Each main electrical panel has a maximum solar capacity. To exceed this capacity, the panel usually needs to be upgraded to a higher rating. however, in some cases, a derate can help avoid the expense of a main panel upgrade.
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What Is a Derate?
Each main electrical panel has an amperage rating, and most homes have either a 100A, 150A, 200A, 225A, or 400A service. This amperage rating is an indicator of how many appliances or electrical units you can run in your home at one time.
When installing solar, some electrical panels will not have enough amp space for a system, and the panel needs to be upgraded to be able to handle the excess load from the system.
Here's an analogy:
Imagine you've got a smartphone with 64GB of storage, and you've used 62GB of that storage. Now, imagine that you'd like to download an app that will use 4GB of storage.
The smartphone won't allow you to download the app--however, if you upgrade your phone to a 128GB smartphone, you won't have any problems. Like a main panel upgrade, a new smartphone can be expensive.
A simpler (and less expensive) solution to our smartphone problem would be to delete some unneeded photos/videos/apps/etc. until you've got enough space to add the app. This is the smartphone equivalent of a main breaker derate.
Sometimes, it's possible to avoid a main panel upgrade by reducing the power rating of (derating) the main breaker.
Examples: The 120% Rule
To fully and accurately explain a derate, we first need to outline the 120% rule. The 2011 NEC (National Electric Code) clearly illustrates this rule:
“Bus or Conductor Rating. The sum of the ampere ratings of overcurrent devices in circuits supplying
power to a busbar or conductor shall not exceed 120% of the rating of the busbar or conductor.”
To simplify, the amperage rating of power supplied to the main panel must not exceed 120% of the service's rating. This unaffiliated video explains it well:
For example, if you have a 125A electrical service, the total amperage feeding the panel must not be higher than 120% of that: 120% of 125A = 150A.
This means that a 125A service with a 125A breaker only has 25A left for a solar system--but what if your solar system is larger than that? Say, 50A?
125A main breaker + 50A solar breaker = 175A. 175A is 140% of the service rating (125A), so this isn't possible.
This is where a derate comes in. To fit the 50A solar breaker, we can sometimes reduce the power rating of the main breaker.
If we reduce the size of the main breaker to 100A, then we have 50A available to add solar. 100A main breaker + 50A solar breaker = 150A
This 150A follows the 120% rule, and a main panel upgrade has been avoided!
The Bottom Line
It's important to remember that a main breaker derate cannot always prevent a main panel upgrade, especially if your main panel is no longer up to current code requirements. Also, derating your main breaker for solar cannot be undone without a full main panel upgrade.
However, in some cases, a derate can help avoid the excess cost and added time of a main panel upgrade to bring you quicker solar savings.
The base cost for this service through Project Solar is $650.