Financing Renewable Energy: Feed-in Tariff (FIT) Introduced in Congress
Representative Jay Inslee (D-WA) has introduced legislation to establish a feed-in tariff (FIT) for renewable energy. Feed-in tariffs have made Germany a solar powerhouse that employs 40,000 people in the solar industry alone, and an estimated 140,000 jobs in renewable energy. FITs have not been a topic of discussion in this country, but now that is sure to change, as the conversation shifts to ways to finance the growth of renewable energy. Renewable Energy World reports that:
“Inslee’s legislation would require utilities — at the request of any new renewable energy facility owner — to enter into a 20-year fixed-rate power purchase agreement. Uniform national “renewable energy payment” rates would be set by the Federal Energy Regulatory Commission at levels that would provide a 10% internal rate of return on investment for available commercialized technologies in regions constituting the top 30th percentile of renewable energy resource potential in the U.S..”
In plain English, this means that if you install solar PV panels on your home, the utility has to buy the electricity you generate at a higher rate than retail, guaranteeing you a return on your investment. Extending this power purchase agreement for 20 years gives everyone — especially those who want to invest in renewables or start a small business installing solar panels — assurance of return on their investment.
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In Germany this has motivated citizens and businesses to put up solar panels wherever they can, allowing Germany to get 14.2 percent of its energy from renewable sources. Though Inslee’s legislation has little hope of getting through this Congress (they are still stalling on renewing the existing solar energy tax credits), FITs will surely be in the news more as the election season heats up.
Related Posts:
House Democrats Introduce National Feed-in Tariff for Renewable Energy Projects
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Image Credit: Carol Gulyas
I see these going down the expressway pretty often. I cannot help but to smile when I do get to see them.
http://www.flickr.com/photos/gigadafud/2513807256/
There is a new world wide web emerging right before our eyes. It is a global energy network and, like the internet, it will change our culture, society and how we do business. More importantly, it will alter how we use, transform and exchange energy. For more information, see http://www.terrawatts.com.
These are the essential drivers for a revolution in the way we produce and consume energy. From a technical viewpoint the shift is entirely possible; all it requires is political will and policy support. Check out: http://www.greenpeace.org/australia/news-and-events/news/Climate-change/blueprint-energy-rev
We need more discussion on this matter in order to come up with ways of fast tracking renewable energy programmes.
FITs have not been a topic of discussion in this country, but now that is sure to change, as the conversation shifts to ways to finance the growth of renewable energy. It is true. Maatthews Mooketsane Bnatsijang
[...] Financing Renewable Energy: Feed-in Tariff (FIT) Introduced in Congress [...]
[...] in the offshore wind, solar, and biomass/other categories. Legislation in Germany, including feed-in tariffs offers a strong market for renewable [...]
Dear Sir,
I wish to question whether Government Feed In Tariff schemes, although well intentioned, is poor economic policy in its current form, and whether it should be changed (or expanded) as described below.
It costs about $20,000 for a household to install solar panels to offset their household energy usage, and it costs more than $1,000 per year for electricity consumers to ’subsidise’ each household receiving the generous ‘feed-in’ tariff, not to mention the cost of any installation rebate subsidy.
It is smarter if a household is able to invest in a 1/1000 share of a 2.5 mw Government large wind turbine (estimated cost $5,000 per household), which would generate the same amount of renewable energy.
Households cannot do this themselves, and need Government to implement and manage the scheme.
Potentially, it would
(1) tap a very large funding source for renewable energy (which the Government cannot fund by itself),
(2) enabling many more households who cannot afford $20,000 for solar energy to offset their energy consumption with renewables,
(3) not require $1,000 per year subsidy per household for ‘feed-in’ premium.
(4) not require installation rebate
(5) run at no nett cost to the Government or other electricity consumers.