In 2017, California implemented Rule 21, making it the first state to require smart inverters in solar systems. The basic definition of a "smart inverter" is one that is able to communicate with the utility. See at the bottom of the page inverters that meet Rule 21.
Rule 21 is broken up into 3 Phases: 1. Phase 1 Autonomous Functions 2. Phase 2 Communication Protocols 3. Phase 3 Advanced Functions
Phase 1 took place in September 2017, when all new solar systems required smart inverters that complied with UL 1741-SA. Phase 2 was to be rolled out in March 2018 (which has passed), or 9 months after the release of an industry-recognized communication protocol certification test standard for inverters (it looks to be the new deadline). Phase 3 is to be decided, with the exact requirements to yet be determined.
California’s Electric Rule 21 was created to implement greater interconnectivity between solar smart inverters and utility distribution centers to ensure a safer, more reliable grid. With the ever increasing amount of residential and commercial solar system installations and their added energy production to the grid, the existing utility communication network leads to preventable power surges, voltage sags, and blackouts.
Rule 21 is thus meant to remedy these voltage fluctuations by pushing solar inverters to facilitate a bidirectional communications link to the utility. By having access to the exact production levels from residential solar systems, the utility will finally have accurate information in order to maintain a constant and stable electrical flow.
Overall, Rule 21 represents increased efforts to ensure an advanced grid functionality with a two way power flow, as solar energy continues to widely integrate into the energy mix.
You can learn more in our California Rule 21 Overview Video
UPDATE: Following California's lead, Massachusetts is implementing their own version of Rule 21: ISO-NE will require new solar systems to implement smart inverters that comply with UL 1741-SA. These requirements will go into effect in Massachusetts later this year, likely in June.
Article updated by Tatyana 4/5/2018