Overcoming Gridlock: How Solar Developers Can Navigate Interconnection Challenges in 2025

The demand for solar energy in the U.S. is surging, but grid interconnection remains one of the biggest obstacles to deploying new projects. At the end of 2023, 1,100 GW of utility-scale solar projects were stuck in interconnection queues, yet only 31 GW reached commercial operation in 2024—highlighting a severe bottleneck in bringing clean energy online.

With outdated grid infrastructure, overwhelmed transmission systems, and regulatory hurdles, developers face delays, escalating costs, and growing uncertainty. But by adopting proactive strategies—such as early planning, strategic site selection, and new grid-enhancing technologies— they can improve their chances of securing interconnection and keeping projects on track. Let’s explore how to address the causes of this gridlock and get your projects online, on time.

What’s Behind Interconnection Challenges?

With a record-breaking number of projects in development, utilities and grid operators are struggling to keep up with overwhelmed interconnection queues. The U.S. power grid is facing a severe backlog of requests, creating a bottleneck that has caused projects to spend, on average, over four years in queues before receiving approval. In fact, between 2000 and 2023, only 19% of projects that submitted interconnection requests reached commercial operation.

This bottleneck is often caused by the patchwork nature of combined federal, state, and regional policies, making the approval process unpredictable and time-consuming. While the Federal Energy Regulatory Commission’s (FERC) Order No. 2023 introduced a "first-ready, first-served" cluster study process, developers still face lengthy studies, high upgrade costs, and slow utility decision-making.

State-level permitting complicates the approval process, since rules vary widely across jurisdictions. In response, some states, like Illinois, are considering new incentives for energy storage development to help ease grid congestion and make interconnection more feasible.

Even when interconnection is granted, necessary grid upgrades can still drive up costs and extend timelines. Much of the U.S. grid was built 70-100 years ago, with limitations that have contributed to solar developers withdrawing nearly 80% of interconnection requests.

As these challenges stack up, the following practical strategies can help developers overcome these roadblocks.

Strategies for Solar Developers to Overcome Interconnection Challenges

Fortunately, solar developers can do much more than just submit applications, wait in line, and hope for the best. Data-driven site selection, engaging directly with utilities, and using new grid technologies can help developers reduce project risks, avoid excessive upgrade costs, and secure interconnection faster.

Here’s how:

Data-Driven Site Selection

Interconnection costs vary dramatically based on location. Choosing the wrong site can add millions in unexpected grid upgrade costs, or push a project into multi-year delays.

Instead of simply looking for available land:

Analyze utility hosting capacity maps: Many utilities now publish hosting capacity maps to show where the grid has available capacity for new solar projects. These maps can help developers avoid overloaded substations and congested feeder lines.

Target areas near planned transmission expansions: Developers can proactively site projects near transmission expansions to align with grid investment plans and speed up approvals.

Consider brownfields and former industrial sites: Some states, like New York and Illinois, prioritize landfill and brownfield solar projects by offering incentives and faster permitting. Developers can work with state agencies to secure quicker approvals while avoiding prime farmland and residential zoning conflicts.

Applications with Preemptive Technical Solutions

Interconnection delays can happen because developers submit incomplete or generic applications, forcing utilities to request multiple revisions. To avoid this:

Proactively conduct power flow studies: Instead of waiting for utilities to flag potential grid constraints, work with engineers to run load flow and fault current analyses ahead of time. This allows your team to propose solutions proactively, such as adjusting feeder configurations or adding reactive power support.

Offer grid-friendly inverter settings: Smart inverters with voltage ride-through, reactive power control, and grid-forming capabilities can improve a project’s chances of approval. Utilities often favor projects that include these settings upfront, because they help stabilize the grid.

Provide an optional storage component: In congested areas, utilities sometimes reject new solar capacity due to peak-hour grid constraints. By shifting power delivery to off-peak hours, a storage component with dispatchability controls can help a project gain approval.

Utility Engagement – before the Application Process

Developers sometimes assume that they should wait until after submitting an interconnection request to talk to the utility. However, projects that engage utilities before applying can get ahead of potential roadblocks.

Schedule pre-application meetings with utility engineers: Some utilities allow developers to request a preliminary feasibility review before formally entering the queue. These discussions help flag any immediate red flags that could lead to delays, rejections, or costly upgrades.

Align project timelines with utility investment plans: Utilities often publish grid modernization and expansion plans. Developers can align project schedules with planned substation upgrades to secure lower-cost interconnections.

Build long-term relationships with grid operators: Working consistently within a utility's service area helps establish credibility, leading to better communication and collaboration when securing approvals.

Grid-Enhancing Technologies (GETs)

As interconnection queues grow, grid-enhancing technologies (GETs) are critical tools for developers seeking to improve project viability.

Dynamic line rating (DLR): This technology allows transmission lines to carry more power under favorable weather conditions. Developers can advocate for DLR assessments in congested areas to free up project capacity.
Smart inverters: New inverters can provide grid-forming capabilities and voltage support, which can help a project gain approval faster by reducing its strain on the local distribution system.
AI-assisted interconnection studies: The DOE’s AI4IX program is working on AI-powered tools to help utilities process interconnection requests faster and identify grid constraints more efficiently. Developers who adopt compatible modeling software may see quicker study approvals.

Policy Improvements

Navigating the interconnection process means staying on top of regulatory shifts that could impact project timelines and costs – and, in the long term, advocating for more streamlined and efficient approval processes.

FERC’s Order No. 2023 introduced a "first-ready, first-served" cluster study process to prioritize projects in advanced development. Developers demonstrating project maturity (land control, permits, and financing) may get through the queue faster.
Process reform: For a long-term solution, many developers are pushing for a nationwide standardization of interconnection requirements to prevent speculative projects from crowding the queue. Working with industry associations like SEIA can help ensure that regulatory changes benefit well-planned projects.

Key Takeaways: Making Interconnection Work for Your Project

Although grid congestion and regulatory bottlenecks do present major obstacles for solar developers, proactive planning, data-driven site selection, and collaboration with utilities can significantly improve the chances of securing interconnection – without costly delays.

With smart grid technologies, optimized project applications, and advocacy for long-term regulatory changes, developers can speed up approvals and position themselves for long-term success.

At Castillo Engineering, we’ve successfully designed and optimized over 1,500 solar and storage projects. Contact our team to learn more about how we can assist with your next project.