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Florida Feed-in

Gainesville, Fla., has recently found itself thrust into the media spotlight due to its adoption of an oddly-named, and somewhat foreign renewable energy policy known as the “feed-in tariff.”

Gainesville Regional Utilities (GRU) is a public municipal utility, owned by the citizens of Gainesville. Like many utilities, private and public alike, GRU has traditionally provided power with a combination of coal- and natural gas-fired generation. In 2002, a resource study indicated that substantial additional generation capacity would soon be needed to meet the city’s projected energy load. Gainesville, a university town, has a very green orientation. The Gainesville City Commission, being sensitive to climate change issues, chose to defer the need for additional generation by pursuing a path of energy load reduction through increased energy efficiency, coupled with adoption of renewable energy for additional capacity needs.

Solar photovoltaic rebates had traditionally been part of the energy efficiency program. In addition to rebates, retail net metering was offered to PV customers in 2008. These incentives were successful by comparison: Although making up 1 percent of the state’s population, Gainesville residents installed 12 percent of the distributed PV in Florida in 2008.

However, GRU felt the solar program was falling short on two key elements. First, rebates were issued to purchase equipment and not energy. Once the equipment was purchased, there was no further incentive for customers to maintain their systems. Second, net-metering provided little incentive for commercial customers to install PV. Since they were paid at the same rate they purchased energy, which is traditionally much lower than residential rates, they were less inclined to invest in PV, although they had the largest rooftops.

In the summer of 2008, the Solar Electric Power Association sponsored a trip to Germany for utility executives, so that they could see firsthand the effect that German renewable energy policies had had on that country. GRU’s representative on that trip returned with accounts of market transformation, innovative design and manufacturing and an explosion of green jobs, all due directly to a policy known as a “feed-in tariff” (FIT). In short, the feed-in tariff allows anyone to become a renewable energy generator, have access to the power grid and guarantees a flat rate-payment for every kilowatt hour of energy they produce.

Upon reflection, it was clear that applying such an approach to Gainesville would have two immediate benefits. Replacing rebates with a performance-based incentive would increase the actual delivery of energy. And there would be a much greater incentive for commercial customers to participate.

The potential of the FIT to spark economic growth, in addition to simply developing renewable energy sources, was not lost on the Gainesville City Commission. Implementing the FIT was seen as a chance to use energy policy to create jobs and establish a flourishing green marketplace. However, in order to meet these objectives, investors needed to be convinced that building PV installations would be a prudent business move. Therefore, an FIT rate was designed to provide a return high enough to be worthy of investment.

In March 2009 the Gainesville FIT program was officially launched with these primary objectives:

  • To transform the GRU capacity-based incentives to performance-based incentives
  • To provide much greater incentive for commercial participation in the solar program
  • To assure a ready supply of renewable energy for the near and far future
  • To create both jobs and a strong, renewable energy marketplace.

In the months since the program’s inception, the FIT has proven successful beyond expectations. Thirty megawatts of solar capacity has been successfully applied for and reserved through 2017. Already, in less than a year, GRU has doubled the amount of solar capacity that had ever been installed in the city. Two solar “farms” designed to produce nearly 2,400 MWh of energy each year are currently in construction and a 2 MW rooftop system will crown Gainesville’s largest shopping center by the end of the year.

As Ray Kroc, the innovative founder of McDonald’s once said: “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it”. The time for renewable energy is now, and Gainesville is proud to have taken the steps towards its success.

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