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U.S. Department of Energy Energy Efficiency and Renewable Energy

Permitting for Distributed Energy Resources

New distributed energy resources (DER) projects are subject to certain environmental siting and permitting requirements. Permitting includes the granting of permission by local and other authorities to site DER.

Environmental siting requirements typically relate to land-use regulations and air permitting. Besides air and water permits, customers installing DER often must comply with local code and zoning requirements. Occupational Safety and Health (OSHA) requirements may also need to be met. Larger DER projects may confront requirements set by the endangered species, wetlands, and historic preservation programs.

The following information is intended to help Federal agencies understand permitting for DER systems, including:

Potential Barriers

Environmental permitting (primarily obtaining an emissions permit) is probably the single most arduous and costly task in getting a DER system online. The most common permitting requirement is an air permit, which is applicable to fossil-fuel-fired DER technologies. An air permit is often required if the site is located within a non-attainment area. Apply for air permits from the local air resources control board as needed. Depending on the size, type, and potential impacts of your project, this can take up to six months for technologies having emissions. More information on air permitting and environmental siting is available in the FEMP Environmental Siting Guide.

In general, DER system installations are subject to the same permitting and evaluation process as other site or facility modifications. The National Electric Code; the National Life-Safety Code; and the International Fuel Gas, Plumbing, Mechanical, Building, and Fire Codes are the key references for local code officials. For the most part, these codes do not address some of the newer DER technologies, such as microturbines and fuel cells. And most code officials have little or no experience in permitting such installations. Therefore, code officials may require a number of design, test, and documentation reviews before approving a DER system.

Applicable Codes and Standards

Several codes and standards specifically address the installation of DER and combined heat and power (CHP) systems:

  • UL 2200 is a commonly cited reference for combustion engines and gas turbines in stationary power applications. It does not specifically refer to microturbines, but it can be considered to include that technology.
  • NFPA 853 provides for the design, construction, and installation of fuel-cell power plants with a capacity of more than 50 kilowatts (kW). Titled the Standard for the Installation of Fuel Cells, it covers natural gas and a number of other fuel sources.
  • NFPA 37 is the Standard for the Installation and Use of Stationary Combustion Engines and Gas Turbines. It works in conjunction with UL 2200 to apply to the installation and operation of CHP technologies. Like UL 2200, it can be extended to microturbines.
  • IEEE 1547 is the Standard for Distributed Resources Interconnected with Electric Power Systems. It addresses technical requirements for the safe interconnection of DER systems to the local electric distribution system.

In addition, many building code offices require their zoning board to grant a conditional use permit or a variance from the existing code before they will issue a building permit. Check with your building code office when considering any DER system to learn about their specific inspection requirements.

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Overcoming Barriers

The best way to avoid potential permitting barriers is to understand the requirements your system will need to face. Investigate the environmental siting and permitting requirements early on to avoid setbacks and additional expenses that may be incurred later in the project approval phase.

When it comes to building codes and inspections, you are most likely to gain the inspector's approval if you, or your installer, do the following:

  • Follow the National Electrical Code
  • Install pre-engineered, packaged systems
  • Properly brief the inspector on your installation
  • Include a complete set of plans as well as the diagrams that come with the system

In addition, be sure that your system is composed of certified equipment (e.g., U.L. certification) and that it complies with local requirements and appropriate technical standards.

For help in overcoming potential air permitting barriers, see the Environmental Siting Guide.

It is often possible to require your DER contractor to take care of all the necessary interconnection and permitting studies, paperwork, and fees as part of the project contract. Such integrated service providers (ISPs) can simplify the implementation of DER projects and bring needed expertise and experience in navigating the interconnection and permitting processes. The DG Monitor newsletter provided an overview of ISPs, including some examples of such companies located across the country. For more information, see the July/August 2002 and the March/April 2003 issues.

For more information on regulations, policies, and programs that affect DER systems, the Massachusetts Department of Energy Resources (DOER) developed a Renewable Energy and Distributed Generation Guidebook that is applicable to many states.

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Technology-Specific Permitting Information

Because permitting of DER systems can be highly dependent on the type and size of the system being considered, more technology-specific information is provided here.

Combined Heat and Power Systems

The Midwest CHP Applications Center developed the Illinois CHP/BCHP Environmental Permitting Guidebook. Although specific to Illinois, the document provides useful guidance for anyone facing interconnecting and permitting issues of CHP systems. Here are the volumes from that Guidebook:

  • Volume A, Roadmapping the Permitting Process, details the current permitting process for CHP systems and provides tools in the form of an emissions calculator and a step-by-step questionnaire to efficiently navigate the permitting process.
  • Volume B, Permitting Issues: A Survey and Dialogue, identifies permitting issues as well as potential opportunities to streamline the permitting process. It is based on a survey of 20 current CHP installations with feedback from CHP developers and the Illinois Environmental Protection Agency.

Renewable Energy DER Systems

Each state and community has its own set of codes and regulations that you will need to follow to add a renewable energy system. These regulations can affect the type of renewable energy system you are allowed to install and who installs it. These regulations can also affect whether you decide to connect your system to the electricity grid or use it in place of grid-supplied electricity as a standalone system.

For example:

  • Although local inspectors are often not required to follow the National Electrical Code (NEC), many local building code inspectors look to Article 690 of the NEC for guidance on equipment and wiring safety for small renewable energy system installations. Article 690 of the NEC specifically discusses photovoltaics systems, but much of the information is pertinent to small wind and microhydro systems as well. If you, your installer, or your inspectors want more information on Article 690, Sandia National Laboratory published a useful guide to installing NEC-compliant photovoltaics systems.

  • Some states permit easements, which are a voluntary, legally binding agreement between owners of adjacent land regarding use of the land. For example, you might seek an easement specifying that no structure will be built that blocks the renewable resource necessary to run a renewable energy system. These agreements are binding regardless of changing land ownership. In addition, you may want to do a title search of your deed to determine if any prior easements or other agreements exist that could prevent you from adding a renewable energy system to your own property.

  • Some communities have covenants or other regulations specifying what homeowners can and can't do with their property. Sometimes these regulations prohibit the use of renewable energy systems for aesthetic or noise-control reasons. However, sometimes these regulations have provisions supporting renewable energy systems. Check with your homeowners association or local government for details. In addition, you may want to discuss your intentions with your neighbors to avoid any future public objections.

A local renewable energy company or organization, your state energy office, or your local officials should be able to tell you about requirements that apply in your community. If you want to connect your system to the electricity grid, these groups may also be able to help navigate your power provider's grid-connection requirements.

For more information on permitting of specific types of renewable energy DER systems, follow these links:

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