Small scale generating technologies (e.g. solar, wind, CHP, hydro or newer technologies) that are connected to the electric power grid are identified as distributed generation (DG). DG systems allow customers to produce some or all of the electricity they need. The electricity a customer uses (e.g. for HVAC, consumer electronics, lights) is their electric load. By generating a portion or all of the electricity a customer uses, the customer can effectively reduce their electric load.
In general, DG systems produce power for the buildings which the systems are connected to (e.g. solar panels on a home or business). Renewable DG systems are able to provide power with minimal impact on the environment. However, most renewable DG systems only produce power when their energy source, such as wind or sunlight, is available. Due to the intermittency of the power supply from DG systems, there may be times when the customer needs to receive electricity from the utility company’s electric grid. When a DG system produces more power than the customer’s load, excess power is sent back to the utility company’s electric grid. This reduces the overall load that the utility company needs to supply.
DG systems allow customers to be powered by their own electric generation systems, rather than by traditional central power plants (e.g. coal and nuclear). Also, customers are able to be compensated for reducing the load on the grid through the net metering program or by contract.
When installing DG systems, customers are required to work with their local utility company. To benefit from DG systems, customers must comply with the Interconnection Tariff and follow the Interconnection Process. The Interconnection Tariff details the regulations, conditions, and time frames associated with the Interconnection Process, which ensures that the newly connected DG systems will have no adverse impacts on safety, reliability, and power quality of the utility’s electric grid.