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Why Strong Solar Projects Fail: A Developer’s Guide to Interconnection Risk

Written by Pure Power Engineering | Oct 17, 2026, 12:52:30 PM

As a developer, you will look at solar or storage projects with excellent economics, presenting a strong investment opportunity. Yet such projects can still fail for one reason: interconnection. That’s exactly why Pure Power Engineering brought interconnection services in-house, to help developers work through this problem before it costs them a good project. 

We have witnessed developers treat interconnection as a utility process that begins after site control is secured and designs have started taking shape. But interconnection needs to be factored in the moment a project enters the pipeline, exactly because of its unpredictable nature. It needs to be perceived as a parallel workstream that influences investment decisions from day one. 

As distributed generation continues to grow and utilities face increasing levels of solar and battery storage penetration, interconnection becomes one of the most specialized disciplines in project development. Developers who understand this will move projects forward faster, deploy capital more efficiently, and avoid unpleasant surprises. 

Interconnection Is a Development Activity

Asking developers what determines whether a project succeeds, we often hear: site control, permitting, financing, or power prices. All are important. However, before a project generates a single kilowatt-hour, it needs permission to connect to the grid. That process can be a bit of a journey. It involves ongoing interaction with the utility, technical reviews, engineering analyses, filings, studies, and ultimately an interconnection agreement. 

While developers negotiate leases, refine layouts, and evaluate project economics, the utility is evaluating how the project will affect existing infrastructure. Studies will reveal information about available capacity, potential system impacts, and the infrastructure upgrades that may be required to accommodate the project. 

Uncertainty Fuels Project Risk

For many developers, capital is the most limited resource. A typical development pipeline may contain dozens of prospect sites, only a fraction of which will ever become operating assets. Every dollar spent on a project that ultimately proves non-viable comes directly out of the budget. 

Early interconnection intelligence becomes extremely valuable, when you ask yourself the question: “What will it cost to connect this project to the grid?”

Unfortunately, the utility's official answer may not arrive for months. In many jurisdictions, developers have to wait through application reviews, feasibility studies, impact studies, and facilities studies before receiving a clear picture of costs. By the time those numbers materialize, considerable investments in both time and money will have been made.

Interconnection Determines Project Economics

Two solar projects may have similar site characteristics. Yet one project may connect to the grid with minimal infrastructure upgrades, while the other could require extensive feeder improvements, substation modifications, or other utility investments. The difference can dramatically impact project economics. A project may look excellent on paper until the interconnection study reveals:

•    $500,000 in upgrades
•    $5 million in upgrades
•    a substation expansion requirement
•    a feeder rebuild

Investigating existing capacities or estimating potential upgrade costs early in the process helps developers make informed decisions. It enables them to determine which sites deserve continued investment, and which projects should be removed from the pipeline before additional resources are committed. In most cases, interconnection is not a technical consideration; it is a business decision that affects ROI.

Hosting Capacity Doesn't Tell the Whole Story

We often see developers relying heavily on hosting capacity maps and utility pre-application reports. These tools are valuable, no question, but they are only the starting point.

A hosting capacity map shows that a circuit can accommodate one additional megawatt of generation. At first glance, that might appear to limit project size. However, experienced interconnection engineers understand that hosting capacity is not always a fixed number. Depending on the existing infrastructure, available substation capacity, and potential system upgrades, significantly more capacity may be achievable. 

Moving from "How much capacity exists today?" to "How much capacity can be created economically?" signifies the true challenge. The distinction can dramatically change project economics and development strategy. It is often the difference between abandoning a site and unlocking a viable opportunity.

Why Projects Get Stuck in the Queue

We also hear from developers that they face delays because utilities are overwhelmed. Sometimes that's true. More often, though, delays begin with incomplete or inaccurate submissions. Applications may be returned because equipment information is missing, inverter documentation is insufficient, site plans lack required detail, or utility-specific requirements are not adequately addressed. Each revision can create additional review cycles and extend timelines. 

We truly believe in the concept of "doing it right the first time". Utilities can only review the information they receive. Complete, accurate packages give reviewers what they need upfront and reduce the likelihood of resubmittals, clarification requests, and queue disruptions. For developers, every avoided revision represents time saved and uncertainty removed.

The Queue Matters More Than You Might Think

Interconnection timelines are often governed by published tariffs. But the timeline written on paper and the timeline experienced in practice are not always the same thing.  A project's schedule can be affected by projects ahead of it in the queue. In some territories, studies are performed sequentially. In others, utilities use concurrent or cluster-based approaches. Some jurisdictions rely heavily on group studies that move projects forward in batches. 

The result is that timelines can shift based on the actions of other developers entirely unrelated to your project. A project may be technically sound and financially attractive, yet still experience delays because of queue dynamics, study dependencies, or utility resource constraints. Understanding these realities allows developers to plan more accurately and manage expectations with investors, EPCs, and project stakeholders. Consulting with an experienced interconnection specialist goes a long way.

 

Why Interconnection Is Getting More Complex

As more distributed solar and battery storage projects connect to the grid, utilities have to evaluate increasingly complex interactions between generation assets and grid operations. Advanced protection mechanisms, grounding requirements, control systems, inverter functionality reviews, and system impact analyses are becoming more common. 

Utilities are also relying more heavily on specialized modeling platforms such as PSCAD® and PSS®E to evaluate project behavior under various operating conditions. What was once reserved for larger projects is beginning to appear more frequently in distributed generation environments, particularly in regions with high levels of renewable penetration. 

A useful way to think about this trend is through the concept of entropy. As distributed generation expands, the electrical system naturally becomes more interconnected, more dynamic, and more complex. Every new resource creates additional interactions that utilities must understand and manage. For developers, that means expertise matters more than ever.

 

How Pure Power Supports Interconnection Success

Successful interconnection requires a combination of technical expertise, utility coordination, and strategic project planning. Pure Power helps developers navigate the process from early-stage evaluation through final utility approval.

Our interconnection services include:
•    Utility process overview
•    Hosting-capacity and constraint evaluations
•    Preliminary upgrade-cost assessments
•    Interconnection application preparation and submission
•    Utility coordination and response management
•    PSCAD® and PSS®E modeling support
•    Protection and controls engineering
•    Utility-required technical documentation
•    Ongoing support through design, construction, and commissioning

By combining over a decade of utility-facing expertise with development-focused engineering, Pure Power helps clients reduce risk, improve schedule certainty, and make better-informed investment decisions throughout the project lifecycle.

For more information on our interconnection engineering services please visit: https://www.purepower.com/interconnection-services or email info@PurePower.com.