MEMBERS-ONLY FACT SHEET
System Size Calculations for Interconnection and NEM Grandfathering
November 21, 2024
The utilities have different methodology for calculating system size for different purposes. It would be better policy for them to always use the lesser of inverter nameplate and CEC-AC, and to always allow power control systems (PCS) to limit system size. CALSSA will continue striving for that, but it is not currently the case. Here we explain our current understanding of how the utilities treat system size for different purposes.
1. Modifying a Pending Fast Track Application
When making equipment changes in pending applications for systems that have not been installed, system size is calculated as the lesser of inverter nameplate and CEC-AC.[1] All three IOUs are clear on this, and any reviewers who give contrary information are not acting in accordance with their utility.
For AC-coupled paired storage systems, system size is the sum of solar size and storage size. For solar, calculate the lesser of inverter nameplate and CEC-AC. For storage, use the storage inverter nameplate for PG&E and SDG&E. SCE has released guidance that they use storage continuous discharge rating rather than inverter nameplate for the storage size. For example, if the solar inverter nameplate is 10 kW, CEC-AC is 15 kW, and storage inverter or storage discharge rating is 12 kW, the result would be 22 kW.
For DC-coupled paired systems, total system size is the inverter nameplate in most cases. If your inverter is oversized, you may be able to use solar size plus storage discharge rating. SCE has released guidance that system size is calculated as lesser of (CEC-AC + storage discharge rating) and inverter nameplate. For example, if the inverter nameplate is 10 kW, CEC-AC is 15 kW, and storage discharge rating is 12 kW, the result would be 10 kW. As another example, if the inverter nameplate is 30 kW, CEC-AC is 15kW, and storage discharge rating is 12 kW, the result for SCE would be 27 kW.
The rules do not allow customers to increase system size on pending Fast Track applications. If the customer wants to reduce system size by more than 20%, PG&E allows customers to do this all circumstances. The customer just needs to pay a $300 restudy fee. SCE only allows this same option when the customer is decreasing system size to avoid an upgrade. CALSSA is investigating whether SDG&E will allow this in other circumstances.
2. Modifying a Pending Non-Fast Track Application
When systems go into Detailed Study, there is more likelihood that modifications will be needed, and therefore Rule 21 is less strict about the types of changes that can be made without withdrawing the application. If the modification does not require significant restudying, the IOU will likely accept the modification without requiring application withdrawal. In this scenario, the contractor works with the reviewer to determine what is reasonable.
3. Modifying a System That Already Has PTO
For NEM systems that want to preserve their current NEM status, the customer can only expand their system by up to the greater of 10% and 1 kW.[2] There are two exceptions to this. First, if the expansion is non-exporting, then the 10%/1 kW rule does not apply. Second, the CPUC ruled that customers can add storage and retain their original NEM status.
A. Only Adding Storage
The CPUC ruled that customers can add storage and retain their original NEM status.
In the specific scenario where the added storage device is DC-coupled and the solar inverter would therefore be replaced with a larger solar shared inverter, the IOUs have claimed that the CPUC exemption for retaining NEM status when storage is added does not apply. Utilities are concerned that there would be increased solar production in some cases. CALSSA is only aware of this being an issue for the Tesla Powerwall 3. However, in the case of the Tesla Powerwall 3, customers can choose to AC-couple it, which would allow the customer to maintain their NEM status.
B. Adding Non-Exporting Solar and Storage
You can add more than 10% to an existing NEM system and maintain NEM status if the additional capacity is controlled separately as non-exporting. For this case, see the separate CALSSA fact sheet titled, “Non-Export Systems.”
C. Adding DC Solar Capacity
If an existing system is limited by the inverter (DC-AC ratio greater than one), you should be able to add solar modules without changing the inverter and have it treated as no change to system size. SCE and SDG&E allow this, but PG&E does not.
SCE and SDG&E have released guidance that system size in this situation is calculated as the lesser of inverter nameplate and CEC-AC. PG&E has insisted that they retain the ability to calculate system size as CEC-AC only, which is more limiting. For PG&E, the customer can only expand their system size by up to the greater of 10% and 1 kW, even if the original system was limited by the inverter.
If the customer wants to add storage and keep their NEM status, and also add panels to an inverter limited system, it is probably necessary to do this as separate applications. You can first add storage only, and after obtaining PTO submit another application to add modules.
4. Estimated Annual Production
For AC-coupled systems, estimated annual production is calculated as the kWh output associated with the lesser of inverter nameplate and CEC-AC.
The same should be true for DC-coupled systems. In most cases CEC-AC would prevail because the inverter is sized for both solar and storage. However, PG&E has been insisting on using inverter nameplate. This is a miscalculation, and CALSSA is pressing PG&E to fix it.
5. Prevailing Wage 15 kW Threshold for Multifamily
AB 2143 requires all systems for commercial customers to pay prevailing wage and possibly also follow other public works requirements. The exception is multifamily with systems smaller than 15 kW. PG&E has stated that for NBT systems they use the lesser of inverter nameplate and CEC-AC, and for NEM systems they use only CEC-AC. CALSSA is pressing them to use the “lesser of” methodology in all cases.
6. Cost and Study Responsibility
Systems larger than 1 MW must pay for all grid upgrades. For this purpose, for NBT paired storage projects that employ PCS or some other recognized facility limiter, the IOUs will take that into account.[3] If the storage device is limited by a PCS to a certain export level, the IOUs will recognize this instead of the storage discharge rating. If the entire facility is limited by a PCS or other limiter to a certain export level, the IOUs will recognize this.
PG&E has stated that it may require telemetry at the customer’s expense if inverter nameplate >= 1 MW. See PG&E Rule 21 Section J.5 for more information on this requirement. It is likely that SCE and SDG&E also use the same rule.
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[1] Rule 21, Table F.1.
[2] CPUC D.14-03-041, p. 27.
[3] PG&E AL 7155-E, p. 2.