Solar PV System Guide

CALIFORNIA ENERGY COMMISSION

Buying a

PHOTOVOLTAICSOLAR ELECTRIC SYSTEM

A Consumer Guide

2003 Edition

March 2003P500-03-014F

HA

ND

BOO

K

Gray Davis, Governor

Buying a Photovoltaic Solar Electric System: A Consumer Guide

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Buying a Photovoltaic Solar Electric SystemA Consumer Guide

California Energy CommissionWilliam J. Keese, ChairmanRobert Pernell, CommissionerArthur H. Rosenfeld, CommissionerJames D. Boyd, CommissionerJohn L. Geesman, Commissioner

Bob Therkelsen, Executive Director

Technology Systems DivisionMarwan Masri, Deputy Director

Technology Management Development OfficeJim Hoffsis, Manager

Renewable Energy ProgramTim Tutt, Technical Director

Project Manager and Principal AuthorKate Zocchetti

Technical AdvisorTony Brasil


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Table of ContentsWhat is a solar electric or photovoltaic system?.............................................................1

Is my home or business a good place for a PV system?..................................................2Is my site free from shading? ..............................................................................................2Do I have enough area? .......................................................................................................3Do I have a good roof? ........................................................................................................3How big should my PV system be? ....................................................................................4What features should my PV system have?.........................................................................4How much electricity will a PV system produce? ...............................................................5Is PV electricity expensive? ................................................................................................6

Investing in a PV system ...................................................................................................7How much does a PV system cost? .....................................................................................7Are incentives available to help reduce my costs? ..............................................................7What is the Emerging Renewables Program?......................................................................8What are the eligibility requirements for the rebate?...........................................................8What would my monthly payments be? ..............................................................................8Are there other incentive programs? ...................................................................................9Are tax incentives available? ..............................................................................................9How do I finance my PV system?........................................................................................9Will a PV system increase my property taxes?..................................................................10

Connecting a PV system to the utility grid ....................................................................10What is net metering? ........................................................................................................10Do I need a special meter? ................................................................................................10What is an interconnection agreement? .............................................................................11What should I know about Utility Interconnection Standards? .........................................11What should I know about permits and codes? .................................................................12How do I get the utility and inspection signoff?................................................................12What do I need to know about the system warranty? ........................................................13How do I insure my PV system?........................................................................................13

Selecting a PV retailer .....................................................................................................14How do I choose among PV retailers?...............................................................................14

Getting help ......................................................................................................................16

Contacts ............................................................................................................................17

Definitions.........................................................................................................................18

Acknowledgements and Disclaimer ...............................................................................21

Endnotes............................................................................................................................22


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List of Tables and Figures

Table 1 – Roof Area Needed for Various Sizes of PV Systems .........................................3

Table 2 – PV System Cost Estimates (before rebate) .........................................................7

Table 3 – Estimated Net System Cost/Monthly Payments .................................................8

Table 4 – Estimated Monthly Costs/Savings ......................................................................8

Figure 1 –Statewide PV System Production .......................................................................5


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What is a solar electric orphotovoltaic system?Buying a Photovoltaic Solar ElectricSystem: A Consumer Guide discusses thebasic technical, economic and regulatoryinformation you should know beforebuying a photovoltaic (PV) solar electricgeneration system.

This Guide is not a comprehensivetechnical or economic guide onphotovoltaic systems. For thatinformation, see the “Getting Help”section or consult an experiencedphotovoltaic system designer, retailer orsupplier. Unlike a solar hot watersystem that uses the sun’senergy to heat water, solarelectric or photovoltaictechnology uses the sun’senergy to make electricity.Learning from the worditself, the prefix “photo”means “produced by light,”and the suffix “voltaic” refers to“electricity produced by a chemicalreaction.” PV technology produceselectricity directly from the electronsfreed by the interaction of sunlight withcertain semiconductor materials, such assilicon, in the PV module. The electronsare collected to form a direct current(DC) of electricity. The basic building block of PVtechnology is the solar “cell.” Manycells may be wired together to produce aPV “module,” and many modules arelinked together to form a PV “array.” PVmodules sold commercially range inpower output from about 10 watts to 300watts, and produce a direct current likethat from a car’s battery.

A complete PV system usually consistsof one or more modules connected to aninverter that changes the PV's DCelectricity to alternating current (AC)electricity to power your electricaldevices and to be compatible with theelectric grid.1 Batteries are sometimesincluded in a system to provide back-uppower in case of utility power outages. PV cells can be made from severalprocesses or technologies. They all dothe same job — produce electricity fromsunlight. The basic types of inverters include:

True sine waveinverter. If you planto take advantage ofnet metering (see“What is NetMetering?”) and feedelectricity into thetransmission grid,then you must havethis type of inverter.

Most households use alternatingcurrent in their electric circuits,with power supplied from theutility at 120 volts and 60 cyclesper second. A true sine waveinverter transforms the directcurrent from the PV modules toalternating current of 120 voltsand 60 cycles per second. Thistransformation may alsosynchronize your system with theutility’s system.

Modified sine wave inverter.Similar to a true sine waveinverter, a modified inverter doesnot provide the same quality of60 cycle-current that can be fed


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back to the utility grid. Thisquality of power, however, canbe used at your home or businessto power many AC loads.

PV systems produce powerintermittently because they work onlywhen the sun is shining. More electricityis produced on a clear, sunny day withmore intense sunlight and with a moredirect light angle, as when the sun isperpendicular to the surface of the PVmodules. Cloudy days can significantlyreduce output, and of course no power isproduced at night. PV systems work bestduring summer months when the sun ishigher in the sky and the days are longer.Because of these variations, it is difficultfor PV systems to furnish all the poweryou need, and are typically used inconjunction with utility-suppliedelectricity.

Is my home or business agood place for a PVsystem?

First consider how much sunlight yoursite receives. Your property should haveclear, unobstructed access to the sun formost of the day, and throughout the year.In California, the sun is always in thesouthern half of the sky and is higher inthe summer and lower in the winter.

Generally speaking, thesouthern part of the statewill produce more PVelectricity than in the north.

Also, inland regions have more sunnydays and can potentially produce moreelectricity than coastal areas. (See “Howmuch electricity will a PV systemproduce?”)

The best orientation for a PV system ison a south-facing roof; however, roofsthat face east or west may also beacceptable. Flat, horizontally-orientedroofs also work well for solar systemsbecause the PV array can be mountedeither on the roof facing the sky or onframes tilted toward the south at anoptimal angle.

If a rooftop cannot be used, a PV arraycan also be placed on the ground, eitherin a tracking mount that follows the sunand orients the PV array to maximize theamount of electricity it generates, or in afixed mount.

Other options include mountingstructures that do double-duty bycreating covered parking areas, windowawnings or roofed patios.

If your location looks promising, a PVretailer can trace the sun’s path for youand determine whether your home orbusiness would benefit from a PVsystem. Other considerations for a goodPV site follow.

Is my site free from shading?

To make the best useof your PV system,you need most or allof the sun’s path to beclear and not shadedby trees, roof gables,

chimneys, buildings, or other features ofyour home and the surroundinglandscape.

Shading will substantially reduce theamount of electricity that your systemcan produce. Should you be in a


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situation where neighboring trees areshading your roof, keep in mind thatexisting California law establishes yourrights to receive sunlight on yourproperty (California Civil Code Section801.5 and California Public ResourcesCode sections 25980, et. seq.).

Do I have enough area?

The amount of roof space needed toroof-mount a solar system is based onthe size or "generating capacity” or“rating” of the system you purchase.Most residential systems require as littleas 50 square feet of mounting area for asmall “starter” system, or as much as500-1,000 square feet for a PV arraycapable of meeting all of a homeowner’s

needs. Commercial systems are typicallymuch larger than residential systems.

Discuss the size of your system withyour retailer. A rule of thumb is that asquare foot of single- or poly-crystallinePV module area produces 10 watts ofpower in bright sunlight. Therefore, a1000-watt system requires about 100 to200 square feet of roof area, dependingon the type of PV module.

The amount of roof area needed alsodepends on the PV module’s efficiencyin converting sunlight to electricity.Table 1 provides approximate roof arearequirements as a function of PVefficiency (percent) and rating (watts).

Table 1: Roof Area Needed for Various Sizes of PV Systems

PV capacity rating (watts)

100 250 500 1000 2000 4000 10000 100000

PVmodule

efficiency*(percent) Roof area needed in square feet

4 30 75 150 300 600 1200 3000 300008 15 38 75 150 300 600 1500 15000

12 10 25 50 100 200 400 1000 1000016 8 20 40 80 160 320 800 8000

*Although the efficiency (percent of sunlight converted to electricity) varies withdifferent types of PV modules, higher-efficiency modules typically cost more.

Do I have a good roof?

While a PV system can be installed onany type of roof, some types of roofs aresimpler and cheaper to work with thanother types.

Typically, composition shingle roofs arethe easiest to work with, and slate roofsare the most difficult. Between these are

shake roofs, flat concrete tiles andmission tile roofs. In any case, anexperienced PV installer will know howto work on all roof types and should useroofing techniques that eliminate anypossibility of leaks.

Solar electric roofing tiles are relativelynew PV products on the market. Thesetiles, similar in appearance to slate, are


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used instead of regular roofing materials,and can be used on both newconstruction or re-roofing. Solar electricroofing tiles can be sized to fit aconventional roof layout, or customizedfor different roof configurations.

Ask your PV provider if installing a PVsystem impacts your roof warranty. Ifyour roof is older and needs to bereplaced in the very near future, you maywant to replace it at the time the PVsystem is installed and avoid the latercost of removing and reinstalling yoursystem. If, however, your roof must bereplaced after the system has beeninstalled, some roofers will insist on atype of mounting system that usescommon roof flashing techniques toensure a watertight seal.

How big should my PV systembe?

Several factors will influence the size ofthe PV system you select. As a startingpoint, consider what your presentelectricity needs are.

One way to do this is by examining pastelectric bills. You could also contactyour utility and request the totalelectricity demand, measured inkilowatt-hours (kWh), for yourhousehold or business over the last 12months. Ask your PV provider howmuch electricity your PV system would

produce on an annual basis (alsomeasured in kilowatt-hours) andcompare it to your annual electricitydemand. This will also give you an ideaof how much money you will save onyour electricity bill once your PV systemis installed and generating.

If you want to meet 50 percent of yourelectricity needs with your PV system,you would choose a system sized toproduce about half of your usualelectricity demand.

What features should my PVsystem have? Some PV systems use batteries toprovide back-up power to your home orbusiness in case of utility grid outages.While batteries certainly add value toyour system, they also add cost andmaintenance. Keep in mind that batteriesand other electricity storage devices arenot covered under most incentives.

You should also consider the“economies of scale” associated withyour system, which means that a largersystem costs less per kilowatt-hourgenerated, even though it costs moreoverall. For example, many inverters aresized to accommodate systems up to fourto five kilowatts. If your PV array issmaller (say three kilowatts) you maystill end up buying the same inverter.Similarly, your PV provider is likely tooffer you a better price to install a two-kilowatt system all at once than one-kilowatt this year and one-kilowatt nextyear, because multiple orders andmultiple site visits are more expensive.On the other hand, putting a systemtogether in this “modular” fashion maybe more attractive financially, as itallows a pay-as-you-go approach.

The usable energy atypical house in Californiagets from sunshine in one

year is enough to satisfyeight times its total annual

electricity needs!


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How much electricity will a PVsystem produce?

PV systems produce the most electricityfrom spring through fall when the sun isshining. Energy production will vary, ofcourse, depending on geography andclimate. The following map provides veryapproximate statewide productionestimates for a 2-kW rooftop PV systemfacing due south at a 20-degree tilt.

In California, the “average” residentialcustomer uses 6,500 kWh per year. Asthe map shows, a two-kilowatt systemwould supply about 62 percent of theaverage customer’s total demand. A one-kilowatt system would probably supplyabout one-third of a customer’s load,while a three-kilowatt system mightsupply almost all of an averagecustomer’s needs. Naturally theseestimates vary depending on thecustomer's electricity load, thegeographic location, whether trackingdevices are used, weather conditions,and so on.

Figure 1: Maximum PV System Production in kilowatt-hours (1 kW system)

Source: Energy Commission staff estimates derived from Pacific Energy Group estimates.

CALIFORNIA

Deduct 15% from production ifsystem is to be located within 30miles of the coast. Deduct 7% ifsystem is located in valley regionssubject to fog conditions.

Central ValleyRegion

1680 kWh

1720 kWh

1820 kWh

2020 kWh

Coastal Zone


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Is PV electricity expensive?

PV-generated electricity is still moreexpensive than conventional utility-supplied electricity when amortized overthe life of the system. Althoughimproved manufacturing hassubstantially reduced the cost since the1970s, PV electricity can still cost about18 cents or more per kWh, depending onthe installed cost of the system.

Most of PV electricity’s cost comes fromthe expense of initially purchasing thesystem. This investment is like payingfor years of electricity bills all at once.You will appreciate the reduction in yourmonthly electricity bills, and theelectricity your system generates afterthe system has paid for itself is free;nevertheless, the initial investment canbe substantial.

Incentives can reduce this up-front cost,making PV systems a more affordableinvestment. Like any investment, youshould research your options before youmake a decision. This guide is intendedto help you make an informed decisionabout investing in a PV system for yourhome or business.

Electricity production and savingsexample

As discussed earlier, a number of factorsaffect system performance. A typicalfixed-mount PV system would produceless electricity than shown in Figure 1,usually about 80 percent of its maximumoutput. An ideal 1-kW rooftop PVsystem in an inland area of Los Angeleswould produce about 2,424 kWh ofelectricity annually.

The formula below uses this exampleand a 16 cents per kWh utility rate toestimate what your average monthlysavings might be.

Check your local utility rates to estimatethe value of the electricity your systemwould produce.

Remember that actual energy productionwill vary, depending on your specificgeographic location, the system’s angleand orientation, and the quality of thesystem’s components and installation.

Be sure to discuss these issues with yourPV provider and consider asking for awritten estimate of the average annual

energy production from the system. Anestimate can be accurate for an averageyear, but actual electricity productionwill fluctuate from year to year, based onnatural weather and climate variations.

Reminder: If electricity rates increasein future years, savings will alsoincrease. Conversely, if electric ratesdecline, savings from the PV system willgo down.

2,424 kWh x 16¢/kWh = $388/year, or about $32/month on average


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Investing in a PV system

How much does a PV systemcost?

The cost of your PV system will dependon many factors: the system’sconfiguration, equipment options, andlabor costs. Prices vary depending onother factors as well, such as whether ornot your home is new, and if the PV isintegrated into the roof or mounted ontop of the existing roof. The cost alsoscales somewhat with the system size orrating, and the amount of electricity itproduces.

As shown in Table 2, a small, single-PVpanel system with a built-in inverter thatproduces about 100 watts may cost about$900 installed; $9 per watt. However, sucha small system would offset only a smallfraction of your electricity bill.

A two-kilowatt system may cost $13,000to $20,000 installed, or $6.50 to $10 perwatt, and offset about half an averagehome’s electricity needs. At the otherextreme, a five-kilowatt system that willcompletely offset the electricity needs ofmany conventional homes may cost$30,000 to $40,000 installed, or $6 to $8per watt. (All above costs are beforededucting incentives.)

Table 2: PV System Cost Estimates (before rebate)

Watts Cost per Watt (dollars) Total System Cost (dollars)100 $9 $900

2,000 6 – 10 13,000 – 20,0005,000 6 – 8 30,000 – 40,000

PPrreessccrriippttiioonn ffoorr aa LLeeaasstt--CCoosstt PPVV SSyysstteemm1. Obtain at least three bids.2. Select a standardized PV system (offered by some retailers).3. Have an easy-to-install system mounted on a composition roof or the ground.4. Buy as a group to get volume discounts.5. Above all, shop around.

Are incentives available to helpreduce my costs?

Yes! Reducing your cost is the primaryfeature of the California EnergyCommission’s Emerging Renewables

Program. Tax incentives and netmetering also help make buying a PVsystem more affordable.


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What is the EmergingRenewables Program?

The California Legislature set asidefunds to reduce the up-front priceconsumers pay to purchase and installemerging renewable energytechnologies, such as solar photovoltaic.Among other criteria, rebate amounts arebased on the generating capacity of thesystem, measured in watts.

What are the eligibilityrequirements for the rebate?

Visit the Energy Commission’s websiteor call the toll free Energy Call Center tolearn more about the current eligibilityrequirements and available funds. (SeeFor More Information.) Additional questions you shouldconsider before making your finalpurchase decision follow.

What would my monthlypayments be?

Earlier we estimated the cost of a 2 kWPV system at $13,000 to $20,000, beforerebates. In this example we assume thatan installed 2 kW AC system2 costs$15,000 before rebates.

If you receive a rebate of $4 per wattfrom the Energy Commission, your netcosts after rebate would be $7,000($4/watt x 2000 watts = $8,000 rebate).Table 3 shows your estimated net systemcost and monthly payments, based on atwo-kilowatt, $15,000 system. In asimilar way, you can calculate yourmonthly loan payments and estimateyour possible net system cost --assuming a system is financed through abank, savings and loan or credit union(more about financing later).

Table 4 summarizes the electricitysavings, loan costs, and tax deductionsfor a two-kilowatt system costing$15,000.

Table 3: Estimated Net System Cost and Monthly Payments (2 kW AC system)

Total System Cost $16,235Rebate ($4/watt x 2,000 watts) $8,000Tax Credit $1,235Net cost/loan amount $7,000Loan period 20 yearsInterest rate 7 percentAnnual payments $660/yearApproximate monthly payments* $55/month

Table 4: Estimated Monthly Costs/Savings (2 kW AC system)

Monthly Costs/SavingsMonthly electricity savings $32.00Minus loan payments -55.00Income tax deduction3 17.00Net cost* -6.00


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*Tables 3 and 4 assume a loan of $7,000for a two-kilowatt system financed overa 20-year period at a seven percentinterest rate (typical of the terms ofmany home equity loans).

Note: The low-end estimate of$13,000 is used in these examplesbecause it represents theapproximate the “break-even”investment cost you should beaware of when pricing systems.To break even, the cost of owningand operating a PV system(including electricity savings, loanpayments and tax considerations)must equal your present electriccosts with your local electric utility.The net costs of a more expensivesystem will probably be higher thanthe anticipated savings, making itmore economical to purchaseelectricity from your utility.

To estimate the value of installing a PVsystem at your home or business, visitthe Energy Commission's website to usean interactive tool, the CleanPowerEstimator©. The Estimator providespersonalized estimates for PV systemsyou are considering, including electricityproduction, emissions reductions, andmonthly savings on your electricity bill.See the Getting Help section.

Are there other incentiveprograms?

Yes. Even if you do not qualify for theEmerging Renewables Program rebate,you may be eligible for other incentives.Most utilities — including the state’slargest municipal utilities, LADWP andSMUD — offer programs to help their

customers obtain PV systems for theirhomes or businesses. Contact your localutility for more information.

Are tax incentives available?

Yes, the U.S. government providesfinancial support for developing PVtechnology — through an investment taxcredit for commercial uses of solarenergy. This incentive provides businesstaxpayers (but not individuals orutilities) with a ten percent tax credit anda five-year accelerated depreciation forthe cost of equipment used to generateelectricity using solar technologies.

The State of California offers a stateincome tax credit on the purchase andinstallation of PV systems for bothresidents and commercial businessowners. Contact the Energy Commissionor the Franchise Tax Board for currentinformation.

How do I finance my PV system?

The best way to finance PV systems forhomes is through a mortgage loan.Mortgage financing options include yourprimary mortgage, a second mortgage,such as a U.S. Department of Housingand Urban Development Title 1 loan, ora home equity loan that is secured byyour property.

There are two advantages to mortgagefinancing. First, mortgage financingusually provides longer terms and lowerinterest rates than other loans, such asconventional bank loans. Second, theinterest paid on a mortgage loan isgenerally deductible from your federaltaxes. If you buy the PV system at the


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same time that you build, buy, orrefinance the house on which the systemwill be installed—adding the cost of thePV system to your mortgage is simpleand may avoid additional loanapplication forms or fees.

If mortgage financing is not available,look for other sources of financing, suchas conventional bank loans. PV systemspurchased for business applications areprobably best financed through acompany’s existing sources of funds forcapital purchases—usually SmallBusiness Administration loans orconventional bank loans. Because yourPV system is a long-term investment, thePV financing terms and conditions arelikely to be important factors indetermining the effective price of yourPV-generated electricity. Contact theEnergy Commission for a list of lenderswho are familiar with financing PVsystems.

Will a PV system increase myproperty taxes?

No. All PV systems installed from 1999until 2006 will not be subject to propertytaxes (Revenue and Taxation Code,section 73).

Connecting your PVsystem to the utility grid

All utilities in the state mustoffer the option ofinterconnecting on a netmetering basis to residentialand small commercialcustomers with PV or small

wind systems one megawatt or less(California Public Utilities Code section2827).

What is net metering?

As an eligible customer with a PV orsmall wind system, net metering allowsyou to interconnect with your utility andfeed your surplus electricity to the utilitygrid. You can use an equivalent amountof electricity later without additionalcost to you.

Net metering allows your electricitymeter to spin forward when electricityflows from the utility into your building,and backward when your systemproduces surplus electricity that is notimmediately used. Your excesselectricity is “banked” on the utility grid.

Under federal law, utilities must giveyou credit for any excess electricity yougenerate beyond what you use in yourhome or business, but they are notrequired to carry over your credit fromyear to year. At least once a year, youare charged for the net energy consumedover the previous 12 months.4

Most utilities have established simplifiedagreements for customers that qualify;be sure to ask your PV provider or yourutility for a net-metering agreement.

Do I need a special meter?

At a residence, netmetering can usually beaccomplished by usingyour existing electricitymeter. Utilities usuallyrequire businesscustomers without net-

metering agreements to use two meters:


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one to measure the flow of electricityinto the building, the other to measurethe flow of electricity out of thebuilding. For large commercial andindustrial customers who generate theirown power, this “dual metering”arrangement is still the norm.

What is an interconnectionagreement?

Interconnecting your PV system to theutility transmission grid will require youto enter into an interconnectionagreement, and a purchase and saleagreement. Most California utilities havedeveloped standardized interconnectionagreements for small-scale PV systemsas part of their implementation ofCalifornia’s net metering law. Theseagreements may be a single contractwith your local utility or separatecontracts with your utility and yourelectrical service provider.

The interconnection agreement definesthe terms and conditions under whichyour system will be connected to theutility grid, including the technicalrequirements necessary to ensure safetyand power quality. Other items in theagreement include your obligation toobtain all necessary permits for thesystem, maintain the system in goodworking order, and generally beresponsible for the system’s safeoperation.

The interconnection agreement alsospecifies the metering arrangements(usually net metering for residentialcustomers, dual metering for commercialand industrial customers), and any otherrelated issues.

Most utilities have established simplifiedinterconnection agreements; be sure toask your provider or utility. Thelanguage in these agreements should besimple and straightforward. If you areunclear about your obligations, youshould contact your utility or electricservice provider for clarification. If yourquestions are not adequately addressed,contact one of the “Getting help” listingsat the end of this Guide.

What should I know about UtilityInterconnection Standards?

Recent progress has been made indeveloping nationally recognizedstandards for utility interconnection ofPV systems. Although these standardsare not necessarily binding on utilities,many utilities are adopting them ratherthan developing their own.

The most important standard focuses oninverters. Traditionally, inverters simplyconverted the DC electricity generatedby PV arrays into AC electricity that isused in your home. More recently,inverters have evolved into remarkablysophisticated devices to manage andcondition power. Many new inverterscontain all the protective relays,disconnects, and other componentsnecessary to meet the most stringentnational standards.

Two of these standards are particularlyrelevant:

1. Institute of Electrical and ElectronicEngineers, P929: RecommendedPractice for Utility Interface ofPhotovoltaic Systems. Institute ofElectrical and Electronic Engineers,Inc., New York, NY (1988, withrevision being finalized in 1999).


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2. Underwriters Laboratories, ULSubject 1741: Standard for StaticInverters and Charge Controllers forUse in Photovoltaic Power Systems(First Edition). UnderwritersLaboratories, Inc., Northbrook, IL(December 1997).

You do not necessarily need to knowabout these standards, but your PVprovider and utility should. It is yourobligation to ensure that your PVprovider uses equipment that complieswith these or other relevant standards.

What should I know aboutpermits and codes?

In most locations, youwill need to obtainvarious permits fromyour city or countybuilding departmentbefore adding a PVsystem. You will likely

need to purchase a building permit, anelectrical permit, or both to legally begininstallation. Typically, your PV providerwill take care of this task, rolling theprice of permits into the overall systemprice. In some cases, however, your PVprovider may not know how much timeor money will be involved in obtaining apermit. In that case, permitting may bepriced on a “time and materials” basis.Make sure that permitting costs andresponsibilities are addressed with yourPV provider at the start of your project.

Code requirements for PV systems varysomewhat from one jurisdiction to thenext, but most requirements are based onthe National Electrical Code. NECArticle 690 carefully spells outrequirements for designing and installing

safe, reliable, code-compliant PVsystems. Because many localrequirements are based on the NEC,your building inspector is likely to relyon Article 690 for guidance indetermining whether your PV systemhas been properly designed and installed.

If you are among the first people in yourcommunity to install a grid-connectedPV system, your local government maynever have permitted one of thesesystems, and the building inspector mayhave never seen one. If this is the case,you and your PV provider can speed theprocess along by working closely andcooperatively with your local buildingofficials to help educate them about thetechnology and its characteristics.

You may live in a location where youmust gain installation approval from anarchitectural committee or homeowners’association to comply with the“Covenants, Codes and Restrictions”applicable to your home. If so, you oryour PV provider may need to seekagreement from your neighbors andsubmit your system plans to ahomeowner committee before you installa system. Complying with “CC&Rs” is avery important step that you shouldundertake before you begin installingyour PV system. If this process becomesan obstacle, contact one of the “Gettinghelp” listings at the end of this Guide.

How do I get the utility andinspection signoff?

After your new PV system is installed,your local permitting agency, usually abuilding or electrical inspector, and yourutility will probably need to inspect andsign off on your system. Depending onthe inspection, your PV provider may


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have to make corrections to your systemto satisfy the inspector’s requirements.Corrections are fairly common in theconstruction business, so don’t bealarmed if they are requested of you andyour provider.

A copy of the building permit showingfinal inspection signoff, and a recentutility statement showing electricalservice at the installation location, arerequired to obtain a rebate from theEmerging Renewables Program.

What do I need to know about thesystem warranty?

You are required to obtain a minimumfive-year full-system warranty againstdefective parts, workmanship, or unusualdegradation of output (performance) toqualify for an Emerging RenewablesProgram rebate. The equipment warrantymust cover the full cost of repair orreplacement of defective components. Ifthe system is professionally installed,rather than self-installed, the warrantymust also include the labor of removingand reinstalling any defectivecomponents and shipping costs. Askyourself, “Will this company standbehind the full-system warranty for thenext five years?”

If a qualified contractor installs theequipment and the installation price isincluded in the overall system price onwhich the rebate amount is based, thenthe required warranty should coverrepairs for five years.

On the other hand, if you install thesystem, you will have to bear the costsof replacing defective equipment. To beeligible for a rebate from the EnergyCommission, you must provide major

system component warranties from themanufacturer. You should consider thesewarranty implications in decidingwhether to install the system yourself.

The Emerging Renewables Program’sfive-year warranty requirementsupercedes any other warrantylimitations. In other words, if themanufacturer’s own warranty on aparticular component is less than fiveyears, the retailer or installing contractormust still provide you with a five-yearwarranty to be eligible for a rebate.

The warranty may have certainexclusions. These exclusions mayinclude, but are not limited to, failure toproperly operate and maintain thesystem, failure to comply withapplicable building codes and utilityrequirements, mishandling, neglect,vandalism, or acts of God.

The warranty may also containexclusions for systems that are notinstalled by either you or anappropriately licensed Californiacontractor, and for systems that are notinstalled in accordance with applicablesafety and building codes and localutility requirements. Be sure to carefullyread the warranty and review the termsand conditions with your retailer toavoid later misunderstandings.

How do I insure my PV system?

As described earlier, your electric utilitywill require you to enter into aninterconnection agreement. One or moreprovisions of this agreement may specifyminimum insurance requirements thatyou must keep in force.


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If you are buying a PV system for yourhome, your standard homeowner’sinsurance policy may be adequate tomeet the utility’s requirements.California law, however, does not allowa utility to require that you purchaseadditional insurance [California PublicUtilities Code section 2827 (F)].

If insurance coverage becomes an issue,contact one of the “Getting help” listingsat the end of this Guide.

Selecting a PV retailer

While some retailersoffer equipment onlywith no installation,many retailers canprovide completelyinstalled systems. In

some locations, finding a PV providercan be as simple as looking in thetelephone directory under “Solar EnergyEquipment and Systems —Dealers.”

Many of those listings, however, are forcompanies experienced in solar waterheating system installations, not in PVsystem design or installation. Similarly,many electrical contractors, althoughproficient in typical electricalcontracting work, may not haveexpertise in working with PV systems orwith residential roof mountingtechniques.

For sources of PV system retailers:

Contact the Energy Commission toget a list of retailers participating inthe Emerging Renewables Program.The list can be found at the EnergyCommission’s Web site at

<www.energy.ca.gov/programs> orby calling (800) 555-7794.

Contact either the California Solar

Energy Industries Association at(800) 225-7799 or by fax at (949)837-7430; or the Independent PowerProviders at (209) 841-7001. Bothorganizations maintain a list of PVretailers.

Conduct an Internet search forretailers in your area.

Reminder: If you purchaseequipment from an out-of-stateretailer, you will still be responsiblefor paying use tax on the purchase tothe State Board of Equalization(BOE). Check with the retailer onuse tax withholding or call the BOEat (800) 400-7115 for moreinformation.

Once you have identified severalcompanies, investigate further by askingthe questions outlined below.

How do I choose among PVretailers?

Once you have compiled a list ofproviders, the next step is to call and askthem questions. When contacting anycompany, consider its location relative toyours. Try to locate a PV provider whois relatively close to where the systemwill be installed and who meets the othercriteria outlined below.

When contacting companies, you mightask some of the following questions:

1. Has the company installed anygrid-connected PV systems?


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Experience installing grid-connectedsystems is valuable because someelements of the installation—particularly interconnection with thelocal utility—are unique to thesesystems. If the company does nothave this experience, has it installedoff-grid systems? Although grid-connected workdiffers from off-grid work, acompetent company with experienceon photovoltaic systems should notbe eliminated just because they havenot installed grid-connected PVsystems.

2. How many years of experiencedoes the company have installingPV systems? This issue speaks for itself: acompany or contractor that has beenin business a long time hasdemonstrated an ability to work withcustomers and to compete effectivelywith other firms.

3. Is the company properly licensed?

The Emerging Renewables Programrequires PV systems to be installedby an appropriately licensedCalifornia contractor. For PVsystems, this requirement meanseither an “A” (general engineering),B or C-10 (electrical) or C-46 (solar)contractor’s license.

Although using a properly licensedcontractor is highly recommended,individuals who have adequateelectrical and constructionexperience are not prohibited frominstalling their own system andqualifying for a rebate from the

Emerging Renewables Program. Adecision to do so, however, shouldbe carefully considered and onlyattempted with a clear understandingof the complexities of the job, thedifference in the rebate amount, andthe potential effects on the systemwarranty.

4. Does the company have any

pending or active judgements orliens against it? As with any project that necessitateshiring a contractor, due diligence isrecommended. The CaliforniaContractor’s State License Boardmaintains records of the work historyof contractors. These records can beaccessed at (800) 321-2752, or in theSacramento area at (916) 255-3900.Records can also be found on theBoard’s website at<http://www.cslb.ca.gov>.

5. How do I obtain and chooseamong competing bids?

You should get more than one bidfor your system installation, makingsure that the bids are made on thesame basis. Comparing a bid for aground-mounted system to a bid fora roof-mounted system, for example,would not result in a faircomparison. Similarly, there aredifferent types of PV panels, some ofwhich generate more electricity persquare foot than others.

Bids should clearly state thequantity, make and model of theequipment, including details aboutwhere it will be installed and themaximum generating capacity of thesystem, measured in watts orkilowatts. If possible, the bids should


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specify the system capacity in “ACwatts” as defined by the EmergingRenewables Program. Bids shouldalso include estimates of thesystem’s annual energy production,measured in kilowatt-hours.

Bids should also include the totalcost of getting the PV system up andrunning, including hardware,installation, connecting to the grid,permitting, sales tax, and warranty.

6. Is the lowest price the “best deal”?

It might not be. You must decidehow much you wish to pay for yourPV system, but price should not beyour only consideration.

Getting help

Many details about the EmergingRenewables Program are not addressedhere, but your qualified PV providershould be able to guide you through theprocess.

You can also contact the CaliforniaEnergy Commission. Obtain a copy ofthe Guidebook for the EmergingRenewables Program (CEC publicationnumber P500-03-001F). The Guidebookcontains more detailed programinformation and all necessary formsneeded to reserve a rebate, and to requestpayment after your system is installedand operating. Request a printed copy ofthe Guidebook from the EnergyCommission’s Call Center, or downloadit from the Energy Commission’swebsite.

Other helpful information can be foundon the Energy Commission’s website,

including lists of PV retailers, equipmentthat is eligible for the EmergingRenewables Program rebate, andcontacts for technical assistance andfinancing options. To use the interactiveweb tool, the CleanPower Estimator©,visit the Energy Commission's website atwww.consumerenergycenter.org.


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Contacts

California Energy CommissionCall Center(800) 555-7794 (toll free)(916) 654-4058 (outside California)Fax: (916) [email protected]

California Public Utilities CommissionSan Francisco Office (Headquarters)(415) 703-2782Utility complaints: (800) 649-7570www.cpuc.ca.gov

California Solar Energy Industries Association (CalSEIA)(949) 709-8043www.calseia.org

Northern California Solar Energy Association (NCSEA)(510) [email protected]

Pacific Gas & Electric Company (PG&E)(415) 973-7000(800) 743-5000 toll freewww.pge.com

San Diego Gas & Electric Company (SDG&E)(800) 411-7343www.sdge.com

San Diego Regional Energy Office866-SDENERGY (733-6374) toll freewww.sdenergy.org

Southern California Edison Company (SCE)(800) 655-4555www.sce.com


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Definitions

Alternating current (AC) – The flow of electricity that constantly changes directionbetween positive and negative sides. Almost all power produced by electricutilities in the United States moves in current that shifts direction at a rate of 60times per second.

Ampere (Amp) - The unit of measure that indicates how much electricity flows througha conductor. It is like using cubic feet per second to measure the flow of water.For example, a 1,200-watt, 120-volt hair dryer pulls 10 amperes of electricitycurrent. (amps = watts/volts)

Average Demand - The energy demand for a given location over a period of time. Forexample, the number of kilowatt-hours used in a 24-hour period, divided by 24,tells the average demand for that location in that time period.

Avoided Cost - The amount of money an electric utility would need to spend for the nextincrement of electric generation to produce or purchase.

Battery - Batteries are often sold with a PV system. The primary purpose is to store theelectricity not immediately used, which could be used at some later time. With netmetering, the value of batteries is less because the utility grid basically acts as astorage facility. For a reliable generation system that can function independent ofthe utility grid, however, batteries may be a viable component to the total system.Back-up generators may be included in a system to provide power when the PVsystem is not operating, and are generally included when systems are not gridconnected. Neither batteries nor generators are eligible for rebate money.

Circuit – One or more conductors through which electricity flows.

Converter – An apparatus that changes the quantity or quality of electrical energy.

Customer load - The amount of power your site uses. Load may be expressed inkilowatts (capacity) or kilowatt-hours (energy). A site’s peak kilowatts generallyrefer to when electric demand requirements are highest.

Demand - The level at which electricity (or natural gas) is delivered to end-users at agiven point in time. Electric demand is measured in kilowatts.

Direct current (DC) – The flow of electricity that flows continuously in one direction.

Frequency - The number of cycles through which an alternating current moves in eachsecond. Standard electric utility frequency in the United States is 60 cycles persecond, or 60 hertz.


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Definitions

Grid - The electricity transmission and distribution system that links power plants tocustomers through high-power transmission line service.

Hertz - The unit of electromagnetic wave frequency that is equal to one cycle per second.

Interconnection - The linkage of transmission lines between two utilities, or between autility and an end-user, enabling power to be moved in either direction.

Inverter - Device used to change direct current electricity to alternating currentelectricity.

Kilowatt (kW) –1000 watts. A unit of measure of the amount of electricity needed tooperate given equipment. For example, one kW is enough power to illuminate 10light bulbs at 100 watts each. (volts x amps = watts)

Kilowatt-hour (kWh) – the amount of kW produced over a period of time, or onekilowatt of electricity supplied for one hour. For example, a one kW system, ifoperating at full capacity for 5 hours will produce 5 kWh of electricity.

Megawatt – One thousand kilowatts or one million watts. One megawatt is enough topower 1,000 average California homes per day.

Meter – A device that measures levels and volumes of customers’ electricity and gas use.

Mounting equipment - Equipment/apparatus used to fasten PV modules to the roof.

Peak load - The highest electrical demand within a particular period of time.

Photovoltaic cell – A device that produces an electric reaction to light, producingelectricity.

Solar Energy – Heat and light radiated from the sun.

Solar Thermal - The process of concentrating sunlight to create high temperatures thatare needed to vaporize fluid to drive a turbine for electric power generation.

Storage - Storage refers to saving surplus electricity produced by a PV system. Generallybatteries are used as storage devices.

Tracking equipment - Structure that houses PV modules and that can automaticallyfollow the sun across the sky throughout the day to maximize output.


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Definitions

Utility grid - The interconnection of electricity generation plants through thetransmission and distribution lines to customers. The grid also refers to theinterconnection of utilities through the electric transmission and distributionsystems.

Volt - The amount of force required to drive a steady current of one ampere through aresistance of one ohm. Electrical systems of most homes and offices use 120volts. (Volts = watts/amps)

Watt (W) –Electric measurement of power at one point in time, as capacity or demand.For example, light bulbs are classified by wattage. (1000 watts = 1 kilowatt)


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Acknowledgements

About this Guidebook

Buying a Photovoltaic Solar Electric System: A Consumer Guide is based on a similarbuying guide, Consumer’s Guide to Buying a Solar Electric System, authored by ThomasStarrs and Howard Wenger, and funded by the U.S. Department of Energy’s NationalRenewable Energy Laboratory (NREL). With the express permission of NREL,California Energy Commission staff updated NREL’s Consumer Guide, making the newGuide specific to California.

We appreciate the various retailers of photovoltaic solar electric systems who offeredcomments and suggestions on this Guide. We apologize for any errors or omissions, andwelcome suggestions to consider for future editions of this Guide

About the Renewable Energy Program

The Energy Commission has long been an advocate for clean, sustainable energy,demonstrating its commitment most recently by developing and implementing thisinnovative program that fosters the growth of the renewable energy market in California.With the long-term goal of a fully competitive, diverse and sustainable renewable energysupply in the state, the Renewable Energy Program has vigorously pursued investmentsin renewable resources since its inception in 1998.

DisclaimerReferences in Buying a Photovoltaic Solar Electric System: A Consumer Guide to anyresources, products, companies, or services are provided as a public service, and are notan endorsement, recommendation, or favoring of same by the California EnergyCommission. The State of California and the California Energy Commission and itsemployees make no warranties, express or implied, and assume no legal liability for theinformation included in this Consumer Guide.


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Endnotes

1. PV systems do not necessarily have to use an inverter in order to produce usablepower. For example, many “off-grid” systems use DC power to operate lights andmotors. On-grid systems can also use DC power but the DC circuits in the home mustthen be separately connected to the rest of the home’s electric system through the useof a charge controller.

2. The AC system rating for the Energy Commission’s Emerging Renewables Program

is determined by multiplying the PTC rating of the module array by the inverterefficiency.

3. Assumes interest is deductible from a home equity loan, and assumes your combinedstate and federal income tax rate at 30 percent.

4. You are permitted to pay for net energy consumed on a monthly basis as well.

Documents

Solar PV System Guide