House Democrats Introduce National Feed-in Tariff for Renewable Energy Projects
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
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.
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.
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.
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.