’ll need to connect the PV field to the grid. We opted to open-source this content so others may benefit from our efforts, aligning with our Highest Good of All® strategy. Our goal in creating this for One Community and others looking to create grid-tie energy infrastructure is to save time and money by applying the knowledge and practices presented here.
We will continue to update this guide with everything we learn as we construct the 7 sustainable villages.
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This report includes a step-by-step construction guide/tutorial and preliminary cost estimation. We also include our research on analyzing power provider requirements, researching national guidelines, purchasing necessary equipment, paying permitting fees, and working with power companies for installation. If you are building a similar project, you can use all this as a starting point, modify it with local requirements and conditions, and develop your own project-specific guide.
We discuss this and more with the following sections:
Here are some advantages of connecting to the grid:
A grid connected system without batteries is the simplest and cheapest solar power setup available, and by not charging and maintaining batteries they are also more efficient. It is important to note that a grid connected solar power system is not an independent power source, like a stand-alone system. Should the main supply from the electrical grid be interrupted, the lights may go out, even if the sun is shining. It is required that solar power generation systems are shut off when the grid goes down, even though they can, technically, still produce electricity. This requirement is in place because if the solar system was pushing electricity onto the grid, it poses a threat to the utility workers who are fixing the issue. One way to overcome this is to have backup batteries or a diesel generator built into the design.
The first step in grid-tie research is understanding if your renewable energy system is capable of powering the proposed project (during full sunlight) without any connection to the electrical grid (in our case, it is). Then the following steps are recommended:
Solar incentives and tax credits help reduce the cost of installing solar for both residential and commercial energy users. They should be researched next.
There are two primary types of subsidies available for solar energy projects: state-level subsidies and federal-level subsidies. Many of the subsidies are provided as tax credits. In addition to the tax credits, there are a few subsidies that are provided through loan facilities and grant programs.
While there are many state and federal incentive programs for solar power projects, the key points we found for selecting an incentive program, before committing to construction, are:
One of the best incentives people can obtain to help reduce the cost of installing solar is the Federal Solar Investment Tax Credit, also known as the Investment Tax Credit (ITC). The ITC is a 26 percent tax credit for solar systems on residential and commercial properties. For example, if the estimated investment for our project is $2,000,000, the amount of ITC that can be used toward federal income taxes is: $2,000,000 x 26% = $520,000.
This means the amount of credit you are eligible for is tied to your tax liability. Consult with a tax expert to help you understand your specific situation and review all the guidelines, rules, and eligibility. For instance, if you use a financing arrangement through which a third party owns your solar panels, the company you are working with may be eligible for the commercial tax credit. Your tax consultant can review your eligibility if you are not familiar with tax credits.
Note: The Federal Solar Tax Credit is phasing down. Starting in 2023, the commercial and residential tax credits will decrease significantly. Below is the tax credit schedule for current and upcoming years as a percentage. After 2024, the residential credit drops to zero while the commercial credit drops to a permanent 10 percent.
In addition to the federal ITC, many states, counties, municipalities, and utilities offer rebates or other incentives for solar energy technologies.
State solar incentive programs vary among states and utility companies within the same state. Many states offer solar rebates for home solar power systems, in addition to the federal solar tax credit. For the most comprehensive and up-to-date information about current state incentive levels, see the Database of State Incentives for Renewable Energy (DSIRE).
The Utah solar tax credit for commercial projects, officially known as the Renewable Energy Systems Tax Credit (RESTC), covers up to 10% of the purchase and installation costs for commercial solar PV projects, and is capped at $50,000, whichever is less.
For example, the estimated total investment cost for our first couple phases of construction in the proposed location of Utah is $2,000,000. Therefore, the RESTC would be $2,000,000 X 10% = $200,000. Since the capped amount for Solar PV projects in the state of Utah is $50,000, the amount of commercial renewable energy systems tax credit is $50,000.
The Commercial incentive can be claimed only on the tax files in the same year as the solar system was installed.
Note: State tax credits for installing solar PV generally do not reduce federal tax credits, and vice versa. However, when you receive a state tax credit, the taxable income you report on your federal taxes will be higher than it otherwise would have been because you now have less state income tax to deduct. The Tax Cuts and Jobs Act of 2017 placed a $10,000 limit on state and local tax deduction, which may impact whether a state tax credit impacts federal taxable income. The end result of claiming a state tax credit is that the amount of the state tax credit is effectively taxed at the federal tax level.
For example, the net percentage reduction for a homeowner in New York who claims both the 25% state tax credit and the 26% federal tax credit for an $18,000 system is calculated as follows, assuming a federal income tax rate of 22%:
0.26 + (1 – 0.22) * (0.25) = 45.5%
Note that because reducing state income taxes increases federal income taxes paid, the two tax credits are not additive (i.e., not 25% + 26% = 51%). For an $18,000 system, the total cost reduction would not be $18,000*(25%+26%) = $9,180, but rather:
[$18,000 * 0.26] + [$18,000 * (1 – 0.22) * (0.25)] = $4,680 + $3,510 = $8,190
A grid-connected system allows you to power your solar project with renewable energy during periods when the sun isn’t shining. Any excess electricity you produce is fed back into the grid. When renewable resources are unavailable, in this case when it is not sunny, electricity from the grid supplies your energy needs. However, connecting to the grid is a complex process because you need to address safety and equipment requirements from the provider. Below are the steps you can expect.
Contact your power provider to learn about its specific grid connection requirements before purchasing the balance of system (BOS). The BOS is all the components of a photovoltaic system other than the photovoltaic panels. This includes wiring, switches, a mounting system, one or many solar inverters, a battery bank, and a battery charger. A BOS is needed to transmit excess electricity in a safe manner from the point of power generation to the power company and also back to the end user. Your local power provider will have specific requirements to this end.
Research national guidelines for equipment manufacturing, operations, and installation standards. Your supplier/installer, a local renewable energy organization, or your power provider will know acceptable standards of equipment manufacturing, operations, and installation that apply to your situation, and how to implement them. These standards are set to address the safety and power quality issues. Below are several organizations that are developing guidelines:
Confirm/finalize your Interconnection Agreement between you and the power provider. Most of the power providers require liability insurance to protect them in the event of an accident resulting from the operation of your system. In addition, agreements for metering and rates for feeding back excess electricity will also need to be agreed upon. Check with the power provider to see if there are others too.
There are three categories of BOS equipment for grid connection that need to be purchased:
Permitting fees will also need to be paid. They typically include engineering/inspection fees, metering charges (if a second meter is installed), and stand-by charges, which are the power provider’s cost of maintaining your system as a backup power supply when solar energy cannot cover the demand. As an example, the building department of Kane county Utah charges a minimum of $56 for all the meter based permits. Below are the fees charged by the Garkane Energy Cooperative who supply power to our proposed location in Utah. These numbers help to better understanding fees for a grid-tie connection.
Below here are the Interconnection Levels of Review:
“Level 1 Interconnection Review” means an interconnection review process applicable to an inverter-based facility having a generation capacity of 25 kilowatts or less.
“Level 2 Interconnection Review” means an interconnection review process applicable to a facility having a generation capacity of 2 megawatts or less and that does not qualify for or fails to meet Level 1 interconnection review requirements.
“Level 3 Interconnection Review” means an interconnection review process applicable to a facility having a generation capacity of greater than 2 megawatts but no larger than 20 megawatts, or the generating facility is not certified, or the generating facility does not qualify for or fails to meet Level 1 or Level 2 interconnection review requirements.
Install your BOS equipment and a second meter depending on the requirements of the utility company. Some utilities require you to have one electric meter that runs both forward and backward. Other utilities require two separate meters: one for incoming power you receive, and one for the power you generate that goes back into the system. These meters are sometimes paid for by the utility but may be part of your provider’s price for the system.
For more information about local incentives in your area, go to the national Database of State Incentives for Renewable Energy (www.dsireusa.org). This website also includes rules, regulations, and policies for many areas across the nation
If you still have problems related to the installation requirements or effective rules and regulations when establishing a grid-tie connection with a local utility provider, you may want to contact the appropriate person from the list of state energy contacts provided by the U.S. Department of Energy’s Energy Efficiency and Renewable Energy Network (EREN).
The cost to build a grid-tie system varies largely depending on the location of the project. In this section, a preliminary cost estimation for a grid-tie system is presented. These costs should be considered with care when applying to a specific site. Understand that they are just estimates though and affected by factors such as transmission lines, environmental and land cost, and government permit fees.
In general, the following information needs to be provided to the local power company to get the cost estimate:
The main capital cost for a grid-tie system is the cost of transmission lines. In this report, conventional AC transmission lines are considered. AC transmission lines can prevent the energy loss during transmission because power can be transmitted in high voltage, then changed to low voltage for use. Here are the equations for this:
Plost = I2R
As seen in the first equation, the power lost (Plost) through transmission is proportional to the square of the current (I) through the wire. Therefore, both minimizing current (I) and resistance (R) through the wire can reduce energy loss. However, reducing current has a much larger impact on the amount of energy lost due to its value being squared.
The second equation shows that if voltage (V) is increased, the current (I) is decreased equivalently to transmit the same power (Ptransmitted). Hence, the voltage through transmission lines is very high, which reduces the current, and this in turn minimizes the energy lost through transmission. It is much cheaper to change the voltage of an alternating current, thus making alternating current preferred over direct current for transmitting electricity over long distances.
All this said, the unit cost of conventional AC transmission lines vary largely depending on the voltage level, conductor size, land and environmental cost, and many other design conditions. This section provides a preliminary cost analysis based on the key design variables. Care should be taken in applying the data for site-specific analysis.
Data sources from Western Area Power Administration (WAPA) and Bonneville Power Administration (BPA) were used as our main sources of transmission line cost data. The composite database includes voltage levels from 13.8kV to 765kV. Even for a given voltage, the transmission line cost varies significantly because of different design factors, and land and environmental costs.
Cost estimates are also compared with cost data collected by the Federal Energy Regulatory Commission (FERC) for investor-owned utilities from across the United States. The only design specifications included with FERC data were voltage level and line length. With these limitations, the FERC data were not found to differ significantly from the composite database. Therefore, the composite database was judged to be a reasonable proxy for estimating national average costs.
Here are the results:
Note: This data is in thousands (“$000) of dollars and based on flat terrain. It does not include land, environmental, or construction supervision costs. See below for those costs.
Another comparable data point is from the Federal Energy Regulatory Commission (FERC). Although a few installations had per-mile costs outside of the corresponding composite data set range, as shown in the following table, the median of the FERC values for each voltage level lies within the composite data set range. The FERC data set ranges are from unspecified configurations, which is likely the cause of the difference – the results of the data must be used cautiously.
Note: Transmission line costs vary by voltage level. Higher-voltage transmission lines require thicker lines, therefore, costs more. Since this study is for a remote project that is quite far from the nearest power line, a higher voltage transmission line is needed to avoid electricity loss.
Land and right-of-way costs are all the costs required to acquire and prepare the land area for new potential transmission line projects. They are extremely site-specific. Land costs are based upon the acreage of land that the new transmission line would traverse. The total land affected is the length of the transmission line multiplied by the right-of-way width of the line.
Three approaches are analyzed, including BPA, WAPA, and FERC. They all indicate that the land and environmental costs, on average, represent less than 20% of the total cost.
For a WAPA approach, the land cost is 5.5%, environmental cost is 6.5%, planning cost is 0.75%, and the construction supervision cost is 7.5 %. For a BPA approach, the land and environmental cost is fixed. A mid-range price for environmental costs is $50,000, and a 125-ft right of way through a non-urban area land cost is $25,750 per-mile.
The land cost reported in the FERC data set has a median cost of 13% of the combined structure and conductor costs. This is consistent with the WAPA guideline (9-15%) for estimating land and environmental costs.
A significant cost driver for transmission line projects is the land and terrain types encountered. Different land types include flat terrain, rolling terrain, pasture land, crop land, suburban/urban land, forested, wetland, and level ground with light vegetation.
The line length for a transmission line is a consideration for determining its cost estimate for a potential project. For planning cost estimates, the line length is determined by the straight line distance between the two substations plus a 30% line length adder. The length adder is intended to account for routing constraints that will be determined upon further development of the potential transmission line project.
Underground installation can reduce outages because buried lines are not susceptible to damage from high winds, storms, and falling trees. Therefore, it generates a positive economic impact by reducing outage-caused downtime for business. Also, it looks better aesthetically.
The downside of buried cables is cost. Some associated costs include digging the trench, running the conduit, and backfilling the trench.When repaired, it can also take longer because the damaged area is usually more difficult to locate.
Overhead lines are more prevalent and easier to install. It can be used for high power and long-distance transmissions. The maintenance of it is also easier. However, the wire is exposed to the surroundings and can be damaged by weather. It is also less safe to surroundings than underground transmission because of the exposure.
The estimated cost for constructing underground transmission lines is 4 to 14 times more expensive than overhead lines of the same voltage and same distance. The cost difference between overhead and underground installation is similar across states.
The following table shows a construction cost summary for one mile of transmission line on flat terrain. Land, environmental, planning, and construction supervision costs are added to the base cost using average percentage multipliers (5.5%, 6.5%, 0.75%, and 7.5%, respectively) suggested by WAPA. If it is on rolling terrain, the number can be multiplied by a factor of 1.1. Costs below are in thousands ($000) of dollars.
Our specific grid-tie case study involves connecting a large-scale, approximately 2MW, PV solar farm to the grid system in Utah. The local power company in service is Garkane Energy Cooperative. Our project is about 5.11 mile away from the closest power line, thus requiring a new construction application. Garkane handles requests for new construction services in the order the requests are received, but will also consider the applicant’s circumstances and needs when establishing its design and construction schedules.
The application documents required vary somewhat depending on the type of facility serviced. The One Community grid-tie plan is considered a large commercial project (400 Amps Continuous, or 3-phase), therefore, the documentation required includes a new construction application, site plan showing the location of permanent power, load calculation, meter drawings, and equipment specs.
Once a new application is accepted and the job is progressed, a system designer contacts the applicant for an onsite appointment. During this appointment the system designer goes over proposed line routes, equipment locations, permits, right-of-way easements, and estimated costs. When complete project information is obtained and required documents are completed, the system designer design the job and determine the final cost estimate. All costs determined by Garkane are current unit construction costs, which include all costs necessary for the extension of facilities including design expenses, right-of-way investigation, and any necessary licenses and permits. Any changes to this design or additional trips to the site may result in additional expense to the applicant.
Cost estimates are valid for 90 days. Beyond 90 days, the estimate needs updating. If the job is not progressing after 6 months from the date of the original estimate, Garkane reserves the right to cancel/close out the job and any unused funds will be refunded.
From Garkane Energy’s website, the utility lines distribution was obtained. As shown in the following figure, there are currently no power lines (blue lines) going into the property. Therefore, a power line extension is required to connect the PV field to the grid.
We assume that the utility line can only be installed on paved roads or dirt roads. The distance from the closest power line to the property was measured in google maps in order to find out the length of the power line required. The total distance from the closest power line to the property is 8.22 km (5.11mi) as shown in the following figure. Blue lines are existing utility lines, and white lines and dots represent the proposed extension. This distance is comprised of 4.00km (2.49mi) of paved road and 4.22km (2.62mi) of dirt road.
An estimated cost was obtained from Garkane’s company website. For a distance of 5.11 mile or 26968.5 feet, an overhead power line extension is estimated to cost $271,380 total ($53,108 per mile power line extension). If an underground option is chosen, the estimated cost is $325,816 total ($63,760 per mile). For overhead to underground power line extension, the total estimated cost is $325,316, or $63,075 per mile. In this example, power will be transmitted above the ground until it reaches the destination, where remaining lines will be underground.
Projects crossing public lands, or endangered species habitat generally require that Garkane obtain permits from various governmental agencies prior to starting construction. In these cases, after receiving payment, Garkane’s system designer works with the appropriate authorities and environmental consultants to complete the permitting process. The cost of obtaining the permits depends on the land used. According to the study in the “land and environmental cost” section in this report, the land fee is approximately 5.5% of the transmission line cost. The land cost for underground, overhead, and overhead to underground options are $14,926, $17,920, and $17,892 respectively.
Construction of 3 phase services or services larger than 200 amp may require Garkane to order project-specific equipment. Additionally, projects requiring a large amount of construction materials will require that Garkane procure additional project materials. In these circumstances, the cost of the materials procurement is charged to the applicant, and varies depending on the project.
Garkane reserves the right to assess a flat charge for any construction delays that impact the Garkane construction crews. A construction delay is any trip to the job site made by a construction crew member where the scheduled work could not be completed by the construction crew because conditions at the site were different from what was represented by the applicant when the appointment was scheduled by applicant. A minimum charge of $200 per occurrence is typically assessed.
The plant investment fee shall be based upon the service main bus amperage and nominal service voltage. Where there is more than one service entrance, main breakers, and/or fuse sets, the investment fee is based upon the sum of such devices.
The following table shows a summary of estimated transmission line construction costs for our proposed location in Utah. Land, environmental, planning, and construction supervision costs are added to the base cost using the average percentage multipliers (5.5%, 6.5%, 0.75%, and 7.5%, respectively) suggested by WAPA. Material procurement cost, extra trip fees, and plant investment fees are not included at this point as more detailed design is required in order to estimate these fees.
The following table shows an instructive reference from the Association for the Advancement of Cost Engineering International (AACE). The different classes of cost estimation depends on the maturity level of the project, and thus the accuracy range differs. The cost analysis in this report generally aligns with Class 5, since its maturity level is 0-2%. Our project is in the concept screening stage. We estimated the cost per mile, and evaluated the total cost by scaling up from the per mile cost – thus using the capacity factored methodology. Based on being in Class 5, the cost estimation has an accuracy range of -50% to +100%. A more detailed cost estimate can be obtained when complete project information and required documents are submitted according to Class 5 cost estimation.
Tax credits and grants can help offset the above costs. All the below programs are available in our proposed location. The different types of incentive programs range from grants, loans, and bonds to tax credits.
Below are the comprehensive sources of information on federal and state incentives that are possibly applicable to our proposed project/location. Our objective is selecting the best suited program for our project.
Out of all of the programs above, the following three look like a good fit for our project:
Since our project is a non-profit solar project, the USDA-High Energy Cost federal grant program is a perfect match for our needs. The USDA offers grants for non-profit solar projects up to $3 million for improving both grid-connected and off-grid connected facilities.
The Alternative Energy Development Incentive (AEDI) (Corporate) is a good program that supports commercial solar systems. AEDI is a post-performance non-refundable tax credit of 75% of new state tax revenues (including, state, corporate, sales, and withholding taxes) over the life of the project or 20 years, whichever is less. The actual amount and duration of an incentive is determined by the Office of Energy Development (OED) on a case-by-case basis. The eligibility system size is 2MW or higher.
Another good option is the Alternate Energy Sales Tax Exemption. This is a sales tax incentive program offered by the Utah State Tax Commission. The State of Utah exempts from state sales tax the purchase or lease of equipment used to generate electricity from alternative resources. Applicable sectors are Commercial, Industrial, Investor-Owned Utility, Municipal Utilities, and Cooperative Utilities and the incentive amount is 100%.
A grid-tied electrical system, also called a “tied to grid” or “grid-tie” system, is a semi-autonomous electrical generation or grid-energy system which links to a local electrical grid. It is a solar system that is connected to the electrical power grid. When self-generated electricity is available, any excess energy produced can be sent back to the grid. When insufficient self-generated electricity occurs, electricity can be drawn from the grid to make up the shortfall. These systems often make more sense financially because the costs to install enough batteries to store the energy needed to run a large 7 sustainable village housing project like ours can be millions of dollars. We’ve done the research here to give people a starting-point estimate of how much such a grid-tie system can be expected to cost.
Q: What are your specific plans for your energy infrastructure?
Please see our open source rollout plan on the Highest Good Energy page and our individual open source tutorials for solar, wind power, and hydro.
Q: Have you researched energy exchange rates?
Yes, please see our Solar Incentive Rates and Net Metering Research for West Coast states page.
Q: What if I have a question that isn’t listed here?
Use this page (click here) if you have a FAQ you’d like to suggest be added here.
Falgun Patel: Mechanical Engineer
Jeson Hu: Aerospace Engineer
Luis Manuel Dominguez: Research Engineer
Prabhath Ekanayake: Electrical Engineering Assistant
Ramya Vudi: Electrical Engineer
Ron Payne: HVAC/Thermal Designer and Mechanical Engineer
Satish Ravindran: Senior Mechanical and Industrial Engineer and LEED AP
Shreyas Dayanand: Battery Research and EV Charging Consultant
Shubham Agrawal: Electrical Engineer
Vicente J Subiela: Project Management Adviser
Yuran Qin: MS Electrical and Computer Engineering (main web designer for this page)
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