NREL Study Finds Feed-in Tariffs Are Responsible for 75% of all Solar PV Deployments

Feed-in tariffs (FITs) are responsible for 75 percent of all solar photovoltaic (PV) and 45 percent of all wind development worldwide, according to a new report from the National Renewable Energy Laboratory (NREL), reports Wind-Works.com. The report provides a best practices design guideline for U.S. policymakers, showing the benefits and disadvantages of different FIT polices around the globe.

The report, “A Policymaker’s Guide to Feed-in Tariff Policy Design,” finds that FITs are the most widely used renewable energy (RE) policy in the world, accounting for a greater share of RE development than either tax incentives or renewable portfolio standard (RPS) policies. It has fueled significant growth of renewable energy in Europe over the past decade, reports Wind-Works.com.

The report reveals that FITs have resulted in the deployment of 15,000 MW of solar PV, and 55,000 MW of wind power from 2000 to 2009 in the European Union. In comparison, there was only 25,000 MW of wind in the U.S. and 1,250 MW of solar PV at the end of 2009.

The report provides a complete overview of policy options and highlights key elements that make the policies successful, reports Wind-Works. Policies covered include long-term policy stability, payments based on the cost of generation, guaranteed access to the grid, eligibility to all end users and project developers ( including some utilities), “must take” provisions for the electricity generated, and differentiating tariffs by technology, size, location, and resource intensity.

NREL researchers say FIT policies offer a number of design options to meet policy goals for renewable energy deployment, but policy designers must evaluate the different design options based on how they will function together as an integrated framework.

NREL’s analysis on U.S. FITs in a previous report indicates that states can offer FITs but the programs must be tailored to meet federal requirements. The report cites two legal ways to implement feed-in tariffs — under the Public Utility Regulatory Policies Act (PURPA) of 1978 and the Federal Energy Regulatory Commission (FERC).