Solar Interconnection Backlog Crisis 2025: Grid Constraints Delaying Projects Nationwide

The interconnection backlog has become one of the most pressing challenges facing the U.S. solar industry. With over 2,600 gigawatts of proposed generation and storage capacity queuing for grid connection — more than double the nation's entire installed power plant fleet — the interconnection process has become a bottleneck that delays projects, increases costs, and threatens the pace of the energy transition. In 2025, the implementation of FERC Order 2023 began to show results, but the scale of the challenge remains immense.

For solar installers and electrical contractors, understanding the interconnection landscape is essential for project planning and client communication. At PES Supply, we provide the components you need to keep projects moving once interconnection approval is secured. With 50,000+ SKUs from 169 authorized brands and delivery in 7-10 business days, we help you stay on schedule.

The Scale of the Backlog: 2,600 GW and Counting

According to Lawrence Berkeley National Laboratory's (LBNL) flagship "Queued Up" report, the backlog of proposed power plants seeking grid connection was larger than ever. At the end of 2023, active grid connection requests totaled 2,600 GW — more than double the total installed capacity of the U.S. power plant fleet (1,280 GW). Solar, battery storage, and wind energy accounted for 95% of all active capacity in the queues ([LBNL](https://emp.lbl.gov/news/grid-connection-barriers-new-build-power-plants-united-states)).

The data set compiled by LBNL covered interconnection queues from all seven organized electricity markets in the U.S. plus 44 additional utilities outside those regions. In total, it consisted of 11,597 projects representing 2.6 terawatts of generation and storage actively seeking grid interconnection, plus 17,873 projects that had entered the queues but were withdrawn, and 4,155 projects that had moved through the queues and reached commercial operations ([LBNL](https://emp.lbl.gov/news/grid-connection-barriers-new-build-power-plants-united-states)).

Key Interconnection Queue Statistics

Metric	Value	Source
Total active capacity in queues	2,600 GW (2.6 TW)	LBNL Queued Up (end of 2023 data)
U.S. installed power plant fleet	1,280 GW	LBNL
Solar + storage + wind share	95% of active capacity	LBNL
Solar in queues	1,000+ GW	LBNL/Utility Dive
Battery storage in queues	1,000+ GW	LBNL/Utility Dive
Typical wait time (project built 2023)	~5 years	LBNL
Withdrawal rate	~80%	LBNL
Completion rate (since 2000)	<20%	LBNL/Canary Media

More than 1.2 TW of capacity had joined interconnection queues since the passage of the Inflation Reduction Act in 2022, including approximately 540 GW of storage, 500 GW of solar, and 125 GW of wind. The sheer volume overwhelmed a system originally designed for a much smaller number of projects ([Utility Dive](https://www.utilitydive.com/news/grid-interconnection-queue-berkeley-lab-lbnl/712926/)).

FERC Order 2023: The Reform Framework

On July 28, 2023, the Federal Energy Regulatory Commission issued Order No. 2023, a comprehensive reform of the interconnection process. The rule became effective on November 6, 2023, with transmission providers required to submit compliance filings by April 3, 2024 (extended from the original December 2023 deadline). FERC subsequently issued Order No. 2023-A in March 2024, making modifications and clarifications to the original rule ([FERC](https://www.ferc.gov/explainer-interconnection-final-rule), [FERC](https://www.ferc.gov/explainer-interconnection-final-rule-2023-A)).

Three Pillars of Order 2023

The final rule adopted reforms in three general categories ([FERC](https://www.ferc.gov/news-events/news/fact-sheet-improvements-generator-interconnection-procedures-and-agreements)):

• First-ready, first-served cluster study process: Transmission providers conduct larger interconnection studies encompassing numerous proposed generating facilities, rather than separate studies for each individual project. This approach increases efficiency, minimizes delays, and improves cost allocation by analyzing the transmission system impacts of multiple projects at once.
• Increased speed of queue processing: The rule eliminates the "reasonable efforts" standard for completing interconnection studies, adopts study delay penalties when transmission providers fail to complete studies by tariff deadlines, and establishes a more detailed affected system study process with uniform modeling standards.
• Technological advancements: The rule requires transmission providers to allow multiple generating facilities to co-locate on a shared site behind a single point of interconnection, and allows customers to add generating facilities to existing requests without automatic material modifications.

To ensure that ready projects can proceed through the queue in a timely manner, interconnection customers are subject to specific requirements including financial deposits and site control conditions to enter and remain in the interconnection queue.

Cluster Study Process Explained

The cluster study process replaced the previous serial "first-come, first-served" approach. Under the new framework ([FERC](https://www.ferc.gov/explainer-interconnection-final-rule-2023-A)):

1. Cluster Request Window: A specific period during which interconnection customers submit interconnection requests. Only validated requests proceed to the study phase.
2. Cure Period: Customers can address deficiencies in their requests within the cluster request window. Minor technical data errors may be fixed without the request being deemed deficient.
3. Commercial Readiness Deposits: Financial deposits (cash, irrevocable letters of credit, surety bonds, or other acceptable forms) required to enter and remain in the queue.
4. Cluster Study: Transmission providers study the combined impact of all validated projects in a cluster, analyzing transmission system impacts simultaneously.
5. Cost Allocation: Network upgrade costs are allocated among projects in the cluster based on their impact on the transmission system.

ISO/RTO Implementation Progress in 2025

By 2025, the major ISOs and RTOs were at various stages of implementing Order 2023 compliance. The results were mixed, with some regions making significant progress while others continued to struggle with massive backlogs.

PJM Interconnection

PJM, which operates the largest competitive wholesale electricity market in the world, had been at the forefront of interconnection reform. The grid operator had implemented its "first-ready, first-served" method with milestones and progress payments to weed out speculative projects. By 2025, PJM reported significant progress ([PJM Inside Lines](https://insidelines.pjm.com/pjm-chooses-51-generation-resource-projects-to-address-near-term-electricity-demand-growth/)):

• Approximately 50,000 MW of projects had cleared the PJM study process and were clear to build
• Between 2024 and 2026, PJM expected to process approximately 170,000 MW of generation projects, mostly renewables and storage
• The transition period had produced 18,000 MW of projects with signed interconnection agreements through PJM's "Fast Lane" for projects with lesser system impact
• Approximately 47,000 MW of projects had completed PJM's interconnection process and were free to move to construction
• PJM had reduced its interconnection backlog by 60% through additional automation and increased staffing
• Planners and transmission owners had studied about 1,200 projects since interconnection process reform was implemented in July 2023

PJM's new "Cycle process" for projects seeking to interconnect was scheduled to begin in spring 2026, with a process time of one to two years. The grid operator also launched a multiyear collaboration with Google and Tapestry to deploy AI-enhanced tools to further streamline the planning process ([PJM Inside Lines](https://insidelines.pjm.com/2025-long-term-load-forecast-report-predicts-significant-increase-in-electricity-demand/)).

In May 2025, PJM selected 51 generation resource projects through its Reliability Resource Initiative, providing more than 9,300 MW of reliable capacity. FERC accepted PJM's proposed Expedited Interconnection Track in June 2026, a temporary standalone process to quickly advance projects of significant reliability value ([PJM Inside Lines](https://insidelines.pjm.com/pjm-chooses-51-generation-resource-projects-to-address-near-term-electricity-demand-growth/)).

ISO New England

ISO-NE reported the most dramatic improvement. According to a Day Pitney memorandum summarizing FERC's June 2026 show cause orders, ISO-NE had completed Order No. 2023 interconnection compliance, leaving the queue "essentially with no backlog." This represented a remarkable turnaround for a region that had previously faced significant interconnection delays ([ISO-NE/Day Pitney memorandum](https://www.iso-ne.com/static-assets/documents/100037/nepool_counsel_memo_ra_informational_reports_summary.pdf)).

ISO-NE was also pursuing two large-load-specific reforms: a "bring your own new generation" (BYONG) requirement and the exclusion of new large loads from the capacity market's Installed Capacity Requirement, with detailed rules anticipated in 2027.

MISO (Midcontinent Independent System Operator)

MISO filed its Expedited Resource Addition Study (ERAS) in June 2025, which FERC accepted on July 21, 2025. ERAS was a one-time accelerated interconnection study designed to address urgent near-term resource adequacy needs — MISO had cited a potential 4.7 GW shortfall by 2028. By mid-2026, 40 projects representing 19 GW had completed the ERAS process ([ISO-NE/Day Pitley memorandum](https://www.iso-ne.com/static-assets/documents/100037/nepool_counsel_memo_ra_informational_reports_summary.pdf)).

MISO was also developing a Zero Injection Generator Interconnection Agreement (ZGIA) — a new interconnection service and study process to facilitate faster interconnection of generation that serves only load at the same substation and will not inject onto the broader transmission system.

NYISO (New York Independent System Operator)

NYISO adopted the Cluster Study Process under Order No. 2023 and reported meaningful progress. The cluster process had shortened interconnection timelines, with 89 completed projects representing over 11 GW awaiting commercial operation. The near-complete Transition Cluster had 91 projects representing over 15 GW. The next Cluster Study application window was scheduled to begin July 31, 2026 ([ISO-NE/Day Pitley memorandum](https://www.iso-ne.com/static-assets/documents/100037/nepool_counsel_memo_ra_informational_reports_summary.pdf)).

CAISO (California Independent System Operator)

CAISO continued processing interconnection requests through its cluster system. The grid operator published its Cluster 15 Queue Report in December 2025, with Cluster 14 and prior interconnection information available through its reporting portal. CAISO was also developing transmission planning processes to address the growing demand from data centers and electrification ([CAISO](https://www.caiso.com/generation-transmission/generation/generator-interconnection)).

Implementation Progress Summary

ISO/RTO	Key 2025 Development	Status
PJM	Backlog reduced 60%; 47 GW cleared to build	Transition period nearly complete; new Cycle process begins spring 2026
ISO-NE	Order 2023 compliance complete	Queue "essentially with no backlog"
MISO	ERAS filed June 2025, accepted July 2025	40 projects / 19 GW completed ERAS
NYISO	Cluster Study Process adopted	89 projects / 11 GW completed; Transition Cluster has 91 projects / 15 GW
CAISO	Cluster 15 Queue Report published Dec 2025	Ongoing cluster processing

Cost Allocation Changes and Their Impact

One of the most contentious aspects of interconnection reform is cost allocation for network upgrades. Under the cluster study process, network upgrade costs are allocated among projects in a cluster based on their transmission system impact. This represents a significant shift from the previous approach where costs were often assigned to individual projects.

For distributed solar developers, cost allocation changes have had mixed effects. On one hand, the cluster approach can spread costs across multiple projects, potentially reducing the per-project burden. On the other hand, the uncertainty of cost allocation within a cluster — where a project's final cost share depends on which other projects proceed — creates financial planning challenges.

FERC's Order 2023 also established study delay penalties, creating financial consequences for transmission providers that fail to complete studies on time. However, transmission providers retain the ability to appeal penalties at the Commission ([FERC](https://www.ferc.gov/news-events/news/fact-sheet-improvements-generator-interconnection-procedures-and-agreements)).

Impact on Distributed and Community Solar

The interconnection backlog has disproportionately affected distributed solar projects, including community solar and small commercial installations. These projects often lack the financial resources of utility-scale developers to weather extended delays, and the carrying costs of waiting in queue can erode project economics.

Key impacts on distributed solar include:

• Extended timelines: The typical 5-year wait from interconnection request to commercial operation makes project financing more difficult and expensive
• Uncertain costs: Network upgrade cost allocations within clusters can change as projects withdraw, creating financial uncertainty
• Speculative crowding: Developers submitting multiple applications to hedge their bets inflate queue sizes and slow processing for genuine projects
• Withdrawal cascades: When projects withdraw from a cluster, remaining projects may face revised cost allocations and restudy requirements

FERC's Order 2023 reforms — particularly the commercial readiness deposits and site control requirements — were designed to weed out speculative projects. The high withdrawal rate of approximately 80% suggests that the queues are indeed heavily over-subscribed with projects that may never be built ([LBNL](https://emp.lbl.gov/news/grid-connection-barriers-new-build-power-plants-united-states), [Canary Media](https://www.canarymedia.com/articles/transmission/lots-of-demand-too-little-grid-the-us-power-sector-in-2024)).

The Data Center Challenge

A new factor complicating the interconnection landscape in 2025 was the surge in data center load growth, driven by artificial intelligence and cloud computing. In June 2026, FERC issued show cause orders to all six RTOs/ISOs, directing each to file informational reports describing proposals to ensure resource adequacy for new large loads and increase the pace of adding generating capacity ([ISO-NE/Day Pitley memorandum](https://www.iso-ne.com/static-assets/documents/100037/nepool_counsel_memo_ra_informational_reports_summary.pdf)).

PJM, which serves the Northern Virginia data center corridor, was particularly affected. The grid operator developed a "Connect and Manage" framework allowing large new loads to connect while operating flexibly during capacity shortages, and proposed a Reliability Backstop Procurement to fill expected capacity shortfalls. PJM also created a Large Load Registry to improve load forecast accuracy and transparency.

For solar developers, the competition for interconnection capacity from data centers added another layer of complexity to an already constrained system. The growing demand from data centers also created opportunities, as many data center operators and utilities turned to solar-plus-storage projects to meet their growing electricity needs.

Strategies for Navigating the Backlog

For solar installers and developers facing interconnection delays, several strategies can help mitigate the impact:

• Surplus Interconnection Service: PJM obtained FERC approval to streamline the use of unused interconnection service for facilities that cannot or do not operate continuously — such as adding battery storage to a renewable site
• Capacity Interconnection Rights Transfer: Reforms to facilitate expedited interconnection for replacement resources using the capacity rights of retiring generators
• Co-location: Order 2023 allows multiple generating facilities to share a single interconnection request behind a single point of interconnection
• Fast Track processes: PJM's Fast Lane and similar expedited processes for projects with lesser system impact
• Early engagement: Engaging with transmission owners and planning staff early in the project development process

What This Means for Contractors

For electrical contractors and solar installers, the interconnection backlog means:

• Longer project pipelines: Plan for extended timelines between contract signing and installation
• Cost contingencies: Budget for potential network upgrade cost allocations that may not be finalized until cluster studies are complete
• Client communication: Set realistic expectations about project timelines, particularly for utility-scale and larger commercial projects
• Storage opportunity: Battery storage additions to existing solar sites can leverage surplus interconnection service without requiring new queue positions
• Component readiness: When interconnection approval comes through, having materials ready to deploy quickly is essential for meeting construction deadlines

PES Supply can help you be ready when your projects get the green light. Explore our solar modules, inverters, battery storage solutions, balance-of-system components, and electrical panels and breakers. With 50,000+ SKUs from 169 authorized brands and delivery in 7-10 business days, we help you move fast once interconnection is secured.

Sources

• LBNL - Grid Connection Barriers to New-Build Power Plants
• LBNL - Queued Up Report
• FERC - Explainer on the Interconnection Final Rule (Order 2023)
• FERC - Explainer on Order 2023-A
• FERC - Fact Sheet: Improvements to Generator Interconnection
• PJM Inside Lines - PJM Chooses 51 Generation Projects
• PJM Inside Lines - 2025 Long-Term Load Forecast
• ISO-NE / Day Pitley - FERC Show Cause Orders Summary
• CAISO - Generator Interconnection
• Utility Dive - Grid Interconnection Queues Jumped 27%
• Utility Dive - Navigating FERC's New Interconnection Rule
• Canary Media - Lots of Demand, Too Little Grid