At Intersolar this week, I spoke on camera with Craig Lewis who is the Executive Director of the CLEAN coalition, a group that seeks to bring feed-in tariffs (FITs) to utilities across the country. Except the programs aren’t called FITs anymore, instead they are calling them CLEAN programs. CLEAN stands for "clean, local, energy accessible now" and careful thought was put into each word.
Lewis explained the original “rebranding” was conceived by the Rockefeller Brothers Fund who believed that Americans are not comfortable with the word “tariff.” The group found through research that Americans are particularly interested in things that are “clean” and “local” and “accessible.”
For a refresher, a FIT is program in which a developer installs some form of renenwable energy capacity at a location that s/he owns. The utility then agrees to pay a set above-market price to the developer for all of the renewable energy that is produced at that location for a contracted amount of time, usually 20 years. FIT prices are determined through a complicated process that looks at the renewable energy generation resource, traditional electricity rates and other factors to determine what price will spur just the right amount of development in a state or region.
Lewis is extremely excited about the growth of CLEAN programs across the country and outlined where they are already in place and where he expects them to pass in the very near future. It’s many more locations than you might think.
The program particularly targets wholesale distributed generation (WDG) – that is, larger commercial rooftops or apartment buildings. These rooftops are perfect for CLEAN programs, explains Lewis, because net-metering doesn’t always make sense (since there are often multiple tenets). Lewis believes that utilities should be looking at WDG over central station solar power because with it, the utility only needs to worry about distribution upgrades to the grid as opposed to transmission upgrades.
There are still many small policy and regulatory tweaks that need to take place in order for the U.S. to fully embrace CLEAN programs, Lewis explained, however he doesn’t foresee a lot of obstacles. He is fully confident that California will be able to enact a statewide CLEAN program before the end of this year.
The video is long but worth a watch if you’re interested in seeing more FITs…or CLEAN programs, I should say…in America. Check it out below.
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I think it is just downright insulting to suggest that the problem American's have with FITs is the name instead of the concept. Renaming FITs as "CLEAN," a word that is already widely used in discussions of renewable energy, smacks of an attempt to confuse and deceive. Perhaps we should also rebrand Hell as "an exciting place just south of heaven" ....
Lewis also plays fast and loose with facts. For example, he claims most biopower was driven by FITs whereas the largest form of bioenergy is wood--which has been used for millennia. He also claims that 2/3 of wind energy was driven by FITs, but China and the US account for nearly half of all wind power (and most of the recent growth) and neither has an FIT for wind. Surely he is not unaware of these basis facts so why is he saying otherwise?
Later in the discussion he says that the problem with the Spanish solar FIT was not that they set the price too high but merely that they got too much added capacity at the quoted price. This is typical of what happens when government entities set prices--they are perfectly happy (a phrase he uses!) to pay a higher price than they need to because they are paying with other people's money. That is one of the big reasons that Americans are not going to be happy for FITs no matter what you rename them.
Steven
I was starting to worry that the government and the utility companies did not own enough of my property (IE. Easement's)and my money.Instead of endorsing big business again, why don't we make the utility company buy our power at the same rate (Like California)that they charge us. This way we can have home owners install these systems in an affordable way and the utilities will not have to build new plants using coal and other pollutants.If this works, we can have each household register as either Democrat or Republican and add a tax to the income received by each house so that the parties can receive some money. This way the politicians will feel that they are receiving their share.We should probly check to see if Exon needs somemore money while we are doing this. This is another big buisness indorsment.
Comment
4 of 18
Anonymous
July 15, 2011
steve-hoffman asks in comment #3: "why don't we make the utility company buy our power at the same rate (Like California)that they charge us(?)"
While we are at it, why don't we make the grocery store buy the tomatoes and other produce from our gardens at the same rate they sell it? Why should chaos reign in only one field?
The utilities have to maintain the grid and maintain a stable supply. They also only get to charge for the power used not the power generated (i.e., the cost of line losses and power factor complications comes out of their costs). Going forward, it is an entirely unworkable model that the utilities subsidize these costs for solar PV owners. Those unhappy with this have the choice of going off-grid or developing their own local area energy grids.
Steven
To steven in com#2, your suggestion of rebranding "hell" has already taken place long ago. Can you say "ego", or "earth".
But, on the subject of wind support, it has been in the midwest for awhile now. REC payments for wind power have maintained the industries "unadvertised" expansion. What this country really needs expansion of is the "solar carve out" for distributed solar RE Credits. The Ute's have been feeding at this trough for years and hardly need anyones help.
Jennifer, how about a little help for REC expansion programs for public solar crediting through SRECS or FITs for distributed solar use? We need "State Solar carveouts" in respective REPs and high SACP's to advance the private investment in solar.
Then, with this simple move, the solar industry would see an unprecedented expansion nationwide! The Ute's will take care of their own interests, I'm sure. Help the public sector get a well deserved "leg up" for solar adoption on a much more personal and meaningful level.
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6 of 18
Anonymous
July 15, 2011
Phil writes in comment #5: "But, on the subject of wind support, it has been in the midwest for awhile now. "
There is a significant difference between an FIT and a production tax credit; Lewis was claiming that an FIT was the primary spur to 2/3 of all the world's wind power, which simply isn't true. Understanding the differences between subsidy mechanisms and their impact on energy policy would be made much harder if we decide to rename all the terms with confusing language. Lewis and his associates apparently believe Americans are not up to a nuanced discussion on energy policy and that they need to be tricked by rebranding gimmicks. Perhaps such deception will be effective, but I don't think anyone with pure motives would condone such a plan.
Steven
In the '30's we had the Rural Electrification Program to subsidize the grid establishment and get Ute's established nationwide. They were government regulated because of this. Many have since become somewhat unregulated "profit monopolies". Not too democratic.
Now, Today, we could use a similar Electrification Subsidy for a Distributed Solar Adoption Program. Let carbon producers fund the solar expansion through carbon/solar trading credits called SREC's. Those that don't like paying for carbon can buy solar credits or, most preferably, hardware. Even the Ute's can buy in. But the best part, everyone can. Investment in this must be encouraged to see our national way past the energy/environment/credit/congressional complex that is throttling our economy.
A few months back, I saw a list of WI and surrounding REC receivers and large wind power producers were the majority, along with biomass methane and burn-tec, and a little solar. These were not PTC's.
On a larger scale it may be different. I do see that some eastern states have adopted SREC trading boards with success related to the ability to keep the SACP high enuff, otherwise the Ute's just laugh, pay the fine for non-compliance, and burn more coal, et.al. This is regulated by respective PUC's as far as I know. They seem heavily influenced by comercial entities. Here in WI, the PUC board has been re-appointed by Gov. Walker to reflect his anti-RE stance. One Dem on the board has moved to Wash DC. Little hope for a olar carve-out here. I can offer my own SREC's on the Wash DC trading board, but with no buyers, because it is over subscribed and has a pitifully low SACP. It could change, tho. They recently raised the SACP. We'll see.
It would be great to see this program adopted nationally, IMO.
Comment
9 of 18
Anonymous
July 15, 2011
Phil writes in comment #8: "A few months back, I saw a list of WI and surrounding REC receivers and large wind power producers were the majority, along with biomass methane and burn-tec, and a little solar. These were not PTC's. "
Likely true--but SRECs, PTCs, and FITs are all different constructs and we need precise language to discuss them. If Lewis and his cohorts had their way FITs would be renamed "CLEAN" and SRECs, for instance, would then be a "non-CLEAN" mechanism for funding renewable energy. Such a phrase should suggest the type of abuse these rebranding attempts will cause.
Steven
Nice explanation and discussion about CLEAN programs. Craig left out information about two voluntary CLEAN programs or feed-in tariffs (FIT) here in Indiana. Indianapolis Power and Light (IPL) has a program called Rate REP which became effective March 30, 2010. Our second voluntary FIT program was approved 7/13/2011 by the Indiana Utility Regulatory Commission (IURC) for Northern Indiana Public Service Company (NIPSCO). Indiana Distributed Energy Advocates (IDEA) was an intervenor in the NIPSCO program which resulted in a Settlement Agreement with the utility and other parties. Both are voluntary pilot programs. More information can be found about these two programs can at www.indianadg.wordpress.com under the tab. Although the two programs are similar, there are many important differences.
The Indiana General Assembly also passed a Voluntary Clean Energy Portfolio program in Senate Enrolled Act 251. IDEA is now working with the IURC on the rulemaking to implement this new law. We hope to include FITs as a way for utilities to meet their clean energy goals under this new state law.
As Indiana Beach likes to say: 'There's more than corn in Indiana!'
For more information about these Indiana programs and activities, please contact me via email: laura.arnold@indianadg.org
We were fine here in Ganesville, Fl. with the word "tariff". I was involved with the FIT program before and after it's passage as a local solar P.V. installer. By "we" I'm talking about the Gainesville City Commission, Gainesville Regional Utilities, the local solar installers and the general public. Including what I like to call the "solar carpetbaggers" who descended on Gainesville like a swarm of locusts. We all knew what it was and would have gone for it no matter what name it had. Using the word CLEAN is fine by me too. I say call it anything you want, just do it. Showing respect and compromise despite our differences went a long way towards the unity that brought about the FIT's successful passage here in Gainesville.
I agree with many others that whatever the name it has, if nothing is adopted to encourage solar energy implementation, changing the name will only confuse the information stream on the particular idea. A rose is a rose, so to speak, but if it is not yet recognized as such, changing it's name will only make it further from understanding unless it has positive uses across the country, which, IMO, will make it smell sweeter by any name. It is interesting that the Italian programs are moving ahead with great success. The anti-RE government bias in this country is only an indication of entrenched and unmoving value streams feeding backward to the policy makers in their pockets. It would seem that the real connection needed is the will of government to represent the will of the majority of the people, instead of the majority of the money available for themselves. It is sad that so many people have such short memories and such poor ability to separate truth from lies. IMO we need to look at the bigger picture of overall needs, then decide which policies and bills will take us toward that goal or away from it. Now, we need cleaner energy sources by whatever FIT's the solution, not necessarily a catchy name for some arbitrary reason.
Responding to 12 of 12
You have many good points Phil. It took me awhile to figure out what the heck IMO is but I believe through looking at it's use in context that it means "in my opinion". Would this be a crossover from texting? Anyway, you certainly have a penchant for anacronyms. I think the brightest jewel in your recent posting was a fully worded sentence: "It would seem that the real connection needed is the will of government to represent the will of the majority of the people, instead of the majority of the money available for themselves." So true and well said.
I also see no reason to change terminology. There's too much of that going on: the OB whitehouse has even rebranded nuclear as renewable energy and CCS as clean power.
"Lewis and his associates apparently believe Americans are not up to a nuanced discussion on energy policy" ... sadly, that may be true. Americans don't like the word tariff with exceptions such as the tariff on Brazilian fuel ethanol - also a rebranding as the word applies to a fixed fee structure not just tax measures. Certainly, when it comes to thinking about energy, Americans are different from the rest of the world, with residential electricity consumption at more than twice the EU average and energy productivity 30% less than in the EU. In my travels in the southern US, I've been amazed to see new construction with not a lick of insulation or foam board sheathing but plenty of space for the AC unit.
FiTs work, period. The Spanish example shows that they can be surprisingly effective. Ontario has experienced some similar problems but their bureaucratic approval system has been able to contain potential excesses. BTW, I believe the correct quote is "this policy tool is responsible for 45 percent of all wind energy and 75 percent of all solar photovoltaic capacity installed before 2008" which is the conclusion of a NREL study cited by Clean Coalition.
Admittedly, handling generation capacity at the distribution level is a new and challenging requirement. Many LDUs are already hamstrung because, even though they are ultimately responsible for quality of service to the end customer, they are often restricted from owning generating capacity (including storage) in any way. If nothing else, LDG may be the justification for regulations that frees up their ability to manage QoS. For many LDUs in congested areas, LDG is the best solution available. Consider the squawking that happens when they try to put new transformers or bigger poles into an established neighborhood.
Having looked at FIT versus SRECs, I much prefer SRECs as an incentive system for starting up Solar.
FITs only go away if someone takes action to make them go away, And I am sure you are all aware how well we have done at getting rid of subsidizes that are no longer needed (like say oil subsidizes, agricultural subsidizes, etc..)
SRECs on the other hand naturally fade out when you reach the desired goal. The only action needed is to adjust the goal if the goal changes. When you reach the goal, the SRECs will disappear on their own.
As a citizen/peasant, I rather like that if you are going to have an incentive.
I do recognize the financing problem with SRECs but that becomes less of a problem as the SREC markets expand to more states and stabilize the market price across many states. Also, since I believe in distributed roof-top solar; although FITs maybe simpler to understand, they give more control to the state and power companies. SRECs give more power to the solar PV owner, large or small.
I like that also.
CLEAN is just a re-branding and those are not working so well anymore and in fact is actually likely to have more negatives when that re-branding is discovered.
Seems like the above talk on subsidies could perhaps be answered by SREC trading, where the SRECs are based on production of energy to displace burn-tec produced energy and paid by carbon credits paid by burn-tec providers. SRECs can adjust to the market to reflect market demands balanced with carbon production, and, if the SACP is set high enuff and let be, the solar installs roll along speedily at first and as more energy is converted to solar produced, the payment automatically decreases as the cost to carbon producers, which is low at first, is increased. These programs have worked very well in the eastern states that have adopted them, AND have a significant "solar carve out", AND let their SACP fines alone and high enuff. It is the political messing that disrupts a good program, and the SREC trading programs seems very good to me, especially if it was adopted on a national scale. The program in NJ worked well, too well, and became over subscribed and the funds ran out. If they would have learned and set the SACP a little lower, it would be working well. It pays out according to production of watts of power, thermal or electric, and in my view, should not be tied to SRCC and NABCEP installs. If "it" proves production, it should earn subsidy. The difference between this and a tarriff is that SREC trading has pricing set according to carbon payments bought and balanced against solar energy being sold. If I get this right, a tarriff is set (and adjusted) by PUC's or similar Govt. commissions, with political influence. They can never get it right, and ruin, (IMO) the whole basic idea. In SREC trading, the base is determined by the SACP (fine) and let to the market to adjust itself. In this way, early adopters get a higher amount for solar production and cover the higher costs as well as the cost of finance,. Some examples are; in NJ, the SREC price was .65/kw and in MA it was at .50 kw. these have adjusted downward from oversubscription and lowered SACP.
reference the link in post #17,
I could not tell which side of the line that link was on, but I did see a lot of clearly mis-leading documentation on the site.
The prominent parts of the page would indicate the page was anti-solar. With false bits about solar costing more in energy to produce then it generates. NREL a government agency and my own personal research just to be sure in my mind shows that my panels will produce at least 8 times as much energy as they took to produce from mining to on my roof.
The charts with energy system comparisons appear to indicate that O&M (operations and maintenance) on solar will cost 10 times what maintenance on a oil/coal power plant will cost. I find that impossible to believe just from common sense alone.
And it mentioned toxic waste problems that 1. are far smaller problems then even the cleanest coal plant this days and are contained anyway and being reduced because it is good business to have less waste in the process of making the silicone for solar PV.
So if it is anti-solar, it is a load of fiction.
If it is pro-solar then it seriously needs to be fixed to indicate that.
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Jennifer Runyon is managing editor of RenewableEnergyWorld.com and Renewable Energy World North America magazine, coordinating, writing and/or editing columns, ...
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