Why is interconnection the biggest bottleneck in U.S. solar?
U.S. interconnection queues remain the largest schedule risk in solar development. Queue position, upgrade costs, and cluster-study rules decide whether a project reaches COD.
Connecting a project to the U.S. grid has become the single biggest schedule risk in solar development—often determining whether a late-stage project reaches financial close at all.
Why are U.S. interconnection queues still congested?
Queues remain congested because far more generation and storage has sought grid access than the study process can clear. Lawrence Berkeley National Laboratory's Queued Up series documents multi-terawatt queues and high withdrawal rates: most requests never reach commercial operation, and those that do spend years in study. The backlog has eased from its peak as reforms and withdrawals removed speculative capacity, but solar and storage still dominate the queue, and the fundamental problems remain:
- Multi-year timelines to complete studies and reach agreements
- Uncertain upgrade costs that can render a project uneconomic
- High attrition as speculative projects drop out and reshuffle the queue
FERC Order 2023 replaced serial first-come, first-served studies with first-ready, first-served cluster studies, plus stricter financial-readiness and site-control requirements intended to discourage speculative requests. Several ISOs paused new requests during the transition, and new cluster windows are only now reopening.
What should developers assess in interconnection diligence?
The key variables developers must assess early:
- Queue position and the status of system-impact and facilities studies
- Network upgrade costs and how they are allocated
- Grid capacity in the target substation and region
- Reform timelines as operators implement Order 2023's cluster-study rules
Interconnection diligence is a core part of our project underwriting process—we will not commit capital without a clear view of timeline and upgrade exposure.
How do developers de-risk interconnection?
Experienced developers de-risk interconnection by:
- Securing strong queue positions early
- Modeling conservative upgrade-cost scenarios
- Maintaining optionality across multiple points of interconnection
- Engaging with grid operators and reform proceedings
For utility-scale solar and solar-plus-storage projects, interconnection outcomes directly shape project economics. The stakes have risen further under the federal tax credit phase-out: a project that misses the beginning-of-construction window must be placed in service by the end of 2027 to remain credit-eligible, making interconnection timing a direct determinant of tax-credit value—not just schedule.
How Sunlight helps
We advance late-stage and shovel-ready projects through permitting, interconnection, and construction with experienced vendors, and we underwrite interconnection risk carefully before committing capital.
Developers navigating the queue can explore our development support or contact our team.
