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Feed-In Tariffs

Source: http://www.tcfits.org; Feed-In Tariffs Driving Renewable Energy Development in Germany

Definition

  • A policy mechanism that drives renewable energy development.
  • Feed-in Tariffs are the world’s most popular policy for developing renewable energy and are widely used in Ontario, Canada, Europe.  FIT’s are also being used in China, Mongolia, and Uganda.
  • Feed-In-Tariff policies have also been implemented in the United States in the state of Vermont and in Gainesville, Florida and are being considered in California; overall, though, very few Feed-In-Tariff policies have been implemented in the United States.

“Feed-in tariffs are simply payments per kilowatt-hour for electricity generated by a renewable resource.  They are the world’s most successful policy mechanism for stimulating the rapid development of renewable energy.

“Feed-in tariffs (FIT’s) are also the most egalitarian method for determining where, when, and how much renewable generating capacity will be installed. FIT’s enable homeowners, farmers, cooperatives, and First Nations (Native North Americans) to participate on an equal footing with large commercial developers of renewable energy.

“FIT’s permit the interconnection of renewable sources of electricity with the electric-utility network and at the same time specify how much the renewable generator is paid for their electricity and over how long a period.

‘FIT’s are widely used in Europe, most notably in Germany, France, and Spain.”   (1)

Why it’s important

“Feed In Tariffs (FIT’s) are a successful policy mechanism for driving the wide-scale development of renewable energy projects.  Unfortunately the U.S. is lagging significantly behind other nations in the implementation of FIT’s.  Despite the overwhelming evidence to the success of FIT policies, very few feed-in tariffs have been implemented in the United States. Instead, 29 states have established renewable portfolio standards, which require utilities to purchase or generate an increasing amount of their power from renewable energy sources or pay a fine.”  (2)

Other countries, primarily in Europe, are driving large scale renewable energy projects at rates much faster than the United States.  For example, “the Canadian province of Ontario, under their European-styled FIT program, has about C$1 billion worth of solar and wind projects started up or in the process of being built in the province, according to government data. Also About 13,000 jobs have been created in Ontario due to green energy legislation, the government estimates.  Ontario’s government plans to shut down all of Ontario’s coal-fired generators by the end of 2014 and as of Feb 2011, the province of Ontario has awarded contracts to 35 solar projects, generating a total of 257 MW of power, four wind projects, for a combined 615 MW, and one 500-kilowatt hydroelectric project. At least 240 wind turbines and one million solar panels will be used in the developments, the province said.” (3)

The Canadian province of Ontario has over 10 times as much solar installed as Colorado.

“Feed-in tariffs are widely used in Europe. Advanced Renewable Tariffs are prominently used in Germany, France, Spain, Portugal, Switzerland, and now Great Britain. Germany and Spain have become worldwide leaders in renewable energy because of their sophisticated systems of Advanced Renewable Tariffs.”  (1)

Background

FIT’s were first implemented in the U.S. in 1978; but the German model, which has proved to be the world’s most effective, began in 1990.  For more background on FIT’s, click visit SourceWatch.

Current News

As of yet, Colorado has not moved forward with Feed-In-Tariff policies, but efforts are mounting in the state.  Colorado House Bill 11-1228 was introduced by Rep. Judy Solano in early 2011, which would have prompted the study of a “feed-in-tariff” program in Colorado, but did not make it out of  the House Agriculture, Livestock, & Natural Resources Committee.  More information is available in this Feb. 2011 article published in RealAspen.

Learn More

Alliance for Renewable Energy

Wind-Works.OrgFeed-in Tariffs and Renewable Energy- A Policy Update

Wikipedia.com-Feed-In Tariffs

ThinkProgress.Org

Related Pages  

NREL Energy Analysts Dig into Feed-In Tariffs

Why Feed-in Tariffs are an Important Climate Solution: They ‘Empower People’

References Cited

(1) Wind-works.org

(2) Diverse coalition endorses feed-in tariff for Los Angeles 

(3) New clean power projects to create 7,000 jobs: Ontario

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