What is the 120 rule for electrical panels?

The 120 percent rule for electrical panels is an important National Electrical Code rule that applies to connecting solar panels, battery storage, or other power sources to a residential load center. The rule is found in NEC 705.12 and states that the sum of the main breaker rating plus 125 percent of the backfed breaker rating cannot exceed 120 percent of the panel bus bar rating. In simpler terms, it limits how much solar or other generation you can backfeed into your main panel without overloading the bus bars. For example, if you have a 200 amp panel with a 200 amp bus bar and a 200 amp main breaker, you can backfeed a maximum of 40 amps of solar, because 200 amps plus 125 percent of 32 amps equals 240 amps, which is 120 percent of 200 amps. If you have a panel with a 225 amp bus bar and a 200 amp main breaker, you can backfeed more. This rule exists because when you have both utility power and solar power feeding the bus simultaneously, the bus can carry more current than the main breaker alone would allow, potentially overloading it. If your solar system exceeds the 120 percent limit, you need to derate the main breaker, upgrade the panel to a higher bus rating, use a supply side connection, or install a separate subpanel for solar. An electrician must calculate this for every solar installation.