How do I sell solar power to a utility company ?

If you’ve taken or are thinking of taking the energy-efficient step of installing solar power at your home or business, know that this move can be cost-effective, too. The initial investment for a solar panel system can be quickly paid for by selling your surplus energy to a utility company.

The government requires 42 states and the District of Columbia to purchase surplus power from consumers. The way to take advantage of this process, and the subsequent rate you will receive for your surplus energy, varies by state. Here is a quick guide to getting the most out of your extra solar generated energy.

Technical Requirements

The first thing you’ll need when attempting to determine how much energy you’re generating and how much of that energy you can sell is to check your energy measuring equipment. Most existing homes and businesses will have a power meter attached to them with gauges that run forward and backward, tracking energy use. Inside the meter should be what is known as an ‘inverter.’ The inverter allows the company to measure how much power you are generating.

Interconnection Specifics

Each utility will have different interconnection standards to allow you to sell power back and forth. The best thing to do is to contact the utility directly and find out what type of interconnection terms and policies they offer. As part of the interconnection agreement, some states require you to purchase home owner’s insurance, for example, or obtain certain permits.

Net-Metering Rates

Although some utility companies may have their own specific policies, in general there are a few standard methods of reimbursement for surplus power, known as net-metering. If you generate more power than you use from the electric company in a given month, you will see a credit applied to your bill. At the end of a year, if you have a surplus of energy, you may be paid in cash, at a wholesale rate, per kilowatt hour. What this means is that the utility will pay you what it costs to generate the power, and not the end-user mark-up.

For example: if a kilowatt hour costs 2 cents an hour wholesale, but is sold for 9 cents an hour, you would be paid 2 cents per hour, not 9.

Becoming an Independent Power Broker

Most home installations of solar panels will generate a modest surplus. However, if you have invested heavily in solar technology, in New Jersey you can become an independent power broker and sell groups of 1,000 kilowatt hours to utilities. The price of the hours is not fixed, but can range up to $265 per 1,000 kilowatt hours. Some individuals, like Carl Baldino of New Jersey, clear $3,000 annually in profit from the generation of these extra kilowatt hours.

Specifics in Your State

An excellent way to keep up to date on developments in energy regulation is to visit www.dsireusa.org, which is the website for the Database of State Incentives for Renewables & Efficiency. This website tracks the passing of laws and how those laws affect the buying and selling of energy for all 50 states in the union.
A variety of states, including Arizona and Indiana, offer either tax incentives or rebates to customers who are energy efficient.