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A feed-in tariff (FiT, feed-in law, advanced renewable tariff[1] or renewable energy payments[2]) is a policy mechanism designed to encourage the adoption of renewable energy sources and to help accelerate the move toward grid parity.

It typically includes three key provisions: 1) guaranteed grid access, 2) long-term contracts for the electricity produced, and 3) purchase prices that are methodologically based on the cost of renewable energy generation [3]. Under a feed-in tariff, an obligation is imposed on regional or national electric grid utilities to buy renewable electricity (electricity generated from renewable sources, such as solar power, wind power, wave and tidal power, biomass, hydropower and geothermal power), from all eligible participants.[4].

The cost-based prices therefore enable a diversity of projects (wind, solar, etc.) to be developed, and for investors to obtain a reasonable return on renewable energy investments. This principle was first explained in Germany's 2000 RES Act:

“The compensation rates…have been determined by means of scientific studies, subject to the provision that the rates identified should make it possible for an installation – when managed efficiently – to be operated cost-effectively, based on the use of state-of-the-art technology and depending on the renewable energy sources naturally available in a given geographical environment.” (RES Act 2000, Explanatory Memorandum A)[5]

As a result, the rate may differ among various source of power generation, installation place (e.g. rooftop or ground-mounted), projects of different sizes and, sometime, by technology employed (solar, wind, geothermal, etc.). The rates are typically designed to ratchet downward over time to track technological change and overall cost reductions. This is consistent with keeping the payment levels in line with actual generation costs over time.

In addition, FITs typically offer a guaranteed purchase for electricity generated from renewable energy sources within long-term (15–25 year) contracts [6]. These contracts are typically offered in a non-discriminatory way to all interested producers of renewable electricity.

As of 2009, feed-in tariff policies have been enacted in 63 jurisdictions around the world, including in Australia, Austria, Belgium, Brazil, Canada, China, Cyprus, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Iran, Republic of Ireland, Israel, Italy, the Republic of Korea, Lithuania, Luxembourg, the Netherlands, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, and in some (nowadays, a dozen) states in the United States [7], and is gaining momentum in other ones as China, India and Mongolia.

In 2008, a detailed analysis by the European Commission concluded that "well-adapted feed-in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity", going to grid parity.[8]. This conclusion has been supported by a number of recent analyses, including by the International Energy Agency [9],[10], the European Federation for Renewable Energy [11], as well as by Deutsche Bank [12].

Contents

History

The first form of feed-in tariff was implemented in the USA in 1978. President Jimmy Carter told Americans that the energy crisis was "a clear and present danger to our nation" and drew out a plan to address it.[13] As reaction to a perceived energy crisis and growing concerns over air pollution, President Jimmy Carter signed the National Energy Act (NEA) and the Public Utilities Regulatory Policy Act (PURPA). The purpose of these watershed laws was to encourage energy conservation and the development of national energy resources, including renewables such as wind and solar.[14]

PURPA required utilities to purchase electricity generated from independent power producers at rates not to exceed their avoided cost [15]. Avoided costs are designed to reflect the cost that a utility would incur to provide that same electrical generation. Different interpretations of PURPA prevailed in the 1980s: some utilities and state utility commissions interpreted avoided costs narrowly to mean avoided fuel costs, while others chose to define "avoided costs" as the "avoided long-run marginal cost" of generation [15] The long-run costs referred to the anticipated cost of electricity in the years ahead. This last approach was adopted by California in its Standard Offer Contract No. 4.[16]. Another provision included in the PURPA law was that utilities were prevented from owning more than 50% of projects, a clause that was introduced to encourage new participants to enter the electricity generation industry.[15]

In order to comply with PURPA, certain states began offering Standard Offer Contracts to renewable power producers. California's Public Utility Commission established a number of Standard Offer Contracts, including Standard Offer No.4 (SO4), which made use of fixed prices, based on the expected long-run cost of generation. The long-run estimates of electricity costs were based on the belief (widely-held at the time) that oil and gas prices would continue to increase [17]. This led to an escalating schedule of fixed purchase prices, designed to reflect the long-run avoided costs of new electrical generation. By the mid- 1980s, private power producers had installed 1,200 MW of wind capacity in California, much of which is still in service. For two decades these wind turbines have delivered about 1% of the state's electricity.[13] The adoption of PURPA also led to significant amounts of renewable energy generation in states such as Florida, and Maine.

This notwithstanding, PURPA continues to have negative connotations in the U.S. electricity industry. When oil and gas prices plummeted in the late 1980s, the Standard Offer Contracts that were signed to encourage new renewable energy development seemed high by comparison. A divergence emerged between the avoided cost projections and the actual avoided costs. This divergence made the Standard Offer Contracts signed in many states seem expensive by comparison; as a result, PURPA contracts came to be seen as an expensive burden on electricity ratepayers [17]

Another source of opposition to PURPA stems from the fact that it was designed to encourage non-utility generation. This was interpreted as a threat by many large utilities at the time, particularly those operating in monopoly environments. As a result of its encouragement of non-utility generation, PURPA has been interpreted as an important step toward increasing competition in the U.S. electricity industry by some [15].

Developments in Europe

In 1990, Germany adopted its "Stromeinspeisungsgesetz" (StrEG), or its "Law on Feeding Electricity into the Grid" [18] The StrEG required utilities to purchase electricity generated from renewable energy sources at prices that were determined as a percentage of the prevailing retail price of electricity. The percentage offered to solar and wind power was set at 90% of the residential electricity price, while other technologies such as hydro power and biomass sources were offered percentages ranging from 65-80%. A project cap of 5 MW was included [18]

While Germany's StrEG (Feed-in Law) was insufficient to encourage costlier sources of generation such as solar photovoltaics, it proved relatively effective at encouraging lower-cost technologies such as wind power, leading to the deployment of 4 400 MW of new wind capacity between 1991 and 1999, representing approximately one third of the global capacity at the time [5].

An additional challenge that was addressed by Germany’s Feed-in Law was the right to interconnect to the utility’s grid. The StrEG stipulated that renewable electricity producers would be guaranteed grid access [5]. Similar percentage-based feed-in laws were adopted in Spain [19], as well as in Denmark [20] in the 1990s. An overview of all current feed-in tariffs per EU Member state is published on Europe's Energy Portal.[21]

Germany's Renewable Energy Sources Act

Germany's Feed-in Law underwent a major restructuring in the year 2000, being re-framed as the Act on Granting Priority to Renewable Energy Sources ("Erneuerbare Energien Gesetz") [5]. In its new form, it has proved to be the world's most effective policy framework at accelerating the deployment of renewable energy technologies [22].

Germany's new feed-in tariff made a number of important changes to its previous policy: 1) first, the purchase prices were methodologically based on the cost of generation from renewable energy sources. This led to different prices for wind power, solar power, biomass and biogas sources, and geothermal energy, as well as different prices for projects of different sizes, to account for economies of scale; 2) purchase guarantees were extended for a period of 20 years; 3) utilities were now allowed to participate; and finally 4) the rates offered were designed to decline annually based on expected cost reductions, in a mechanism known as "tariff degression" [22].

Since it has been the most successful, the German policy (amended in 2004 and 2008) often provides the benchmark against which other feed-in tariff policies are considered.

Following the German approach, a number of countries have begun adopting feed-in tariff policies. These long-term contracts for electricity are typically offered in a non-discriminatory manner to all producers of electricity generated from renewable energy sources. Because the purchase prices are based on the cost of generation, investors are assured that efficiently operated projects will yield a reasonable rate of return.[6][23]

This principle was explained in Germany's 2000 RES Act:

“The compensation rates…have been determined by means of scientific studies, subject to the proviso that the rates identified should make it possible for an installation – when managed efficiently – to be operated cost-effectively, based on the use of state-of-the-art technology and depending on the renewable energy sources naturally available in a given geographical environment.” [5]

Feed-in tariff policies typically target a rate of return ranging from 5-10%.

Feed-In Tariffs (REFIT) have been associated with a large growth in solar power in Spain, Germany and wind power in Denmark. These countries now boast the supply of 9%, 5% and 20% of their electricity respectively.[24] These systems involve fixed, per-kWh payments that are guaranteed for periods ranging from 10–25 years.[23]

Effects on electricity rates

FITs have been shown to lead to a small annual increase in the price of electricity per customer, as a result of the fact that electricity generated from renewable energy sources is typically more expensive than electricity generated from conventional sources. Cost increases of approximately four Euros per month per household are recorded in Germany [25]. A number of analyses have shown that these price increases, however, can be offset by the price-dampening effect that large amounts of lower cost renewable energy sources (such as wind power) can have on spot market prices. This has led to electricity price reductions in Spain [26], Denmark [20], and Germany [27].

Cost impacts will depend to a significant extent on the overall mix of renewable energy sources encouraged by the policy. Due to the currently higher cost of certain technologies such as solar PV, the deployment of large amounts of these technologies would lead to proportionally larger rate payer impacts. In fact, it has been suggested that technologies such as wind power, due to their growing cost-competitiveness, could lead to electricity price reductions through lower natural gas prices (caused primarily by reductions in natural gas demand) [28].

Feed-in tariffs and grid parity

Some have argued that feed-in tariffs can be used to accelerate the pace at which renewable energy technologies become cost-competitive with electricity provided from the grid, to obtain grid parity. The rapid deployment of renewable energy under feed-in tariffs seen in countries like Germany, Denmark and Spain has undoubtedly contributed to reducing technology costs, and hence, in accelerating this trend. For instance, wind and solar technology costs have decreased dramatically since the 1960s and 1970s , as the technologies have become more widespread, manufacturing processes have improved, innovations have been incorporated, and gains have been harnessed from economies of scale.

While it is true that large scale deployment of renewable energy technologies contributes to advancing toward grid parity, grid parity itself is a moving target, both in time (i.e. during the course of the day and over the course of years) and in space (i.e. geographically). The price of electricity from the grid varies widely from high-cost jurisdictions such as Hawaii and California, to lower-cost jurisdictions such as Wyoming, and Idaho [29]. Similarly, due to their dependence on diesel generators, islands typically have higher electricity costs than on the mainland. In jurisdictions with time-of-use pricing the electricity price changes over the course of the day, rising during high-demand hours (e.g. 11AM - 8 PM) and declining during low-demand hours.

In certain jurisdictions, wind power, landfill gas, and certain forms of biomass generation are already lower-cost (on a per-kWh basis) than electricity provided from the grid. In fact, "grid parity" has already been obtained in certain jurisdictions that continue to use feed-in tariffs (e.g. the generation cost from landfill gas systems in Germany are currently lower than the average electricity spot market price) [30] And in remote areas, electricity from solar photovoltaics can be cheaper than building new distribution lines to connect up to the main transmission grid.

This makes the notion of grid parity elusive.

As a result, some analysts argue that even when grid parity is "reached" that it will be important to retain the non-price provisions offered by FITs, including purchase guarantees, guaranteed grid access, stable long-term contracts, etc.

Policy alternatives and complements to feed-in tariffs

Schemes such as quota-based mechanisms (Renewable Portfolio Standards) and subsidies create limited protected markets for renewable energy. The supply of renewable energy is achieved by obliging suppliers to deliver to consumers a portion of their electricity from renewable energy sources. To do this, they collect green electricity certificates. Hence, a market is created in green electricity certificates which, according to the theory, generates downward pressure on the prices paid to renewable energy developers. This is based on the theory of perfect competition where there is a multiplicity of buyers and sellers in a market where no single buyer or seller has a big enough market share to have a significant influence on prices. Although, in practice, markets are very rarely perfectly competitive, the assumption is still that a relatively competitive market will produce a more efficient use of resources compared to a system where prices are set by analysts.[31]

The fundamental problem with the quota scheme is that there is no long-term certainty. When a quota is set either for a period of time or for a quantity of power, once that goal is reached then there is nothing to keep the green power producers from becoming uneconomic in the face of power produced from coal fired power stations and hence collapsing as businesses. This inevitability with the quota method means that there is reluctance on behalf of investors to get involved in the first place. Those that do get involved are short-term speculators rather than long-term entrepreneurs and so instability is inherent in this system.[32][33][34]

Quota systems favor large, vertically integrated generators and multinational electric utilities, and are more difficult to design and implement than a price system.[1][35][36]

It has been argued that feed-in tariffs are the most effective way to promote the uptake of renewable energy. Only Renewable Tariffs have a consistent record of offering equitable opportunity to all willing participants in the market, offering the freedom to produce and sell the own energy and stimulating rapid rates of growth [1]. It is the most widespread means of promoting renewable energy uptake in Europe.[8]

After a detailed analysis of different policies to encourage renewable energy development, the European Commission has concluded that: "well-adapted feed-in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity." [8]

Net metering

The introduction of FIT is usually preceded by legislation allowing net metering. Net metering only requires one meter, whereas FIT requires two, one to measure consumption, the other to measure generation.

Green certificates

Activists such as Paul Gipe[37] have argued that green certificate schemes disadvantage local ownership, but local green certificates can be employed by government, electric train, electric bus tram and subway operators, municipalities and other users.

Feed-in tariff by territory

Feed-in tariff laws were in place in 46 jurisdictions across the world by 2007.[38] Research for information on feed in tariffs is difficult to find and typically extensive research is required to find it. Information about solar feed in tariffs may be found in a consolidated form, however not all of the countries are listed in this source.[39]

Australia

At May 2009, feed-in laws had been passed in Queensland, South Australia and the Australian Capital Territory (ACT). Limited provisions have also been passed in Victoria. The Tasmanian, New South Wales[40] and Western Australia[41][42] Governments are considering a scheme while the Northern Territory is not currently considering feed-in tariffs.

Queensland

The Solar Bonus Scheme (Feed-In Tariff Scheme) commenced on 1 July 2008. Customers participating in the scheme will be paid 44 cents per kilowatt hour (kWh) for surplus electricity fed into the grid.

South Australia

Electricity (Feed-in Scheme - Residential Solar Systems) Amendment Bill 2007 inserted provisions into the Electricity Act 1996.[citation needed] Applies only to solar PV. Net export payment method (i.e. gross production – household load = net export) limits the incentive provided.

Australian Capital Territory

The Electricity Feed-in (Renewable Energy Premium) Act 2008[43] is now law with a commencement date of 1 March 2009.

The ACT scheme is a "Gross" scheme rather than a "Net" scheme. This means that the provider of grid supplied electricity must pay the small scale renewable producer the new feed-in tariff for every kilowatt-hour (kWh) generated by the solar panels or wind turbine etc., not just the excess electricity fed into the grid.

When the feed-in tariff commences in the ACT, if you enter into an agreement with an electricity network provider for the purchase of your solar generated electricity, by law you are entitled to 3.88 times the transition franchise tariff retail price[44] applying at the time for a period of 20 years. This tariff will apply until the relevant ACT Minister determines the "premium" feed-in tariff to apply in any given financial year (July-June). As of 1 March 2009 this rate has been determined to be about 50c/kWh AUD for systems less than 10 kW and 40c/kWh for systems between 10 kW and 30 kW.[45]

New South Wales

This NSW Solar FiT Taskforce has representatives from the Department of Premier and Cabinet, the Department of Water and Energy, the Department of Environment and Climate Change and NSW Treasury.

The New South Wales Government announced details of the state's feed in tariff scheme on June 23, 2009 [46]: • 7 year program • Pays 60 c/KWh on a gross basis • System eligibility up to 10 kW in size • Commences 1 January 2010 • Reviewed in 2012

The Scheme is a gross feed-in tariff model [47]. A feed-in tariff provides payments for electricity produced by small scale distributed sources like solar photovoltaic (PV) systems when their output is fed back into the electricity grid.

The new Solar Bonus Scheme is the most generous of any State in Australia, apart from the ACT [48].

Western Australia

Some expected key features are that:

  1. System owners will receive the value of up to 60c per kWh for all electricity generated (gross generation).
  2. The feed-in tariff will be paid for sufficient time to pay for the system cost after accounting for capital subsidies, grants and rebates. This is likely to vary between two and nine years.
  3. After system capital costs are recovered, system owners will revert to the Renewable Energy Buyback Scheme.[49]

Canada

Ontario introduced a feed-in tariff in 2006, and revised it in 2009,[50] which in a draft proposal increases from 42¢/kWh to 80.2¢/kWh for micro-scale (≤10 kW) grid-tied photovoltaic projects.[51][52]. Ontario's FIT program also includes a tariff schedule for larger projects up to and including 10MW solar farms at a reduced rate. (See Ontario Power Authority Feed-in Tariff program for renewable energy)

Czech Republic

Czech Republic introduced a feed-in tariff by act of law no. 180/2005 for wide range of renewable sources in 2005.[53] Tariff is guaranted for 15–30 years (depends on source). Supported sources are small hydropower (up to 10 MW), biomass, biogas, wind and photovoltaics. As of 2010 highest tariff is 12.25 CZK/kWh for small photovoltaic.[54]

Germany

Erneuerbare-Energien-Gesetz (EEG) law, first introduced in 2000, today the version of 2009 is in force. Its predecessor was the "Stromeinspeisegesetz". As of May 2008 the cost of the program adds about 1.01€ (USD1.69) to each monthly residential electric bill.[55].The rates vary depending on the size and locations of the systems. The prices for small, 30-kilowatt rooftop installations are 43.01 euro cents per kilowatt hour; 40.92 euro cents for installations with the 30 to 100 kilowatt capacity; 39.58 euro cents for installations with 100 kilowatt to 1 megawatt capacity; and 33 euro cents for rooftop installations with more than 1 megawatt capacity. Ground installations will receive 31.94 euro cents per kilowatt hour.

Iran

سانا (SANA) , first introduced FiT in 2009 for purchasing renwable energy from investors. A price of 130 tomans was set for renewable electricity.

Israel

On June 2, 2008, the Israeli Public Utility Authority approved a feed-in tariff for solar plants. The tariff is limited to a total installation of 50MW during 7 years, whichever is reached first, with a maximum of 15 kWp installation for residential and a maximum of 50kWp for commercial.[56] Bank Hapoalim offered 10 year loans for the installation of solar panels.[57] The National Infrastructures Ministry announced that it would expand the feed-in tariff scheme to include medium-sized solar-power stations ranging from 50 kilowatts to 5 megawatts. The new tariff scheme caused solar company Sunday Solar Energy to announce that it would invest $133 million to install photovoltaic solar arrays on kibbutzim, which are social communities that divide revenues amongst their members.[58]

Republic of Ireland

On 1 May 2006, the Minister for Communications Marine and Natural Resources, Noel Dempsey, T.D., announced the publication of the next market support mechanism for renewables in Ireland to be known as the Renewable Energy Feed In Tariff (REFIT)[59].The 2010 prices per MWh generated are as follows: Large Wind: €66.353, Small Wind €68.681, Hydro €83.814, Landfill €81.486, Biomass €83.814, Ocean Energy (Wave & Tidal) €220, High Efficiency (at least 75%) small CHP (less than 50kWe) from biomass €120, Anaerobic Digestion €120, and Offshore Wind €140.[59][60]

Spain

Current Spanish feed-in legislation is Royal decree 1578/2008 (Real Decreto 1578/2008), for photovoltaic installations, and Royal decree 661/2007 for other renewable technologies injecting electricity to the public grid. Originally under the 661/2007, photovoltaic feed-in tariffs have been recently (Sept 2008) developed under a separate specific law frame due to the rapid growth experienced by this technology since release of the original scheme.

The current Photovoltaic decree 1578/2008 categorizes installations in two main groups with differentiated tariffs:
I) Building Integrated installations; with 34c€/kWh in systems up to 20 kW of nominal power, and for systems above 20 kW with a limit of nominal power of 2MW tariff of 31c€/kWh .
II) Non integrated installations; 32c€/kWh for systems up to 10MW of nominal power.

For other technologies decree 661/2007 sets up:
a) Cogeneration systems; maximum FiT of 13.29c€/kWh during lifetime of system.
b) Solar thermoelectric; 26.94 c€/kWh for the first 25 years.
c) Wind systems; up to 7.32 c€/kWh for the first 20 years.
d) Geothermal, wave, tidal and sea-thermal; 6.89 c€/kWh for the first 20 years.
e) Hydroelectric; 7.8 c€/kWh for the first 25 years.
f) Biomass and biogas; up to 13.06 c€/kWh for the first 15 years.
g) Waste combustion; up to 12.57 c€/kWh for the first 15 years.

Switzerland

Switzerland introduced the so called "Cost-covering remuneration for feed-in to the electricity grid (CRF)"[61] on May 1, 2008. The CRF applies to hydropower (up to 10 megawatts), photovoltaics, wind energy, geothermal energy, biomass and waste material from biomass and will be applicable for a period of between 20 and 25 years, depending on the technology. The implementation is done through the national grid operator SWISSGRID[62].

United Kingdom

In October 2008 the UK Secretary of State for Energy and Climate Change, Ed Miliband, announced that Britain would implement a feed-in tariff by 2010, in addition to its current renewable energy quota scheme (see ROCS). In July 2009, he presented UK's new Feed-in Tariff Programme, expected to begin in early April, 2010.[63] Miliband has given a new name, "clean energy cash back", to this policy which falls fully within the framework of Feed-in Tariffs and is based on a few, extensively discussed, key elements:

a) Less than 10% of Britain's electricity consumption, by 2020[64], will be provided by renewable energy sources. The 2% target requires the "green generation" of only 8 billion kWh (that is 8 TWh) per year. France, thanks to its system of Feed-in Tariffs, in 2008 generated already nearly 6 TWh, and only from wind energy; in the same year Germany generated more than 4 TWh from solar PV (photovoltaic), and reached 40 TWh from wind energy.

b) The project involves only renewables sources which can produce less than 5 MW energy; so, UK's new FiT's project cap is 5 MW. Depending on law, only renewable energy sources and generators within this cap can benefit from tariffs: the government still prefers resorting to the Renewable Obligation Certificates mechanism for developing larger projects.
To prevent companies from moving large scale (for example big wind) projects from the ROCs to the Feed-in Tariff programme, a number of anti-gaming provisions has been inserted in the policy design; this should avoid the breaking up of bigger projects into several small ones, to fit within the 5 MW energy size cap.

c) The contract term is 20 years, 25 years for solar photovoltaic projects: this means that, starting from 2010, British providers of Wind Energy, Hydropower, Energy from Biomass and Anaerobic Digestion falling within the Renewable Sources eligible in accordance with the provisions of the proposed FiT scheme will be rewarded with a tariff rate guaranteed for the next 20 years - 25 years for Solar PV generators. In this way UK's renewable energy industry has a somehow long-term certainty, and can advantage of the FiT over other policy options.

d) Costs for the programme will be borne by all British ratepayers proportionally: all electricity consumers will bear a slight increase in their annual rate, thus allowing electricity utilities to buy renewable energy generated from green sources at above-market rates set by the government.

e) Generators can be green fields (they do not have to be metered customers).

f) The new UK's Feed-in Tariff Programme review is scheduled for 2013.
[63]

The new FiT design "made in the United Kingdom" seems not to be a system of false feed-in tariffs, "in name only"; this sophisticated programme rather distinguishes itself under several points of view, for example:
One new feature is the inclusion of tariffs for Combined Heat & Power (CHP), which only a few other systems provide for.
Another one is the provision of two distinct tariffs, one for small solar photovoltaic installations on new houses and the other for existing homes.[63]

United States

In April, 2009, 11 United States state legislatures were considering adopting an FiT as a complement to their renewable electricity mandates.[52]

"While feed-in tariffs are most closely associated with solar photovoltaic panels, utilities managing the programs in Vermont and Sacramento will also pay a set price for electricity generated from other renewable sources, like wind.

The Sacramento program is open to homeowners who are not participating in another program, called net metering, which allows anyone whose system is producing more electricity than they need to sell the excess back to the utility, thus reducing their electric bill. But once their bill falls to zero, the homeowner gets no more money from the system.

Jon Bertolino, a spokesman for the Sacramento utility, said that customers with land to spare had been asking whether, if they put up small solar farms, the utility would buy the excess electricity.

As long as they are not part of the net-metering program and not seeking the $2.80$1.90- to $2.20-per-watt ratepayer subsidy for their new panels under the state’s “Million Solar Roofs” program, Mr. Bertolino said, small generators can sell their power to S.M.U.D. The rates would depend on the time of day the power is generated, ranging from a low of 5 or 6 cents a kilowatt-hour to 30 cents on a hot summer afternoon; the size of eligible systems is capped at 5 megawatts (and the program overall has a 100-megawatt cap).

The Vermont law caps the size of individual systems at 2.2 megawatts. Solar energy fetches a fixed price of 30 cents a kilowatt-hour, and other forms of renewables fetch lower rates".[65]

California

The California Public Utilities Commission (CPUC) approved a feed-in tariff on 31 January 2008 that is effective immediately.[66]

Florida

Gainesville, Florida, enacted a feed-in tariff in 2009.[52]

Hawaii

In September 2009 the Hawaii Public Utilities Commission issed a decision on a new rate mechanism, which requires Hawaiian Electric Co. (HECO & MECO & HELCO) to pay above-market prices for renewable energy fed into the electric grid.

The decision doesn't set specific rates for the purchase of clean power. The actual rate amounts will be determined by the Commission within the next few months. The new policy will provide a set price and standard 20-year contract for “green” electricity. The PUC's decision sets project size limits of five megawatts (MW) for the island of Oahu and 2.72 MW for Maui and Hawaii island. The Commission's decision caps the total amount of feed-in tariff projects brought onto the electricity grid at 5% of the system peak on Oahu, Maui, and the Big Island for the first two years of the program. Many of Hawaii's clean energy advocates were promoting a more aggressive feed-in tariff—one similar to that enacted in Germany that doesn't have many of the limitations imposed by Hawaii's new policy.The PUC will revisit these and other issues when the initial feed-in tariff is reviewed two years after the program starts.

Maine

In the 2009 Maine Legislature's session, a "Feed-In" Tariff bill, (LD 1450), introduced by Rep. Herbert Adams (D-Portland), was considered. It made it from the House to the Senate, where is was killed May 21.[67] Known as "An Act to Establish the Renewable Energy Resources Program" it was closely modeled on the German law.[68]

Vermont

Vermont adopted feed-in tariffs on May 27, 2009. Generators must possess a capacity of no more than 2.2 MW[69].

The Netherlands

The Netherlands has no FiT, yet. The Dutch Cabinet has agreed on 27 March 2009, to implement some parts of a feed-in tariff during a renegotiation of the government agenda in response to the global financial crisis .[70]. The proposed regulation may adjust the quota incentive system. But in the summer of 2009, The Netherlands have a subsidy system. The subsidy budget has quota for diverse types of energy, at several ten's of million EUR. The budget for wind is hardly used, because the tariffs are too low. The 2009 budget for Wind on Land was 900 MW (incl unused 400 MW from 2008), only 2,5 MW was used. Dutch utilities have no obligation to buy energy from windparks. The tariffs change yearly, to compensate the change in market prices. This creates uncertain investment conditions. The current subsidy system was introduced in 2008. The previous subsidy scheme stopped in 2005 because it became "too expensive". In 2009, dutch windparks are still being built with grants from the old scheme. The old and new subsidy scheme is fed from the general budget.

The most probable change towards the FiT, is that the subsidy budget will be fed with a small increase of the kWh price. The quota remain. End of November 2009 the Dutch Government spoke out that they now finally will also follow the Germans with their FiT to make investments in Sustainable Energy for investors much more interesting. Details will follow shortly after November 2009.

South Africa

"South Africa's National Energy Regulator (NERSA) announced March 31, 2009 the introduction of a system of feed-in tariffs designed to produce 10 TWh of electricity per year by 2013. The feed-in tariffs announced were substantially higher than those in NERSA's original proposal. The tariffs, differentiated by technology, will be paid for a period of 20 years.

NERSA said in its release that the tariffs were based, as in most European countries, on the cost of generation plus a reasonable profit. The tariffs for wind energy and concentrating solar power are among the most attractive worldwide.

The tariff for wind energy, 1.25 ZAR/kWh (€0.104/kWh, $0.14 USD/kWh, $0.17 CAD/kWh) is greater than that offered in Germany (€0.092/kWh) and more than that proposed in Ontario, Canada ($0.135 CAD/kWh).

The tariff for concentrating solar, 2.10 ZAR/kWh (€0.175/kWh), is less than that in Spain (€0.278/kWh), but offers great promise in the bright sunlight of South Africa. NERSA's revised program followed extensive public consultation.

Stefan Gsänger, Secretary General of the World Wind Energy Association said in a release that "South Africa is the first African country to introduce a feed-in tariff for wind energy. Many small and big investors will now be able to contribute to the take-off of the wind industry in the country. Such decentralised investment will enable South Africa to overcome its current energy crisis. It will also help many South African communities to invest in wind farms and generate electricity, new jobs and new income. We are especially pleased as this decision comes shortly after the first North American feed-in law has been proposed by the Government of the Canadian Province of Ontario".[71].

China

"China has set a fixed feed-in tariff for new onshore wind power plants in a move that will help struggling project operators to realise profits. The National Development and Reform Commission (NDRC), the country's economic planning agency, announced at the weekend four categories of onshore wind projects, which according to region will be able to apply for the tariffs. Areas with better wind resources will have lower feed-in tariffs, while those with lower outputs will be able to access more generous tariffs.

The tariffs per kilowatt hour are set at 0.51 yuan (US 0.075, GBP 0.05), 0.54 yuan, 0.58 yuan and 0.61 yuan. These represent a significant premium on the average rate of 0.34 yuan per kilowatt hour paid to coal-fired electricity generators.".[72].

See also

References

  1. ^ a b c Renewable Energy Policy Mechanisms by Paul Gipe(1.3MB)
  2. ^ Environmental and Energy Study Institute home page
  3. ^ Mendonça, M. (2007). Feed-in Tariffs: Accelerating the Deployment of Renewable Energy. London: EarthScan.
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Updated link for reference #2: http://www.eesi.org/061808_Renewable_Energy_Payments

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