The Federal Energy Regulatory Commission today handed the solar industry a potential victory after proposing to ease roadblocks that small solar generators face when trying to connect to the electric grid.

The agency's action responds directly to a petition that the Solar Energy Industries Association (SEIA) submitted to FERC last year proposing to change FERC policies that have limited the amount of solar power that can be added to homes in booming regions like California, Hawaii and New Jersey (Greenwire, Feb. 16, 2012).

FERC voted 3-2 to approve the reforms, receiving backing from FERC Commissioners Cheryl LaFleur (D), Philip Moeller (R) and John Norris (D). FERC Commissioner Tony Clark (R) recused himself due to a requirement that he sit out for about a year on cases the National Association of Regulatory Utility Commissioners may have handled, because he was a former president of that organization.

FERC Chairman Jon Wellinghoff also recused himself because he served as the general counsel for a Nevada utility in the past -- formerly PowerLight Corp. -- that developed solar projects. "I just think it's appropriate to step out of those cases where I have former clients," Wellinghoff told reporters today.

Sunny states have seen solar panels bloom on rooftops at a record pace, bolstered by falling prices and generous subsidies. Grid operators, in response, have capped the amount of rooftop solar installations.

SEIA had argued that policies FERC laid out in 2005 -- and states adopted -- had become discriminatory and asked the commission to allow small solar generators to quickly connect to the grid if they met certain criteria, or passed "screen tests."

FERC's proposed reforms fall in line with much of what SEIA was seeking, including language that would allow generators to ask transmission providers for a study to help them better determine points where they can interconnect to the grid. The generators, however, would be required to pay for the studies, which can cost around $300.

"This added transparency could increase the efficiency of the interconnection process for both transmission providers and interconnection customers," FERC said.

But the commission didn't grant all of SEIA's wishes. The industry group had asked the commission to allow projects up to 10 megawatts to use a "fast track" process to connect to the grid, which involves the generators passing a number of tests. Instead, the commission is proposing a formula that allows projects no larger than 5 MW to use the speedy process.

Still, Rhone Resch, president and CEO of SEIA, said in a statement that FERC's proposed rule could potentially double the amount of solar generation capacity in the fast track lane, even while ensuring the grid is reliable. "On behalf of our member companies, we look forward to working with FERC and interested stakeholders to see this rule to implementation and help to bring more affordable, reliable solar energy to the American people. SEIA also urges the states to consider using FERC's proposed updated rule as a model and starting point for updating their own interconnection rules," Resch said.

Comments are due 120 days after the proposals are published in the Federal Register.

Moeller thanked SEIA for raising the issue, and Norris said adding more renewables to a strapped grid "is a big deal, in my mind."

"This just makes sense to me, and I'm glad we're making these incremental improvements to our rules to accommodate changes in the system," Norris said. "This is moving our country forward in the right direction."

LaFleur said FERC is responsible for making sure that existing policies change with the markets and that costs are spread fairly. The proposed rule changes, she said, will protect solar generators while respecting grid reliability, noting that solar installations have grown by more than 40 percent during the past decade.