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"The Solar Alliance is
dedicated to accelerating the deployment of solar energy in the United
States…[and] provide balanced and sound technical and policy expertise…Feed-In-Tariffs (FITs)
– also known as Renewable Energy Payments (REPs) – are being
proposed…FITs are often misunderstood, but can be useful policy tools…
"Feed-in-tariffs
require payments to be made by a utility company to a vendor system
that sells its power directly to the utility…Payments are typically
fixed over some period of time…for both the electricity and… renewable energy certificates (RECs)…"
The FiT concept is gaining momentum worldwide. (click to enlarge)
"The
Solar Alliance believes that properly designed FITs are an effective
policy instrument to promote the growth of solar energy…[and]
particularly useful in supporting specific market segments that are not
adequately incentivized via other policies…FITs should be implemented
in a manner that does not undermine effective net metering policy or
other effective incentive programs.
"I. General Principles…1.
FIT programs can be designed to directly or indirectly respond to
market maturation…[and] reduce incentive levels…in response to market
penetration…2. FIT systems should be able to take advantage of other
policy mechanisms and build upon other programs…3. All consumers should
have the option of becoming solar generators and using a FIT to supply
the grid or using net metering to displace their own internal loads…4.
FITs can be configured for meeting on-site load (for an example see the
“AB 1969” tariff in California)…[or] can accommodate two systems, one
to serve onsite load and the other to feed the grid…5. Setting the
initial rate for a FIT is one of the more difficult challenges around
implementing FITs. Too high a rate will overpay renewable companies,
and too low a rate will stall market development…6. FITs can be funded
from… government funds…utility surcharges…or blended into rates.
Policy-makers should establish long-term, sufficient funding to ensure
a stable and sustainable solar industry."
click to enlarge
"II.
Detailed Characteristics…1…FITs should be offered by all utilities…for
systems up to 20MWs…2…[U]tilities must offer the FIT to any project,
subject to reasonable
application, demonstration and audit rules…3.
Rates should be differentiated by technology across renewable energy
sources (wind, biomass, solar, etc.) and by project size…4. Rates for
new projects under the FIT program should diminish in response to
increased volume (MWh)…5. Rates and goals for a FIT should be reviewed
when market penetration rates have been met…[or] can be designed to
automatically adjust rates…
"…6. FITs should feature 20-year
contract lengths to support investment decisions [or]…If choices among
terms exist, then the selection should be made by the generator rather
than the utility…7. FITs should allow for ownership of projects by both
site owners and third parties…[U]tility-owned projects should not be
allowed to participate in the FIT…8. In computing the amount of the
FIT, RECs should be recognized and valued separately…9. FITs should
feature a monetary reservation guarantee that should be proportional to
the size of the project and should have pre-determined milestones."
Policy Recommendation – Feed-In-Tariffs
August 2009 (The Solar Alliance)
posted by Herman K. Trabish
