California contractors, tell us truthfully: when is the last time you sat down and read the interconnection procedures for generation and energy storage systems enshrined in Rule 21?
We get it. People who go to work in the solar and storage industries usually are driven to put more renewable energy on the grid. You didn’t sign up for reams of bureaucratic paperwork. The Cliff’s Notes will do just fine, right?
We’ve got you covered. As you’ll see in today’s video conversation with Senior Design Engineer Taylor Bohlen, we’re genuinely excited about Rule 21. We’ve reviewed the source material and broken it down to a 12-minute summary.
Follow along to learn about some of the biggest mistakes we see people make in the Rule 21 process, and how net energy metering for energy storage systems furthers the essential goal of Rule 21, improving power management on the grid.
Josh Weiner: Hello, everyone. My name is Joshua Weiner. I’m here with Taylor from SepiSolar. We’re here to talk about Rule 21. Why it’s important. Why should you care. What’s involved. Common pain points. Lessons learned. I’m really excited to be meeting with Taylor because Taylor has been an engineer with us for how long?
Taylor Bohlen: Just about three years. A little over.
Josh: Awesome. And in that time, you’ve been doing design and engineering on various systems, right?
Taylor: Absolutely. Came in and started doing residential and quickly moved into the commercial world. And have been there ever since.
Josh: Awesome. And only just a couple of weeks ago, you gave this awesome presentation internally at SepiSolar about Rule 21 and how it’s important. I just loved what you presented. And I want us to be able to share it with our audience here because I feel like Rule 21 is this rule that governs almost all of our lives in some form or fashion as being solar guys or storage guys or microgrids. We’re interconnecting these systems into the utility grid on a regular basis. And I don’t know that many people have actually read it.
Before this, had you read Rule 21?
Taylor: No, I hadn’t actually dug through it with a fine-tooth comb. It’s about a little over 250 page document. So it’s definitely a significant read. But it’s one of those documents that pretty much governs every single system we’re putting into place here in California. So it obviously has a large impact on everything we do on a day-to-day basis.
Josh: I got to ask, how long did it take you to get through the 250 pages of Rule 21?
Taylor: You know, taking notes and getting everything together took about a week of solid reading and organizing and making sure I understood all the legalese that is the governing style of the document.
Josh: Yeah. I remember your summary of the 250 pages was itself like a 50-slide PowerPoint deck. Does that sound about right?
Taylor: Yeah. It was definitely a significant PowerPoint.
Josh: So let me just ask: Why should we care about Rule 21? Or who should care and why should they care?
Taylor: You know, I think pretty much everyone who touches the solar industry really has a vested stake in what Rule 21 has to say. Whether or not you’re a financer or a contractor trying to construct one of these systems. At the end of the day, your goal is to get permission to operate from the utilities so that you can cycle your system and start making value for your clients. And if you’re the person that’s installing the system, you obviously want to get it ready to go as soon as possible so you can start realizing the value that is available to you through solar energy.
Josh: And Rule 21, just for definition’s sake, governs pretty much any generator that needs to interact or interoperate with the utility grid, right? So Rule 21 doesn’t just cover solar, it covers tidal and hydro and fuel cells. Things like that, right?
Taylor: Absolutely. Pretty much any generating technology that’s available on the market. Rule 21 itself is all about interconnections to the grid under the context of generation.
Josh: Got it. What prompted you to even go down this path and explore Rule 21 to begin with? Was there something specific that happened either internally with SepiSolar. Or from something you experienced outside that prompted you to go and research this and report it?
Taylor: I think that engineering has such an integral piece to play with regards to both the interconnection process, but also creating the systems as a whole. And it felt like a good time to be able to pull together our engineering expertise and use that to leverage the ability of our clients to be able to get interconnection completed in as expeditious a manner as possible while making sure that everything is correct and complete and ready to go so that systems can operate as quickly as possible.
Josh: To that point, as quickly as possible. My experience of hearing you speak about Rule 21 was that it didn’t feel like a very quick process at all. It’s 250 pages for a reason. There is a lot of processes and sub processes. And I feel like you need this tree-branch chart that, you know, “if A then B.”
Can you talk a little about, is Rule 21 simple or complex? And if complex, how and why is it so complicated?
Taylor: Absolutely. I would say it’s very complex and there’s a lot of different, as you were alluding to, a lot of different avenues that projects can take depending on sizes, engineering constraints, and things on the utility side that can affect the systems. So it’s very important to delve into it and understand how the choices that you’re making with your projects can influence the system.
Especially given the context of moving quickly, it’s really important to essentially start this process and get yourself into the engineering queue for the utility as quickly as possible so that you can parallel as many of the processes that you have to do at the same time in order to get a system interconnected and make sure that you’re working as efficiently as possible, both for your own internal business as well as for your downstream clients.
Josh: So is that the bottleneck? Just getting submitted, like getting into the process so you can start going down this cascade of various steps and reviews that you have to go through to get any kind of interconnection approved?
Taylor: Absolutely. There’s something called the queue that the utility maintains, which is a really important piece of the puzzle that people often overlook and have been known to miss. A lot of people think that submitting an application is starting the process. When in fact, if you’re not submitting an application that’s complete and valid, you can add up to 20 to 25 days onto the entire process of getting interconnection.
Josh: OK. I know we get this a lot at SepiSolar. People are like, here are my utility bills. Here’s the information you need. Get it submitted right away. Quick, fast, fast, fast! That makes a lot of sense. We’re always in a hurry to get things going as quickly as possible. But what’s the problem with that? What could go wrong if you go too quickly?
Taylor: Absolutely. The utility explicitly within Rule 21 puts a premium on making sure that your information is complete and accurate the first time. So if you’re submitting an application, the utility’s got ten days to review the information. And if they deem that you’ve submitted everything correctly and your application is complete, then you get put into the queue at the day that you submitted.
If you don’t have everything complete and valid, they get that whole ten-day period to respond. Then you have to furnish the additional information. Then there’s another ten-day period for them to review. And then at that point, when they decide that you’re all set to go, you get placed in the queue when they make that decision. So there’s at least 20 days of flex time. And generally more if you need to gather information.
Josh: You just hit on a really interesting point. By submitting the information correctly the first time, you actually get a retroactive submission date, the date you originally submitted. But if you have an error or a mistake or a gap and you now have to begin a back and forth with the utility, you don’t get that date you submitted. You get some future date, whatever the utility decides.
Taylor: Exactly. And especially in areas that have a high crowding of solar technologies, that 20-day, 25-day period, there could be a lot of projects that get submitted in the same area, which could trigger downstream upgrades. So if you’re unlucky enough to be on the wrong end of that, you could be the system that ends up having to trigger the upgrades and you could have to wait a month, two months, six months, depending on how long it takes the utility to actually install the upgrade. So it’s really important that you lock down that queue position by making sure that you submit completely the first time you submit.
Josh: And if I were to ask, what do you think are the biggest mistakes you’ve seen our clients or contractors and EPCs, developers make throughout the Rule 21 process, whether it’s initial submission or something along the journey? What would you say is the biggest issue, mistake, problem, pain point that you’ve seen arise in the whole process?
Taylor: Going back to what I said a little bit earlier, I think the big pain point is that submitting isn’t starting despite kind of the common knowledge in the industry. And it’s really important that you make sure you’re submitting everything completely and cleanly on the first submittal. Otherwise you can lose lots of time and potentially open yourself up to significant risks that could increase downstream timelines quite considerably.
Josh: Tell me if I got this right. I feel like Rule 21 is—like you said, it applies to any generator that interconnects or interoperates in parallel with the utility grid, which to me sounds like the utility company is, reasonably so, trying to manage the power coming onto their grid. I mean, that’s what generators do. They inject power over time. And Rule 21 strives to define that and characterize it and run it through a bunch of engineering and administrative checks to make sure that the utility companies can indeed continue to operate their grid even after you’ve interconnected with it for everybody’s enjoyment. So it feels like a big power management exercise.
Do you think that’s a fair way to characterize the purpose of Rule 21? To put it really simply, it’s about managing all the power, which could be coming from top-down, big, huge generators on one end of the grid or bottom-up from a single residential homeowner on the completely opposite side of the grid.
Taylor: Absolutely. It’s all about power management at the end of the day. And there are two big factors that really come into that. First, obviously making sure that it’s safe. And that there’s not going to be any issues that could cause people to get hurt at any point.
Josh: Like UL ratings and stuff like that?
Taylor: Exactly. UL listings, but also things on the engineering side just to make sure that people won’t be working on energized lines or other considerations that could cause issues for line workers or people operating electrical equipment on the grid. The other, as you said, power management.
The utility is governed by a lot of different rules. Rule 21 is just one of them. And Rule 3 for new services. There’s a lot of requirements for the level and arrangement of the power that the utility gives you. The voltage that they have to remain within, and things of that nature. So they need to make sure that they’re still able to meet all of their legal obligations. Even with the addition of solar or any other generator that you’re trying to interconnect to the grid.
Josh: Got it. I get really excited about this in the context of storage, which at SepiSolar we obviously do a lot of. Because if the purpose of Rule 21 and the challenge we’re all having is managing power on the grid, then storage to me feels like this incredible engine, this incredible tool, to help mitigate the power impact on the grid while still being able to provide all the energy needs that the host facility or the end-use customer actually needs.
And we actually go and define this through a white paper that we have up on our website. It’s about NEM for storage where, in January of 2019, we actually pioneered the first policy that allocates NEM credits for energy discharge from a storage system precisely because it helps to manage power impact on the grid and for a variety of other reasons.
Well, this has been great. Taylor, thanks so much for your time and for talking to us about this. Rule 21 is super exciting. For those of you out there, please visit us at SepiSolar.com. Subscribe to our LinkedIn feeds and our Twitter feeds, as well as subscribe to our C+I project newsletter. And we’ll look forward to having more conversations like these—be they technical, administrative, and further discussions—as part of this video series.