What happens behind the meter, stays behind the meter

The Solar Energy Industries Association wins against Edison in an Appeals Court hearing defining a “facility” based on the purpose of its parts, culminating in its AC grid output, versus the sum of individual components – such as solar and battery inverters.

September 24, 2025 John Fitzgerald Weaver

Image: Wikimedia Commons

In a September 9, 2025 ruling, Solar Energy Industries Association (SEIA) v. FERC, the U.S. Court of Appeals for the D.C. Circuit upheld FERC’s determination that the “power production capacity” of a solar-plus-storage facility under PURPA is defined by its “send-out capacity,” not the combined rating of its solar and battery inverters.

The ruling re-establishes that a solar plus storage hybrid facility, that shares a single interconnection, should be considered based upon the peak electrical output that the facility can inject into the power grid. It should not be based on the cumulative inverter values—one for the solar portion and one for storage.

Solar experienced law firms Foley & Lardner, Stoel Rives, and Steptoe published summaries of the ruling.

The case stems from Broadview Solar’s submission of a solar plus storage facility, with 80 MWac of solar inverters, and a 50 MWac battery inverter, as an 80 MWac-or-less PURPA-eligible facility. Initially, the facility was accepted – however – two parties sued arguing the batteries “gamed” the original purpose of PURPA because the combined system could generate up t0 160 MW of “raw DC power”.

The case hinged on how “facility” and “power production capacity” are defined. From the filed case,

Because Congress chose to refer to the “facility” rather than a particular subcomponent like the power generation unit, the best reading is that the “power production capacity” at issue is the capacity of all the components as they work together to produce usable power. The only grid-usable form of electric energy the facility produces is AC power. The most natural reading of “power production capacity” of the facility, then, is the amount of AC power that the overall facility transmits to the electrical grid.

The filing also states, “as a practical matter, looking at the solar array itself makes little sense because it generates DC power, which is not the form in which the electricity is sold.” The judges further noted that associating transmission capacity and production capacity was appropriate because the two terms—while different—overlap.

Petitioners against the facility argued that solar power’s capacity factor – which at a utility scale facility may be between 20% and 30% – was being increased beyond what its natural state was with the battery, which was another reason this violated PURPA’s guidance. The judges ruled that capacity factor itself wasn’t a defining factor, in that other PURPA-qualifying alternatives – like geothermal, biomass, or waste energy – had very high capacity factors, and thus this logic wasn’t viable.

As noted by Foley & Lardner, especially in our times of data centers, and power parks – dissent opinion, talked about behind the meter projects that might feed directly into a facility. In such a case, a project could simultaneously be limited to 80 MWac of grid output while sending DC power to a neighboring facility—suggesting total capacity should be considered.

However, the court observed that a facility delivering electricity directly to a neighboring data center would likely not apply for PURPA approval, since PURPA’s purpose is to guarantee a buyer of electricity—and in this case, the data center would already be that buyer.

Steptoe notes that the dissenting opinion also expressed ‘non-textual concerns’, suggesting that PURPA ‘forces” power purchases at above-market pricing. The firm suggested this dissent may indicate further litigation, possibly including an “en banc” hearing or even review by the Supreme Court under a Republican-controlled political environment.

The final sentence in the concurring opinions stated, “Having employed the available tools of statutory construction, we hold that section 796(17)(A) is best read to refer to the maximum amount of AC power a facility can deliver to the electrical grid at any one time.”

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