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Feed-in Tariff Systems Take Hold in North America

solarpanelsEven as state-level feed-in tariffs start to take off, global programs are the most effective way to ensure sustainable growth in the photovoltaic (PV) market. A white paper on solar feed-in tariffs from the SEMI PV Group says stable, transparent and substantial national feed-in tariffs will fuel rapid growth and new investments in the solar industry.

The white paper recommends new public policies in support of solar power adoption and best practices for feed-in tariff design and implementation.

The paper indicates that feed-in tariffs can be successfully integrated with existing polices such as rebates, renewable portfolio standards, tradeable renewable energy credits, net metering, and tax credits.

Best practices cited in the paper include support for technology differentiation, generation cost-based rates, fair purchase and interconnection requirements, use of fixed-price and long-term payments, and the use of predictable incentive declines.

Nearly 80 percent of the world’s solar demand comes from FiT-supported policy environments, according to the white paper. The SEMI PV Group says feed-in tariffs are preferred because they are performance-based (pay for actual MW), do not require taxpayer subsidies (cost assigned to energy users), and do not conflict with other renewable energy policies.

A white paper released in September by the Greener Dawn Climate also indicates that FiT policies may be a less expensive way to renewable energy development compared to other policies including renewable energy certificates (RECs).

In the U.S., the states of Washington and Wisconsin have proposals for feed-in tariffs. Washington state has plans for a bill on feed-in tariffs, called the Standard Offer Contracts (SOC) in the next legislative session, reports Wind-Works.org. Projects are capped at only 2 megawatts (MW) for all renewables, which will be restrictive for wind, geothermal, and wave energy because infrastructure costs are so high for those renewable projects, according to the article.

Washington state currently has production-based incentives for residential-size solar and wind systems that qualify for the state’s net-metering program, reports Wind-Works.org.

The current program (PDF) pays $0.30/kWh for solar PV and $0.12 US/kWh for wind systems up to 25 kW through 2020, and includes substantial bonus payments for products built instate, reports Wind-Works.org.

The proposed changes to Wisconsin’s Renewable Portfolio Standard requires 10 percent of the state’s generation to come from in-state renewables, reports Wind-Works.org. According to RENEW Wisconsin, this translates into the installation of 7,000 MW of solar PV or 3,500 MW of wind generating capacity, reports Wind-Works.

Legislation (PDF) for feed-in tariffs is also expected in the in Minnesota, Michigan, and Indiana, reports Wind-Works.org.

In September, Hawaii and the Ontario province in Canada approved feed-in tariffs, followed by California in October.

Earlier in the year, Gainesville’s City Commissioners in Florida approved the implementation of a solar feed-in tariff in the city, while Vermont implemented a pilot feed-in tariff policy and Nevada added incentives for solar energy.

In Canada, the Ontario Power Authority (OPA) has awarded 700 contracts for renewable energy to homeowners under the province’s new feed-in tariff program, reports Wind-Works.org. The OPA received 8,000 MW of applications for wind and solar energy contracts under the province’s microFit program.

Of the 8,000 MW of applications for feed-in tariffs, nearly 1,300 MW were for solar PV, and 6,300 MW were for wind energy, but there is only 2,500 MW of grid capacity available in the first phase of OPA’s feed-in tariff program, reports Wind-Works.org. Another 1,500 MW of grid expansion is currently under construction with the projection of as much 4,000 MW of renewable capacity in three to five years, according to Wind-Works.org.

The OPA estimates that the first FiT projects will generate more than $5 billion in investments in manufacturing, design, construction and engineering, and together with other initiatives under the Green Energy Act will help create 50,000 “green collar” jobs. Click here for more information about Ontario’s Feed-In Tariff Program.

Feed-in tariffs may also help The European Union Energy Council meet its new Energy Performance of Buildings Directive (EPBD) that requires all buildings to be energy neutral by 2020, reports the Phoenix Green Business Examiner.

In Europe, the Spanish government recently authorized 338 renewable energy projects with a capacity of 9,050 MW, reports Renewable Energy Magazine. The registered plants, under Spain’s registry of pre-assignation of remuneration, can now sell power to the grid under the existing feed-in tariff system over four stages between 2010 and 2013, according to the article.

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