Before July 2023, a solar developer could file an interconnection application for a few thousand dollars, hold a queue position for years, and exit without penalty if the studies came back unfavorable. Filing was cheap. Leaving was cheap. The only parties paying the cost were the projects stuck behind them.
By 2023, US interconnection queues held over 2,600 gigawatts of proposed capacity — more than double the entire installed generating fleet. The Lawrence Berkeley National Laboratory, which tracks queue withdrawals annually, found that roughly 80% of projects entering the queue in a given year eventually withdrew. The queue wasn't a record of serious development intent. It was a holding pen for options.
FERC Order 2023, issued that July, targeted this specific problem. The rule applies to every FERC-jurisdictional grid operator: PJM, MISO, CAISO, SPP, NYISO, ISO-NE, and others. ERCOT operates outside FERC's direct jurisdiction and implemented its own analogous reforms through the Public Utility Commission of Texas.
Why the old process broke down
The previous system was serial: one project studied at a time, in arrival order. Every withdrawal triggered a re-run of the analysis for every project behind it — a cascade that pushed actual timelines to four to six years in congested regions like PJM. The deeper problem was cost: entering the queue required a deposit of a few thousand dollars, most of it refundable on exit. Filing speculatively made rational sense. Developers filed early and often. The queue filled with positions that weren't going anywhere.
What Order 2023 requires
The reform introduced two structural changes that address different parts of the problem.
Cluster studies: Instead of evaluating projects one at a time in arrival order, ISOs now group applications filed within a defined window — typically every six months — and study them simultaneously. Projects in the same geographic area share a single grid impact analysis. One withdrawal no longer forces the ISO to restart. The cluster is studied as a set, not a sequence.
Readiness requirements: To hold a queue position, developers must now demonstrate genuine project intent before studies begin.
| Readiness requirement | What it means in practice |
|---|---|
| Site control | A signed lease, purchase contract, or option agreement on the land |
| Financial security deposit | Paid upfront, with non-refundable portions that escalate through the queue |
| Milestone reviews | Projects that miss defined readiness checkpoints lose their position |
Site control is the change that most directly affects land buyers. Under the old rules, a developer could file an application and find land afterward. Now the land agreement comes first. Developers who want to enter the queue must have already committed to a parcel — which means they evaluate sites more carefully before signing anything.
How deposits changed
The deposit reform is what gave "first ready, first served" its teeth. Without financial cost, readiness requirements are paperwork.
Before Order 2023, most interconnection deposits were refundable. Withdraw at any stage, recover most of what you paid. Post-reform, non-refundable portions escalate as a project advances. Under PJM's implementation, the non-refundable share reaches 100% once an interconnection agreement is executed. MISO uses a similar structure. Exact amounts depend on project size and interconnection voltage level, but a utility-scale project now carries six figures in non-refundable exposure before it completes the study process.
The withdrawal penalty is why speculative filings have declined. A developer entering the queue has already committed to a site, paid a material deposit, and accepted the risk of forfeiting it if they exit late. That changes the population of projects in the queue — and makes the wait-time figures published by ISOs more reliable than they were two years ago.
Which ISOs have implemented it
FERC required ISOs to complete their transitions by June 2025. Most did, some with modifications.
PJM, covering the Mid-Atlantic and parts of the Midwest, completed its first cluster study cycle in 2025. MISO, covering the upper Midwest and central US, ran its first cluster cohorts through 2024 and 2025. CAISO in California finished its first cluster window in late 2024. SPP, covering the central US and Great Plains, had one of the cleaner transitions — partly because its queue volume is lower than PJM or MISO.
None of this cleared the existing backlog. Cluster reform applies to new applications. Projects already in queue under the old serial system continue under those rules until they complete or withdraw. As of early 2026, LBNL's tracking shows total pending capacity declining slowly from the 2024 peak, but the queue remains historically large.
What it means for land near a substation
The reform sharpened the case for substation proximity in ways the old system didn't. Under serial studies, a project far from a substation could get studied quickly simply by filing early. Under cluster studies, a project's grid impact is evaluated against every other project in its cohort, against the same transmission constraints. Land that requires less new infrastructure — shorter interconnection lines, smaller upgrade requirements — produces better outcomes across the cluster.
Developers now evaluate grid position before committing to site control, because site control comes before the queue. The parcel analysis that used to happen informally during the option period now happens before the lease is signed. That calculus favors land with clean constraint profiles and clear substation proximity.
The honest read on Order 2023: it didn't move the congested zones — West Texas CREZ corridors, PJM's mid-Atlantic, parts of CAISO — and those areas remain slow. What it changed is the quality of the development intent behind each queue position. Land with clear title, strong grid proximity, and no obvious constraint failures now sits behind developers who have committed real money to be there. That's a different counterparty than the one the old system produced.
Sunnyplans maps substation and transformer proximity for every indexed parcel across all US states — the distances that determine whether a developer's interconnection path is straightforward or expensive before a single study is filed.