More predictable interconnection timelines due to cluster studies required by FERC Order 2023 are helping improve solar and storage project lifecycle uncertainties, but more compliance at a quicker pace is needed to fully speed up the energization.

An April 29 panel during NPM’s US Development and Finance Forum spoke on project lifecycle obstacles and solutions in 2025, where the general consensus was that Order 2023 from the Federal Energy Regulatory Commission (FERC) has helped provide definitive, predictable timelines for interconnection through grouped cluster studies.

“The cluster study approach, which we’ve been using in New York for more than a decade, is now sort of the standard, and it gives a lot more opportunities for a complete end-to-end and some certainty on it by the time you get to the end of that cluster,” said Richard Dewey, president & CEO of New York Independent System Operator (NYISO).

Dewey was joined on the panel by energyRe’s CEO Miguel Prado, Eversource Energy’s Vice President of Transmission Policy and Interconnections & Compliance Vandan Divatia, QCells’ Head of M&A Kevin Yaich, and Arevon’s Chief Development Officer Shanelle Montana.

Interconnection timelines and reform

While FERC Order 2023 got the ball rolling for some regional interconnection reform, Dewey said more public information should be available for developers when locating where and when they plan to build.

Additionally, FERC Order 2023 compliance is slower than many would like.

“There have been a number of reforms happening on the ISO level,” Montana said. “I don’t think they’re happening fast enough. We’re seeing that these reforms are just not keeping up with the amount of demand that’s trying to get on the grid, and that is slowing everything down.”

Divatia from Eversource said that ISO New England is undergoing its first cluster study this year, so it’s yet to be seen how beneficial the process will be to stakeholders across the board.

“We’ve done targeted clusters, like on the Cape (Cape Cod) and other parts of the system where there have been some benefits,” Divatia said. “But the transitional cluster as a part of 2023, in my opinion, it’s yet to be seen whether it’s going to be really beneficial to everyone. As a utility, I come at it slightly differently. We try to look at co-optimization opportunities. Are there investments we are making on the system that if we upsize could benefit developers? Are there anticipatory energy hubs that we can deploy, because most of the resources that we’re building are likely for public policy, so the states can get behind developing energy hubs?”

Prado said many stakeholders are awaiting another mandate from FERC Order 2023 for the creation of “heat maps” showing available sites to develop on and how difficult their path to operational status is. Those maps aren’t widely available yet.

Divatia said the places that he has seen with the highest costs for interconnection are where developers haven’t had an opportunity to identify the best point of interconnection in a given area. In certain places, it’s tough or sometimes impossible to avoid high interconnection costs, he said.

“It’s generally congested, even if it’s a retired coal or oil asset doesn’t mean there isn’t congestion, because we might have other projects in that area that might have load growth associated with it that might result in lines getting overloaded,” Divatia said.

Rising interconnection costs are also impacting asset sale timelines, as Montana explained.

“The M&A market right now is going through, I don’t want to say turmoil, but I would say a pause,” Montana said. “A lot of the investment that’s sort of dangling out there right now is sort of the ‘Great Pause’ that’s happening because you have a lot of flip shops, and I don’t say that in necessarily a derogatory way, but you have shops that did go in heavy into the last couple of queue cycles in MISO and PJM, and now they’re saying, ‘Okay, well, I actually can’t put up this letter of credit, I can’t continue the security. I need to flip this project, but I didn’t expect USD 100m in my DPP One or USD 75m in my DPP One results. So, what do I do with this asset?’”

Tariffs and the supply chain

Interconnection questions are just one of several topics at the top of industry stakeholders’ minds. New tariffs established under US President Donald Trump have made international purchasing more limited, but manufacturing onshoring isn’t necessarily a one-size-fits-all solution.

Yaich from QCells said contract negotiations with suppliers right now include a battle on “who is taking the risk and how is the risk split between different parties.”

“What we’ve been seeing is generally the supplier is not taking the tariff risk and is pushed to the developer,” Yaich said. “Some of the better terms are negotiated with the largest IPP because they have bargaining power.”

Prado said, in addition to the earlier interconnection discussion, planning is key when it comes to economic and political changes such as tariffs. Anyone can create a more localized supply chain, but it needs to happen over time.

“We as developers, as citizens of the US, we can follow whatever policy the government wants to follow, but what we need is time,” Prado said. “What doesn’t work is that we wake up and overnight have tariffs, but the day after you don’t have tariffs. That is impossible to manage when we are talking about infrastructure projects. If we want tariffs, because we all support domestic manufacturing, that can be done over time. It requires a transition, and we can get there.”

Montana said her firm has begun to supply domestically-produced solar panels to help mitigate rising costs from tariffs, but there aren’t similar US-made solutions for batteries yet.

Also, tariffs impact the entire value chain of renewable energy projects, no matter if it is wind, solar or battery storage. Projects will be delayed because of these tariffs, panelists said, and higher costs of doing business will be passed down the line.

“All the value chain of transmission and generation is impacted by the tariffs,” Prado said. “If we don’t have a solution for it, the final consequence is very simple. It’s a cost increase that the rate payers will have to pay, the customers. I think that the most important thing that we need to preserve is business certainty. That is something that has characterized the US forever, as a place that you can invest and that you can trust that what is agreed will continue to work.”