Solar Advocates Rally Around Feed-in Tariffs

Four years ago, a friend and colleague based in the UK named Miguel Mendonca wrote a wonderfully comprehensive book on Feed-in Tariffs. At that time, the conversation around FITs in the U.S. was pretty much limited to the hardcore enthusiasts.

That has changed dramatically -- and a new handbook on FITs had to be written. FITs are now part of the general policy discourse in the U.S. The success (and flops) of European countries that have implemented FITs – as well as the overnight emergence of the Canadian province of Ontario – has spawned a keen interest in how to effectively deploy the mechanism on the state level in America.

For anyone who hasn't yet heard of the policy, a FIT is an above-market payment for every kilowatt-hour of renewable electricity fed into the grid. The payments are usually guaranteed for between 10 and 20 years. Ideally, they are paid by utilities and funded by ratepayers. For an example of the “ideal” FIT, see the German example.

A number of states and municipalities have implemented or are actively considering FITs. Of course, the quota system (renewable portfolio standard) still reigns here in the U.S., but FITs are gaining some traction as a compliment to existing programs. The success of the policy will ultimately depend on the regulatory and political make-up of each state.

There are plenty of FIT detractors in the U.S. as well. Some people in the renewable energy community worry that FITs are inflexible and don't respond to market conditions fast enough. They also point to countries such as Spain and Italy (and some are worried about the province of Ontario) as examples of FITs creating short-term overheated “programs,” and not long-term sustainable markets.

While there is certainly still a split in the solar community, it's clear that there's a growing consensus on the value of FITs in the U.S. I sat down with three solar advocates representing different regions of the country and spoke to them about why they believe FITs are the policy of choice for growing the American solar industry.

The guests include: Sue Kateley, executive director of the California Solar Energy Industries Association; Lyle Rawlings, executive director of the Mid-Atlantic Solar Energy Industries Association; and Janet Gagnon, a board member of the New York Solar Energy Industries Association.

What do you think about FITs?