You're right, their logic is flawed, and you're correct in pointing out the violation of the 120% rule. Here's the breakdown and the relevant code section in the 2020 NEC you can use to explain it

The Problem: 120% Rule Violation

The 120% rule (NEC 705.12(B)(2)(3)(a)) states that the sum of the overcurrent protection device (OCPD) rating protecting the busbar and the sum of the OCPD(s) connected to the busbar(s) supplying power to the busbar shall not exceed 120% of the rating of the busbar. In your situation, the MSP busbar is rated for 200A. The main breaker protecting the busbar is 200A. The existing PV breaker is 20A. Their proposed new PV breaker is 40A.That means: 200A (Main) + 20A (Existing PV) + 40A (New PV) = 260A120% of the 200A busbar rating is 240A. 260A > 240A. This violates the 120% rule on the MSP.Why their Logic is Wrong

They are mistaken in believing that the subpanel's main breaker isolates the subpanel busbar from the MSP busbar in the context of the 120% rule. While the subpanel's main breaker protects the subpanel busbar, it doesn't change the fact that the MSP busbar is still being fed power from multiple sources: the utility feed AND both PV systems. The 120% rule addresses the cumulative effect of those sources feeding INTO the MSP busbar.

Relevant 2020 NEC Code Section to Cite



705.12(B)(2)(3)(a) Supply-Side Source Connections. This is the specific code section that outlines the 120% rule. It clearly addresses the aggregate of OCPDs supplying power to the busbar. The language is fairly explicit. You can show them the actual wording: "The sum of the overcurrent protection device (OCPD) rating protecting the busbar and the sum of the OCPD(s) connected to the busbar(s) supplying power to the busbar shall not exceed 120 percent of the rating of the busbar." Definition of "Premises Wiring (System)." You may also need to point out that the entire electrical system, from the service point to the loads, is considered a "premises wiring system." The subpanel is an extension of that system, not an isolated entity.

How to Explain It


State the Rule

Clearly state the 120% rule from NEC 705.12(B)(2)(3)(a).
2.

Show the Calculation

Demonstrate the calculation (as shown above) that results in exceeding 120% of the MSP busbar rating.3.

Address the Misconception

Explain that the subpanel breaker doesn't isolate the MSP busbar from the solar contribution. The MSP busbar is still receiving power from BOTH PV systems.4.

Analogy (Optional)

If they're still not understanding, use an analogy: Imagine a pipe with a maximum flow capacity of 200 gallons per minute. If you feed 200 GPM from one source and then try to add another 60 GPM from another source, you'll exceed the pipe's capacity, even if you have a valve on the second source. The 120% rule is like that capacity limit.

Possible Solutions



Load-Side Connection with a Properly Sized Breaker

A load-side connection, carefully sized based on the feeder and load calculations, might be a viable option.

Line Side Tap (with appropriate approvals)

A line-side tap upstream of the service disconnect, properly fused and engineered, could be an option. This is a more complex and expensive solution and usually requires utility approval.

Change the sub panel to a 200amp subpanel

Then the load on the main panel could be reduced.

Important Considerations



AHJ Approval

Ultimately, the Authority Having Jurisdiction (AHJ) has the final say. Your client should discuss their proposed design with the AHJ before proceeding.*

Engineering Review: This type of installation might warrant a professional engineering review to ensure compliance with all applicable codes and safety standards. Flag for review