Does Installing Your Own Renewable Energy System Make Sense?

Posted: October 18, 2016

It’s very important to first check with AVEC to be sure whatever system you want to install will be allowed to be connected to the utility system (grid).

With the high cost of fuel and energy in rural Alaska there are often vendors that want to sell renewable energy “solutions” to co-op members with the promise of quick pay back or huge savings. Here are some quick tips to help you figure out if installing your own renewable energy system is right for you.

First, and this really is important: Check with AVEC (or your utility) to be sure whatever system you are considering will be allowed to be connected to the utility system (grid).

Unless you are off-grid or the system you want to install will not be interconnected with the electrical system connected to the utility, the system will have to be approved by the utility.

In order to maintain power quality, AVEC has specific limits to the amount of non-utility generation that can be connected to the grid. If that limit has already been reached in your community, no further connections will be allowed.

There are also standard codes and specifications that must be followed. Most qualified installers are familiar with meeting these requirements, but in addition to national codes, they need to meet AVEC specifications.

Second, understand what you are truly paying for electricity. Electrical rates vary depending on what fuel costs in your community, how much power is used and whether your power use is eligible for Power Cost Equalization. PCE is a program financed by the State to assist with the high cost of rural energy for residential and community facilities. Find out what you truly pay for power to help calculate how long it will take to pay back the cost of the system through energy savings.

Third, find out from the utility what the buy-back rate for power is in your community. For approved systems, AVEC pays for power returned to the grid from non-utility generators at a rate called the non-firm power rate. This buy-back rate is not the same as the cost for the member to purchase utility power. The buy-back rate for each community is based on what it would cost in fuel to produce the equivalent power at the power plant.

Other utility costs like administration, construction and maintenance of facilities, and debt service that are part of utility rates are not paid back to the non-utility generator. This information should influence how big a system you install and again how long it will take to pay back.

Lastly, understand this is a commitment, connecting generators into the grid comes with the responsibility for maintaining the system in good condition and in compliance with codes and specifications. All non-utility generators are required to sign a Parallel Operating Agreement that states they will maintain their systems and that they understand that the utility will disconnect their system if it poses any hazards or creates power quality issues on the grid.

If you are considering a solar photo-voltaic system, the article on pages 28 and 29 has a list of questions to help you fully understand what a vendor is selling. AVEC’s website has links to other websites that provide lots of great information on solar energy (

Also, if you want a rough estimate of what you can expect for solar output at your location, visit This simple website by the National Renewable Energy Lab (NREL) allows you to input your location, choose a nearby weather station from their database and provide basic information about your proposed solar array. It produces a quick report of the estimated amount of energy you can expect to get each month from your system.

If having your own renewable energy system still makes sense for you, contact AVEC’s Operations Department for an application to learn more about the requirements and start the process of gaining approval for connection.

Don’t start spending money, only to find out later that the system will not be approved, or find out the savings are not what you had hoped.