About distributed generation systems

Posted on Mar 09 2024 in LaGrange County REMC
Mark Leu

As Americans, we place a high value on our independence. One increasingly popular way to establish that independence has been installing an on-site generation source at your home that gives you a greater measure of control over your electricity supply. As an increasing number of consumers install grid-connected distributed generation (DG) systems, like solar panels or small wind turbines, LaGrange County REMC is prepared to assist our members while still maintaining the safety of the grid.

Grid-connected generation systems can allow you to power your home or business with renewable energy, but the system must be connected to the grid to keep power flowing when the sun does not shine or the wind does not blow. In most cases, these systems must be interconnected to feed excess power back into the electric grid.

LaGrange County REMC currently has a mix of 20 different residential and commercial members with grid-tied DG systems that have varying levels of generation. Obviously, in the summer months they generate far higher percentages than in the winter due to the amount of daylight. If they generate enough to create a credit on the overall bill, then that credit will carry over to the next billing cycle. It’s also important to note that during solar production, their homes are using some of that production for operation of the home’s systems. In 2023, the DGs interconnected to our system received credit for supplying almost 300,000 kWh of excess generation.

With more than 3 million Americans having already made the switch to solar power at home, this surge of interest in solar power has led to a lot of misleading advertising and even some outright scams from companies selling solar installations.

Installation costs will vary drastically depending on the design. A simple 5 kW grid-tied array could range from $15,000 to $25,000. Add batteries and an automatic transfer switch and you can easily double the amount. Add a hybrid inverter and a critical load panel and you could increase the amount by another $5,000–$10,000. So, a 5-kW system could range from $15,000 to $60,000, depending on a wide variety of factors.

The average payback period for our members is around 14 years, but, remember, there are numerous factors that play into that formula.

Co-op members who are interested in distributed generation systems for their home or business should contact LaGrange County REMC first. We want to help you choose a system that includes the safety and power quality components necessary to keep you, co-op crews and members of the community safe. If a storm hits and a power outage occurs, for example, distributed generation systems must be able to properly disconnect from the electric grid to ensure lineworkers are not injured or electrocuted while restoring power. Additionally, an interconnection agreement must be in place before your distributed generation system is interconnected to the electric grid.

The way we generate and use electricity is evolving. Let’s work together to ensure a safe, reliable electric system. LaGrange County REMC is here to help. If you have questions about grid-connected generation systems, please contact us at 877-463-7165.