Feed-in Tariffs May Push Renewables More Than RECs

September 14, 2009

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By establishing a set price, feed-in tariff (FiT) policies reduce the need for multiple incentives and complex financing through tax liabilities currently used to supplement renewable portfolio standard (RPS) targets in the U.S., according to a white paper from Greener Dawn Climate. The report also indicates that FiT policies may be a less expensive way to renewable energy development compared to other policies including renewable energy certificates (RECs) based on evidence from Europe.

FiTs provide financial incentive to renewable energy producers by offering guaranteed interconnection to the electricity grid and long-term contracts at premium fixed prices, said Greener Dawn Climate. Other benefits include support for state initiatives including economic development, job creation, greenhouse gas reduction and energy diversification, while helping to drive the development of new technologies, according to the white paper.

The white paper addresses the opportunities and challenges that face FiT implementation, provides best practices, and answers key questions regarding the applicability of FiT policies in the U.S.

According to the paper, the five best FiT practices fall under the categories of program duration, program capacity, guaranteed standard access to the grid, setting an effective payment rate and payment differentiation by tech, size, and location.

The paper also examines the impact of current FiT policies adopted or proposed by local and state governments including Gainesville, Fla., the state of Vermont, and three separate initiatives in California.

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Reader Comments

I for one think FIT is better suited to renewable energy standard than cap-and-trade especially in America, granted the resistance of special interests is too fierce.

FIT is designed to put subsidies into ratepayer’s pocket directly, in this regard, it will be the most cost-effective way by far.

It can also raise home value, stimulate a construction arena and serve as a reliable pension and a safety system against escalating fuel price unquestionably, I guess. And I’ve never seen a single person to repent installation of solar panels, wind turbines and geothermal power etc on media.

By converting the ‘unsustainable’ war and military wasting like health care wasting into investing in a smart grid, charging infrastructure, the entire world will live in peace. U.S. spend more on military than the next 25 countries combined.

hsr0601 | September 15th, 2009

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