This NREL map shows the states in the United States where feed in tariff legislation has been passed – only 14 states so far

The National Renewable Energy Laboratory (NREL) has released the largest report on feed in tariffs ever produced by a US Government Agency.

The 144 page document, called A Policymaker’s Guide to Feed-in Tariff Policy Design (PDF Download), analyzes the results of Feed in Tariff legislation in over 75 countries, including the efforts so far in the United States.

What is a Feed in Tariff and Why Should I Care?

A Feed in Tariff (FiT) is an alternative to taxpayer-subsidized incentives for renewable energy programs. With a FiT, the government mandates electric utilities to pay a certain above-market rate for electricity generated by net-producers. Meaning, an individual with a good solar location can install solar panels and turn a profit.

There are a number of reasons that a FiT is more effective than cash and tax incentives towards spurring renewable growth:

• The FiT is a performance based incentive – Quality of system design and performance is determined based on a need for return on investment.
• The FiT does not depend on taxes – Since incentives rely on tax money, at some point those coffers will empty and the incentives run out.  A FiT can be financed many ways, usually in the electric market. This takes a burden off of strapped state and federal budgets, and permits renewable growth to scale.
• The FiT offers a predictable return on investment – Solar energy systems offer a predictable rate of production whose value increases as the cost of electricity increases. Given the state of the economy, a renewable investment can be more secure than the stock market!

Key Findings of the Report

The NREL report does a good job of debunking feed in tariff myths, while also critically examining policy challenges faced abroad. Some of their more interesting findings:

• “FITs are responsible for approximately 75% of global PV and 45% of global wind deployment” (5)
• “The arguments in favor of a FIT policy are primarily economic in nature. These include the ability to … stimulate significant and quantifiable growth of local industry and job creation … [and] only cost money if projects actually operate” (27)
• “RE developers benefit from the long-term stability of the revenue streams generated from electricity sales, which helps foster a high level of investment security.” (121)
• “Another benefit is the direct competition for market share that is occurring under FIT policies in countries such as Germany, France, and Spain. This can drive greater private R&D investment, while helping spur further innovation and technological cost reduction” (121)

The report cites a number of primary, secondary, and tertiary benefits (pg. 18-20) for growing the renewable energy with FiT policies, such as:

• Increasing local jobs and developing the economy
• Reducing greenhouse gases
• Displacing load (to phase out coal fired power plants)
• Peak shaving (i.e. reducing the peak load conditions which CMP cites as the reason for the $1.4 billion grid upgrade)

The report then goes on to discuss in great detail the pros and cons of different models of feed in tariffs and the variety of ways they can be made into policy. Variations include payouts based on fixed rate prices vs. premium rates which fluctuate based on the market, to sliding scale rates based on economic conditions and those that vary based on resource quality and location.

You can read this in-depth report for free. (PDF Download)

Will a Feed In Tariff Make it to Maine (and New Hampshire)?

If you’ve been following our blog for a while, you’ve seen our coverage of Maine’s own attempt to establish feed in tariff, which was voted unanimously “Ought Not To Pass” in May, 2009.

A watered down version of the bill, providing for pilot community-owned electricity generation with caps on tariff payouts, was later passed in June 2009. The Midcoast Green Collaborative has a great write-up of the legislation as well as a history of Maine’s slow road towards a feed-in tariff.

For the moment, no concrete, meaningful feed in tariff legislation for Maine homeowners is on the horizon.

Meanwhile, New Hampshire has just passed legislation that will require utilities to pay customers that are net-generators of electricity for their surplus.

The rates to be paid for this electricity are yet to be determined – whether they are truly market rates or a lesser “avoided costs” rate, but should the legislation be successful in spurring renewable energy growth it is possible that true feed in tariff legislation will follow.

We’ll keep you posted as feed in tariff legislation continues to develop in Northeast!

Special thanks to Clean Technica and Renewable Energy World for information about this new NREL report.

More Reading

Learn more about feed-in-tariffs and how other states and countries are using them to move solar energy forward:

• Hawaii feed-in tariff decision to open clean energy market
• Portugal Gives Itself a Clean-Energy Makeover (NY Times)
• Tripling of Solar Jobs in the UK this Year due to FIT?
• Feed-in tariff for alternative energy

The Granite State has already been a solar leader in New England with their generous $6,000 cash rebate for residential solar electric systems up to 5kw as well as an average $1,500 rebate for solar hot water.

Now New Hampshire has taken the next step – mandating utilities to pay the customer for excess electric generation!

Yes, New Hampshire now requires utilities to pay customers when their solar electric system generates more electricity than they use.

The legislation, House Bill (HB) 1353 states that:

the customer-generator may elect to be paid or credited by the electric distribution utility for its excess generation at rates that are equal to the utility’s avoided costs for energy and capacity to provide default service as determined by the commission consistent with the requirements of the Public Utilities Regulatory Policy Act of 1978 (PURPA)

Emphasis Added

Wow!

How Much Will I Be Reimbursed?

In Germany, getting paid for solar electric generation is well-known, the special rate that you receive for excess solar electric generation is called a feed-in tariff.

New Hampshire’s program is a bit different, in that customers will get reimbursed closer to market rates for electricity, rather than a special “feed in” rate (which, in Germany, generates a roughly 8% return on investment for owners of solar systems).

The legislation puts it this way:

Each net energy metering tariff shall be identical, with respect to rates, rate structure, and charges, to the tariff under which a customer-generator would otherwise take default generation supply service from the distribution utility.

While the legislation is still in the process, should the full distribution cost of electricity be included in the reimbursement, that would result in a rate of close to .15c/kwh. We will post a follow-up once we better understand the details of the program!

When Can I Get Started?

The legislation is marked to be effective August 13, 2010.

In the meantime, solar electricity continues to spin your meter backwards and reduce your electric bill to zero so there’s no reason to wait!

Contact us to keep updated as we discover more details about this exciting new program (which hopefully shall inspire neighboring states to follow suit).

A solar power project completed this week in New Hampshire – clean energy is ready to go!

In his first official State of the Union address, President Obama offered a rousing challenge to Congress to get to work on a variety of issues – jobs, security, health care, and the transition to a clean energy economy.

With 2009 behind us, but its challenges far from over, Obama took an approach that was urgent, while at times light-hearted, as he analyzed the country’s problems and his suggestions for implementing change.

We were pleased to see “clean energy” make it into the speech some dozen times, though Obama mentioned “solar panels” only once.

Here’s our take on some of the key points raised during the State of the Union address:

• Obama Lauds Success of Recovery Act
  

  “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. Two hundred thousand work in construction and clean energy”

  Obama put a lot of effort into defending the actions necessary in 2009, both the unpopular bank bailout and the ongoing American Recovery and Reinvestment Act (ARRA), aka the Stimulus.

  While Obama’s focus on clean energy jobs was on the manufacturing side – he mentioned both “the California business that will put a thousand people to work making solar panels” and a need to create “new factories that manufacture clean energy products,” the Stimulus also has had a big positive effect on those who install those panels thanks to financial incentives that were part of ARRA.

• Obama Sees Clean Energy as the Route to Tomorrow
  

  “We can put Americans to work today building the infrastructure of tomorrow … There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products… I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing — even if you doubt the evidence, providing incentives for energy-efficiency and clean energy are the right thing to do for our future -– because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

  Obama seemed very cautious about making the environmental case for a switch to a clean energy economy, instead rooting his argument in the need to create very real clean energy jobs.

  While we couldn’t agree more, and laud Obama for finding common ground, it’s a bit disappointing that the very real crisis facing our planet is still a point of argument.

  The reality is that regardless of the state of the economy, we need to make a move to clean energy now as an act of survival.

  That Obama was cautious to acknowledge this threat points to an even greater challenge of worldview we still have to resolve.

• Getting There – Incentives and Innovations
  

  “We should put more Americans to work building clean energy facilities and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. … Next, we need to encourage American innovation. Last year, we made the largest investment in basic research funding in history, an investment that could lead to the world’s cheapest solar cells or treatment that kills cancer cells but leaves healthy ones untouched.”

  Again, Obama mentions investment in research as a major player in the move to a clean economy. While we agree, the reality is that there are plenty of technologies that are already here which are reliable, affordable, and available.

  Both grid-tied photovoltaics and solar hot water are energy investments that make economic and environmental sense.

  We’re eager to see what Obama plans to offer with “rebates to Americans who make their homes more energy-efficient,” and wish we’d heard something about a feed-in tariff.

• The Economy of Old – Nuclear, Oil, and Gas?
  

  “But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And, yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”

  After so much invigorating news from Obama, it was disappointing to hear his last word on energy mention nonrenewable sources of energy.

  While it may be necessary to find some common ground with Republicans to move the overall initiatives forward, we still disagree that more power plants and “clean” coal are the best way to build the nation’s infrastructure.

Disappointments aside, it’s encouraging to see how large a role clean energy fits into Obama’s plans to move the country back into recovery.

As Obama acknowledged, we have some mighty challenges ahead of us, but the technology is here to move to a clean economy.

What is difficult is mustering the will to act.

Solar electric panels sit a top a home in Portland’s Back Bay area.

The Maine Renewable Energy Sources Act is important legislation designed to stimulate the rapid growth of renewable energy in Maine. Developed by the Midcoast Green Collaborative, the Act closely models Germany’s renowned ‘feed-in tariff’ law, which financially incentivizes home and business owners to install renewable energy-based power generation.

The law will require Maine’s utilities to pay a premium to residential and commercial renewable energy generators for the clean solar power that they produce. The funds to do this come from a small utility rate increase that affects all rate payers.

The price paid to clean electricity generators is locked in by a long term contract between grid operators and qualified generators such that renewable energy generators can expect a return on investment of at least 8% per year.

Germany pioneered the feed-in tariff concept in 1999, embarking the country on an incredible renewable energy growth spurt that has made it the worldwide leader in solar installations. Since implementation, the law has resulted in more than 2,000,000 renewable energy system installations and more than 239,000 new jobs. Grid reliability has also increased as a result, making the country’s incidence of blackouts the lowest in the world.

If passed, the Maine Renewable Energy Sources Act will rouse rapid growth of the state’s renewable energy economy, resulting in thousands of new jobs, reduced reliance on fossil fuel energy and greatly reduced CO2 emissions. Maine relies heavily on natural gas to produce electricity, which is part of the reason that Maine has the highest per capita CO2 emissions of all the New England states.

The Maine Renewable Energy Sources Act is currently being considered by the legislature and needs your support. Please contact your local state Senator and tell them that you want to see The Maine Renewable Energy Resources Program passed for a sustainable future.

People are always asking, Is there really enough sun in Maine for solar to offset my energy needs?

The answer is absolutely yes! Here’s why…

Insolation is the amount of solar energy hitting the earth’s surface and is measured in kW-hr/m2/day. The National Renewable Energy Lab has assembled worldwide insolation data to learn how much sun falls in a particular location so that one can draw a reasonably accurate conclusion as to the amount of solar energy that can be harvested on an annual basis. Below is an insolation map that has been cropped to show the relationship between Maine’s insolation versus eastern Europe’s.

Germany is the world leader when it comes to solar, yet Maine receives more sun!

Maine receives significantly more annual sunshine than Germany, the world leader in solar energy installations, yet is far behind to implement available renewable technology.

Germany has a powerful government incentive program that financially rewards people and businesses who invest in renewable energy. The ‘Feed-in Tariff’ law requires utilities to pay a premium to any home or business that generates clean renewable energy

The great news is that Feed-in Tariff legislation is currently under consideration in Maine. To support this legislation contact your local representative or senator and say that you support the Maine Renewable Energy Sources Act.

Although the US is generally far behind Europe in terms of renewable energy, we are seeing some hopeful signs of momentum building in favor of sustainable energy sources.

Currently, there is a 30% federal tax credit available for solar hot water and solar electric systems. In some states, like California, New Jersey, and Connecticut, there is also a sizable state rebate to help defray the upfront costs of a renewable energy investment. We are hopeful that Maine will be able to jump start its suspended rebate program in the near future with recent stimulus money (UPDATE: A $1000 state rebate is now available for solar hot water, and a $2000 rebate is available for solar power, thanks to Efficiency Maine)