Sue and George Edwards decided in early 2016 to take the plunge and buy a rooftop solar-energy system for their Swarthmore house. Once they signed a contract, they figured they soon would be producing their own power.

But a process they anticipated would take weeks to complete instead took the better part of the year. As delays mounted, so did costs.

Peco, the electric utility in the region, told the Edwardses that it could not connect their 3.8-kilowatt system because it might elevate the voltage beyond legal limits for their neighbors. It would cost the couple $1,300 to modify the utility's network to accommodate their solar system.

"I had no clue this would be a problem," said Sue Edwards, an environmental activist. She grumbled about having to bear the cost of upgrading Peco's equipment.

Growth in Solar Installations

Solar installations have increased more than 1,500 percent since 2010, including tenfold growth among residential customers. The new power production is forcing utilities to rethink the way their distribution grids are configured to accommodate the changing flows of power.

Annual solar photovoltaic installed capacity, in megawatts
Staff Graphic

The solar installer shared the Peco fee, and the system was put in place in November - after the homeowners redid their roof, which added $20,000 to the price of the $12,700 solar system. But the Edwardses are still not sending solar power into the grid because Peco has yet to make the final connection.

"They don't like competition from nature," said George Edwards, expressing a common sentiment among solar advocates.

The couple's experience was not unusual. Of the 50 customers who signed up for solar through a community group's Solarize Greater Media campaign, 16 were initially rejected by Peco because their systems were incompatible with the utility's network.

Solar installers say that Peco's process for reviewing and approving solar jobs is fraught with obstacles, and that customers have experienced a high rate of denials because the utility's older distribution system was not designed to handle new customer-generators.

"There seems to be some underlying resistance from utilities to solar," said Ron Celentano, a Flourtown consultant  and president of the Pennsylvania Solar Energy Industries Association. "You see it all over."

Peco says it experienced a surge of interest from potential solar customers in 2016, attracted by the declining price of solar panels and a 30 percent tax credit. Through November, the utility received 3,515 requests from customers to connect solar systems, quadruple the total applications it received in 2015.

"We're making the commitments to expand and enhance the organization to respond to this increase," said Ben Armstrong, Peco's spokesman.

The utility has revamped its review process and added 12 new employees to streamline the assessments, Armstrong said. Peco also is developing an online portal to allow solar installers to submit plans and payments electronically, as is done with other utilities.

Since 2009, Peco has received 6,105 solar-installation applications and approved 5,759, including 201 that required some modifications, Armstrong said. Only 6 percent were rejected, mostly because of system constraints.

Climate activists, solar-industry advocates, and customer demand are putting mounting pressure on Peco and other utilities to accelerate renewable-energy development.

Residential solar installations increased 16 percent this year, according to the Solar Energy Industries Association. SolarCity, the Tesla Motors subsidiary, says it is ramping up local operations and now employs 400 people in Pennsylvania.

Community groups in Center City and Northwest Philadelphia are enlisting homeowners to enroll in group-buying efforts similar to the Solarize Greater Media campaign. Protesters from the Earth Quaker Action Team targeted Peco's headquarters in 2016, demanding that the utility buy more solar power.

Installers and customers have urged legislators and the state Public Utility Commission to remove obstacles that add costs and delays for homeowners  installing solar systems. The PUC said it is reviewing the issues to see whether it should take action to improve the interconnection process.

"I don't want to downplay Peco's progress," said Micah Gold-Markel, head of Solar States LLC, the contractor employed to do the Solarize project in Media. "It used to be you would submit an application and you wouldn't hear back for months. They have cut that time now, but it's still longer than most utilities."

Peco's challenges tie into broader issues facing an industry historically designed to transmit power one-way, from central generation plants to customers. Increasingly, the grid is being asked to accommodate a scattered network of "distributed resources," such as renewable power, small cogeneration systems, and battery-storage equipment.

"If we're going to do a two-way system, with more generation on a particular feeder, then we have to think about new ways of managing the generation or new ways to protect and operate the distribution system," said Tom Key, senior technical executive with the Electric Power Research Institute, an industry nonprofit that is exploring the challenges.

While regional grid operators such as PJM Interconnection orchestrate the shifting power flows on major transmission lines, it falls to utilities such as Peco to manage local circuits, where power is fed from substations to a series of customers.

Most of the obstacles Peco has encountered with solar customers occur on the utility's 4,000-volt distribution circuits, an older design that can feed power to fewer customers over shorter distances than newer 13,000-volt circuits can. About a quarter of Peco's customers are served by the 4,000-volt lines, said Michael Pietrafitta, the utility's director of regional electric operations.

Solar customers, who sell their excess power back into the grid, are more likely to cause the circuit's voltage to exceed legal limits if they are located near a substation. Too much voltage creates havoc with some appliances and gets Peco in hot water with regulators.

Solutions can be as simple as replacing the wire connecting a house to the utility's system or downsizing the solar installation to produce less power. Other fixes involve replacing transformers or capacitors on the utility's system. Under a PUC rule, the utility charges the customer who benefits from the equipment.

"For some customers, Peco proposed a $20,000 solution, which was more than they were paying for the solar installation in the first place," said Sari Steuber, a leader in Transition Town Media, the community group that organized the solar effort. "It was hardly a cost-effective solution."

Some customers believe that Peco should upgrade its "antiquated" circuits to more readily accept solar systems.

The company says it can't justify expensive replacement of a system that still works well, according to industry reliability measures. "The current makeup of Peco's system meets the needs of our customers and does so at a level that is among the best in the country, in terms of reliability," said Armstrong.

Though Peco says it's doing all it can to accommodate solar customers, solar advocates say they believe it could do more if the utility's incentives were reconsidered.

Though less than 1 percent of Peco's customers have installed solar panels, each one represents a loss in utility revenue. Renewable-energy customers consume less power from the grid, and the utility is required to buy their excess production at retail prices. But solar customers still rely on the grid to deliver power when the sun isn't shining.

"There's this ethos inside of Peco that solar costs everybody more money, that solar people are sort of free-riding the grid," said Gold-Markel, the Solar States founder.

The PUC has launched a formal investigation into alternative rate mechanisms, including pricing structures that decouple utility profits from sales. A report is expected this year.