CONTRACTUAL ISSUES FOR GRID-CONNECTED SYSTEMS When connecting your small renewable energy system to the grid, you will probably need to sign an interconnection agreement with your power provider. In your agreement, power providers may require you to do the following: Carry liability insurance -- Liability insurance protects the power provider in the event of accidents resulting from the operation of your system. Most homeowners carry at least $100,000 of liability through their homeowner insurance policies (although you should verify that your policy will cover your system), which is often sufficient. Be aware, however, that your power provider may require that you carry more. Some power providers may also require you to indemnify them for any potential damage, loss, or injury caused by your system, which can sometimes be prohibitively expensive. Pay fees and other charges -- You may be asked to pay permitting fees, engineering/inspection fees, metering charges (if a second meter is installed), and stand-by charges (to defray the power provider's cost of maintaining your system as a backup power supply). Identify these costs early so you can factor them into the cost of your system, and don't be afraid to question any that seem inappropriate. In addition to insurance and fees, you may find that your power provider requires a great deal of paperwork before you can move ahead with your system. However, power providers in several states are now moving to streamline the contracting process by simplifying agreements, establishing time limits for processing paper work, and appointing representatives to handle grid-connection inquiries.
