U.S. Representatives Jay Inslee (D-WA), Bill Delahunt (D-MA), Jim McDermott (D-WA), and Mike Honda (D-CA) introduced landmark legislation [PDF] on Thursday that will provide security for investments in the renewable-energy sector by guaranteeing rates for renewable-energy generation.
This policy mechanism, also known as a national feed-in tariff, may be the single most effective tool to expand renewable energy development that we know of. Feed-in tariffs have been introduced in several U.S. states, but none have the bills have been passed into law.
The International Energy Agency, the European Commission and the United Kingdom’s Stern Review have determined that feed-in tariff policies in Germany, Spain, France and other European Union countries have achieved larger renewable energy deployment at lower costs, compared with policies in other European Union countries.
The legislation has two principle titles. The first would streamline interconnection standards and the patchwork of policies currently governing interconnection. The second title addresses the actual process of setting of renewable energy tariffs, and what would qualify. This bill would not only apply to the mom and pop backyard wind turbines, and rooftop solar – the tariff extends to projects as large as 20 megawatts!
As it is currently written, the tariff would be revisited no later than one year after it is enacted and every two years thereafter, thus incorporating a ratcheting mechanism that allows the rate-setters to adjust for technological advances, bottlenecks in supply chains, changes in demand, and other unforeseen stimuli that might necessitate a rate revision.
According to a statement released by the bill’s co-sponsors:
“Enacting a federal renewable-energy payments policy would streamline what could become a patchwork regulatory structure and an unstable investment climate for the U.S. domestic renewable energy market. It also would complement incentives for renewable-energy deployment, such as existing federal-tax credits as well as proposed plans to cap carbon emissions and set federal renewable-electricity requirements, among others.”
Rep. Jay Inslee:
“With hundreds of billions of dollars in capital slated for investment in the clean-energy sector in coming decades, we’d be fools if we didn’t ensure American manufacturers would be on the receiving end of this rapidly growing market.”
Rep. Bill Delahunt:
“It is time for the United States to take a leadership role in the new ‘clean energy’ economy. By giving our own consumers access to proven financial incentives and boosting demand for clean energy technology we can position the United States to become a world leader in this emerging sector of the global economy that has the potential to create thousands of new ‘green-collar’ jobs here at home.
Other Posts About Feed-in Tariffs
Illinois: Renewable Energy Feed-in Tariff Introduced in House of Representatives
Germans Debate Renewable Energy Price Supports
Feed-in Tariffs: The Quick and Dirty
Photo: Thomas Roche via Flickr under a Creative Commons License
About Timothy B. Hurst
I have a question – have the European feed in tariffs reduced the continent's consumption of coal, oil and natural gas? Stated another way, after years of investment, has there been a reduction in the quantity of CO2 entering the atmosphere from the countries that have enacted this kind of support for the renewable energy industry?
Rod-
Re: Has there been a reduction in the quantity of CO2 entering the atmosphere from the countries that have enacted this kind of support for the renewable energy industry?
A cursory search turned up this from Oak Ridge National Laboratory:
"Fossil-fuel emissions of CO2 from unified Germany have declined 17.6% since 1990 to 221 million metric tons of carbon in 2004. The 2004 per capita emission estimate of 2.67 metric tons of carbon is comparable to mid 1950s levels. Although the largest fraction of emissions (41.4%) is from burning of solid fuels, the use of coal has been in general decline since 1950, at which time 97.3% of the total emissions were from coal burning."
According to the EIA, Germany produced 844.2 million metric tons from burning fossil fuels into the atmosphere in 2005. This number is roughly equivalent (844 mm tons) to 2002 emissions. Granted, this is for the burning of all fossil fuels, so it does not fully address your question.
But I'm going to keep digging.
What Rod is alluding to, is the money spent isn't worth it, therefore why bother. As populations grow, consumerism increases, we simply need more power. For successful projects, look at southern Spain and places like Greece where there are no hot water boilers. In American terms, house building codes force builders to use solar devices to heat domestic water.
A very large number of properties here in the US could have these and save energy. Why isn't it the code here? Here in FL, building standards are pathetic. There's almost nothing built that is designed for the local environment, or built to reduce energy consumption.
People with double-glazing is almost 0%. Houses with white roofs is 0%. The only solar you see it heating the pools, which in turn means having to run the pump longer to try and keep on top of the algae. AC ducts are in the attic, the hottest place in a FL home.
What we need is a common sense approach to where we each live. FL builders are a disgrace, the county and city codes are pathetic. We can save a lot local with a few simple changes. Other states will have their own solutions to the reduction of energy. But being the US, we will do nothing. Because we're sticking it to the man and won't be told what to do. Far better to kill civilians in another country and pretend "we're #1!".
@Rod: Even if one does count everything via CO2 emissions you should be aware of the independent UN study which have concluded that in dozen years from now group of developing countries: China, India, Russia, Mexico and Brazil will contribute about 75% of total worldwide CO2 emissions… While the "evil polluters" of EU and USA would come shy of 20% (about 17% with EU donating 7% and USA 10%). So, there is the list of countries where the difference can be made. I just don't see any eco-nuts doing anything vs. those sources. Wake up and realize that even if everything in the USA and EU stops and everyone falls dead, CO2 emissions worldwide won't feel a dent…
great to see the Dems pushing this forward
I always say: look around, see what works and adopt it
Paul-
I couldn’t agree more with your concerns about building standards – they are indeed atrocious. What we need is some linkage between the people who build the house and the people who end up owning it a few years later. We are throwing good money after bad in far too many residential buildings.
And I also agree that solar might be best for solar thermal applications, as opposed to solar PV.
However, I still don’t get your comment that “the money spent isn’t worth it.” How so? Can you quantify that for me?
for 100s of videos about feed-in-tariffs and other renewables news, visit the Etopia News web site at:
http://www.etopianews.com
Who is the target of this bill? 20 MW is a fairly paltry amount of power – maybe enough for a town of 10k people. And the clause that lets congress alter the guaranteed rate every couple of years seems to make the whole law pointless. Why would I sink a lot of money into a power plant that is profitable only above market prices if I know Congress can renege in just a few years?
great to see the Dems pushing this forward
I always say: look around, see what works and adopt it
Jacob-
I don’t know if I would consider 20 MW paltry. But even if I did, I don’t think I would consider 100 20 MW installations “paltry”, would you?
And to your second point, it’s my understanding that the tariff rate would only be adjusted to maintain the proper level of revenue for the power provider, not to take it away or chop it in half.
re. the price adjustments; to be clear whoever interconnects will get the guaranteed rate for a long (20 yr period of time) thus creating investment certainty thus allowing the majority of the cost to be debt financed by lenders (like buying a house); this minimises the equity investment upfront so makes the policy accessible to many more households who otherwise can not afford to be a renewable producer; as renewable technologies costs fall, new producers will require lower rates to be profitable as the upfront costs have fallen – but they will still get a fixed 20 yrs rate once they interconnect – its called a degression model and has worked widely in Europe with each year or 2 renewable prices for new producers falling by 5-9%.
I believe with the passage of a National Feed-in-Tariff (FIT) bill, we will launch the “Solar Revolution” to combat climate change in order to create a sustainable future.
FIT will break the monopolistic strangle hold by the utilities and will create a distributed and on-site power generation network.
We are transitioning from the Industrial Revolution built on oil and coal to the Information Internet Revolution that will be powered with solar and other renewable energy.
Just as Marco Polo opened the “Silk Road” to China to promote trade and commerce, we will open the “Silicon Superhighway” to conduct e-commerce, e-learning, e-medicine, telecommuting, and telecommuting to the global digital villages.
We must encourage our U.S. Congressional leaders to push for the adoption of this bill.
@ Timothy:
Your answer matches with what I think is true. Germany’s emissions fell rather impressively when judged over a period from 1990 – 2005, but have barely budged over a period from 2002 – 2005.
It takes a bit of digging to understand why. What is now called Germany used to be two separate countries called East and West Germany, respectively. East Germany was one of the Soviet bloc’s more industrial countries, but its source of power was mainly lignite – brown coal – burned in huge power plants to supply mainly state run factories.
The goods that those factories were not useful or competitive in the West, so after the Berlin Wall fell in 1989 and the two sections of Germany were reunited, many of the factories shut down and the power plants supplying them no longer had any customers. Germany as it currently exists gets the emissions credits that occurred as a result of those factory shut downs.
Before we get too excited about feed in tariffs, I think we need to take a good hard look at Germany’s current power plans. We also need hard nosed, honest evaluation of the actual effects of the tariffs using the most up to date information possible.
Rod-
Thanks for the history lesson, but I'm not as young as you might think
You're absolutely right about East Germany's lignite legacy and outdated/inefficient industrial sectors. But I think it would be incorrect to attribute all of their carbon reductions to reunification just as it would be incorrect to attribute them all to their RE feed-in laws.
and how does this tie into the new law putting a moratorium on all new solar projects built on public land for the next two years? the purpose of the moratorium is to study the environmental impact of these solar installations while at the same time bush is pushing for oil and gas drilling in national parks.
What is the proposed feed in tariff per kWh in the proposed bill?
The feed in tariff could be a good mechanism to build solar if the numbers work.
Rod-
Yes, more data is always good.
The German feed-in has built German solar into a powerhouse, that probably would struggle without price supports – especially with the growth of a few large solar PV companies in China.
And yes, the amount paid now by the average elec. consumer is relatively low, but at current rates, will probably rise.
Howard-
I'm actually not sure if they set the actual tariff rates in the bill, though I could be mistaken. I did read through it once (rather quickly) and didn't see any specific mention of rates.
Tim:
Yeah, I guess we are both a couple of grumpy old men – at least I am.
I am quite willing to try digging a little deeper into this issue as long as we agree to be governed by real numbers and not wishful thinking. As you clearly pointed out, German emissions over the period of 2002-2005 were essentially flat, and that was a period of time when the effect of reunification was essentially over, but the feed in tariffs were ostensibly going well. Of course, there is the possibility that some of the projects had not yet started producing, so let’s see if we can find more recent data points.
My current understanding is that the tariffs have done a great job at creating an industry where there was not one before, but I am not so sure that the industry is sustainable without the support or that the emissions benefits are what some might wish they were.
Many people who write about this program talk about how little it costs the average consumer, but that is only because the amount of power actually produced at the elevated tariff rate is quite small in comparison to the total amount of power consumed. If there were more power being produced (and more emissions being avoided) the cost would be far higher on a per customer basis.
The first step should be lifting the 2 year ban on solar projects the BLM just announced. They were already blocking 130 major solar projects and now refuse to even look at any solar projects for 2 years! The BLM is pushing coal & nuke projects so hard it sure looks to me like they've been bribed.
The second step should be to abolish all subsidies for coal, oil and nuke power. I mean no more $1 leases for coal mining on federal land, no more wars for oil and no more taxpayer funded nuclear waste repositories or clean-ups.
Ugly:
The nuclear power industry has paid the full cost of the Yucca Mountain fiasco with a 0.1 cent per kilowatt-hour fee. That fee has generated between $500-800 million per year since it was first imposed in 1982.
The fund currently contains a surplus of close to $20 Billion dollars in IOU's.
In addition, the only nuclear waste clean ups that have been federally funded were on federally owned sites, not privately owned commercial sites. For those, there is a legal requirement to put away a special fund to pay for plant decommissioning.
In a long run this will be win-win situation. By putting more solar panel, we need less oil, we emit less green house gas. Sooner or latter United nation will come with regulation which force USA to adopt other alternative energy solution to limit the green house gas emission. Afterall we are the highest consuming nation and that is not fair to rest of the world.