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First Renewable FIT Introduced in U.S.

By Paul Gipe
September 21, 2007 | 39 Comments

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Lansing, Michigan [RenewableEnergyAccess.com] Patterned after Germany's highly successful Renewable Energy Sources Act, Veteran Michigan Assemblywoman Kathleen Law submitted a bill to the Michigan House of Representatives earlier this week that creates the first comprehensive renewable energy feed-in tariff (FIT) introduced into any U.S. legislature.

The proposed tariffs or payments for solar energy in the Michigan bill are more than 50% greater than the equivalent tariffs in Ontario, currently the highest in North America. Likewise, the proposed tariff for biogas is nearly one-third greater than that in Ontario.

Like the German law which has powered the country to world leadership in wind, solar, and biomass energy—and created nearly one-quarter million new jobs in its booming renewable energy industry—proponents of the bill are hoping the tariff will revive Michigan's flagging economy.

"We are extremely excited that Michigan has joined the ranks of so many progressive states in making the commitment to reduce our carbon footprint," said Subhendu Guha, President of United Solar Ovonic, which is headquartered in Michigan and is a leading manufacturer of thin film solar cells. "Policies like this will create new jobs in Michigan and will help maintain a cleaner environment."

The tariffs proposed in HB 5218 (2007) are equivalent to those in Germany and would be the highest in North America if the bill is made a law.

• Hydro less than 500 kW: $0.10 USD/kWh
• Biogas less than 150 kW: $0.145 USD/kWh
• Geothermal less than 5 MW: $0.19 USD/kWh
• Wind: $0.105 USD/kWh
• Wind energy from small wind turbines: $0.25 USD/kWh
• Rooftop solar less than 30 kW: $0.65 USD/kWh
• Solar façade cladding less than 30 kW: $0.71 USD/kWh

Other legislatures in the U.S. and Canada have considered or are reviewing similar FIT programs. The province of Ontario launched its Standard Offer Program (SOP) in 2006, and a bill for solar energy tariffs was introduced into Hawaii's legislative assembly earlier this year. However, neither are as comprehensive as the FIT proposed by Assemblywoman Law.

While Ontario's SOP is seen as a very important step for FITs in North America, the proposed tariffs for solar energy in the Michigan bill are more than 50% greater than the equivalent tariffs in Ontario. Likewise, the proposed tariff for biogas is nearly one-third greater than that in Ontario. The Michigan proposal also includes tariffs for geothermal energy, a technology not covered by Ontario's SOP.

Renewable tariffs, like those in HB 5218 (2007), encourage homeowners, farmers, and businesses to sell their renewable energy for a profit by allowing them to "feed" their electricity into the grid. Many people call such tariffs "Advanced Renewable Tariffs," because the price paid per kilowatt-hour of electricity differs by technology.

For example, because solar is more expensive than wind on a cost per watt basis, the tariff for solar energy is much higher than that for wind energy so that homeowners can profitably install solar panels on their roofs across the state.

HB 5218 (2007) is also the first bill to propose wind tariffs differentiated by wind resource intensity, as is used in France. These differentiated tariffs limit potentially excessive profit from commercial wind farms at windy sites while allowing profitable development in less windy areas. This is important in a state like Michigan so farmers in the interior of the state can profitably develop their wind resources.

The bill has been referred to the Committee on Energy and Technology. Before becoming law, the bill must pass both the House and Senate and must be signed by Governor Jennifer Granholm who has made renewable energy a key element of her administration.

In the spring of 2007 Governor Granholm traveled to Germany. After returning she was quoted in the Detroit News as saying, "In Germany they created 170,000 jobs by changing the incentives for the use of wind and solar. We ought to be doing the same thing in Michigan."

Editor's note: The HB 5218 provisions document states $0.025/kWh. This is a printing error.

Paul Gipe is a wind industry analyst who has written extensively about wind energy for both the popular and trade press.

Additional Information

HB 5218 (2007)

Bioenergy, Geothermal Energy, Hydropower, Solar Energy, Wind Power

39 Reader Comments

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tony-malone-71691

September 21, 2007

Jim, now I know why you don't use Photovoltaics on your house. Your house is not optimum for it. Mine is south facing and almost treeless. Also, I live in the desert (Mojave), and it makes perfect sense for me. The payback period for my panels is 6 years if electric rates don't increase in the near future. If they do - my payback period is less. That means I have at least 19 years free electricity on my 25 year warranty. I was connected to the grid, but I decided to disconnect. Since then my only blackouts are when I turn the system off to change a receptacle or a switch.

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jim-berry-51310

September 21, 2007

I made a slight oversight.In regards to job opportunities, The industry will continue to grow with gov't subsidies and general ignorance of the public. I fully recommend going into Solar for work. Don't discriminate against Although Wind produces 10 to 50 times more power (annual totals) than solar, it does not seem to have a very large employment footprint. Wind companies are supposedly going full bore right now. They seem to use a lower level of employment.

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peter-morain-71695

September 21, 2007

In response to Jim's attacks, let me first say that the naked economics in your argument make sense. kWh's are kWh's, no matter where the power comes from. Of course, we'd be utter fools to leave it at that. Any form of power generation and/or heavy industry has loads of social costs attached to it - if anyone questions this, I urge them to look at the state of China's environmental degradation (aquifers so polluted that tap water appears as a milky red or green) due to unregulated explosion of industry: http://www.treehugger.com/files/2007/05/chinese_water_pictures.phpThat sensational environmentalism aside, let's talk about the economic effects of a FIT on the solar industry. Solar, in many ways, has the most potential out of all of the current renewable technologies to power our entire world. There are two barriers that make it a pathetic contender in the market at the moment. One is that it is a fringe technology, so the economics of scale and vertical integration haven't really kicked in to knock the price down towards what it should be if it was more widely adopted and manufacted efficiently. Barrier number two is that the technology is in its infancy, even after many decades. There's a reason that VC investment in solar R&D has absolutely exploded in the past few years - new technologies are showing the potential promise of solar to be cost-competitive with the grid with a few more years of development. An FIT will help push that development along so that eventually it won't be necessary. I'm not defending subsidies as a whole - most of the time they screw things up a lot. Corn ethanol subsidies, for example, are pushing a technology that has virtually no future . In the case of solar, it's a necessary evil.

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jim-berry-51310

September 21, 2007

What do I have Against Solar?As I indicated above, its an extremely ineffective tax on the general rate payer to kick money back to a specific unprofitable business and their polictical allies (could be unions or corporate campaign donors).  I am a member of that tax payer group, so the solar people are DEMANDING that I help pay kick backs to them, the solar people.  I have a wife, four kids, 3 cats, 2 rats and a bunny to spend my money on. I don't need to give the solar people handouts/welfare. IF you want a hand out, be honest and hold up a sign along the freeway, don't do it with the lie about solar being soo great.  Most people don't know the extent of how the solar people lie for money. I will always point it out, because they are lying to get my money that I would otherwise spend on my family. As why I don't use PV myself, the peak of my house goes north-south and I have tree lined street that over shadows my home at about 3 pm. I get stuck with $.39 kwh during the Summer.  As for Solar being CHEAPER, that is factually false unless you live away from the electrical grid by a few miles. As proof of this, just read the story written above. Why does solar need $.60 per kwh while wind, and everything else, need a lot less? ANSWER: Solar is more expensive or we are handing out 6x more money than they need. As for the enviroment, solar is not the answer. We can install more renewable energy capacity with Wind, and everything else, with the same amount of money as we can with Solar. I realize economic are not strong for solar people. Let's try to answer this question: Which is better for the enviroment 4 MWh of Wind/Thermal/wave ect or 1 MWh of Solar at the same price?  Since solar people are reading this, I will tell you that if you want to save the eviroment  producing more energy at the same or cheaper price will make adoption quicker.  Higher prices will make adoption slower.As for job opps, I have no advice. I practice law and real estate managment.

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tony-malone-71691

September 21, 2007

Jim, This reply is being written while I listen to Satellite Television, written on a computer hooked up to Satellite Internet all of this powered by Solar Photovoltaics. Not only does it work, it is very inexpensive to operate after the initial expense. After this letter, I'm going to take a shower heated by the sun with water from a well powered by my panels made in the USA. In the over three years I've had Solar Photovoltaics, I have seen no degradation of power from my panels (3.3KW). I'd rather have a 'make-work' program in America than a war of terror funded by my money going to the Middle East,

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pv-sales-in-ca-52346

September 21, 2007

Dear Jim, Not sure exactly why you seem to reject renewables on principle.  I live and work in the solar industry in California.  In this state, as in others that have incentive programs allows homeowners to purchase a system at a significant savings compared to the 30 years of equivalent utility bills.  If it's all about $ and c then why haven't you gone solar?  It's your money(tax money)...why not take some of it back?

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john-carr-65731

September 21, 2007

Jim's pretty close to the mark on this one.It seems the politicians in Michigan do not have their eyes on the real goal... Affordable renewable energy.  Wind is already there.  Comfort does not encourage change.  Adding a "comfort" tax to bring solar, or any other expensive technology into the picture does not help the taxpayer, manufacturer, or end user.  It is an enabling behavior to encourage high cost manufacturing to stay high cost.  If a government or municipality wishes to help the situation, then require a competitive rate of return.  If a community wishes to attract this kind of industry and is willing to invest in it, then provide credit enhancement for companies that have a very good chance at competing.  Credit enhancement does not require a new tax, rather it spreads out the risk for this industry across the community.  That's why the community or government leaders had better understand the plan to get that technology competitive, before their creditors come calling.  Let the banks and financial organizations layout the cash.  Looking at the picture of the manufacturing plant at Solar Ovonics reinforces my comment.  The unit shown is small, and expensive to operate.  Investment should be in opening up the availablity of money to build new units with a scale of operation that is competitive, and not subsidizing an uneconomical process.You think they would get that in Michigan, of all places.

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jim-berry-51310

September 21, 2007

Hey, if solar is such a great thing and cheap and sooo cost effective why does it require 6x the subsidies that wind does?I will point out that this is actually a list of renewable energies that are so costly and expensive that no one with money and common sense would pay for it out of their pocket.  Commonly, the market rate for whole sale power is between $.08 and .$10 per kwh. Anything over that price plus transmission and maintance is what you call a regulatory TAX - paid by everyone or atleast those of us with jobs. Why are they paying $.60 per kwh for Solar and only $.105 for wind?  Its the same power right?  Here is a great idea for saving money. Let's pay $.15 per kwh and see which wins.  The amount of power over 10 years would probably be the same, just no one would waste money on the over price, ineffective solar systems. Everyone would put up windmills because you would be over pay the market rate by 50%. Corporations will have a tough decision to make build a windmill in Texas at $.10 per kwh or the same windmill in Michigan at $.15 per kwh.  For you solar people, the corporations, all of them, would pick Michigan - we know economics are tough. Also the article nearly tells the whole truth about the German's "Highly Sucessful Program" (at wasting money) when it states "In Germany they created 170,000 jobs." In a country with high unemployment, solar has become a jobs program that makes dues paying union jobs.

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john-moran-59062

September 21, 2007

Are the Investor Owned utilities supposed to pay his tariff? Will that drive up the price for electricity? Once someone has recouped the cost of their system, they should only be paid for excess energy exported to the grid (net metering). The systems should be sized to cover usage and not as a small power plant.

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paul-schechter-71211

September 22, 2007

Jim,I think you're wrong to attack solar FIT on the premise that they are 6x higher than wind.  As other posters said, FIT's are used to stimulate the industry. Solar is still in its infancy and has a huge potential that will not be reached without extra incentive.  It's true that first generation solar (mono & poly PV) are rather resource intensive to produce and thus expensive per kWh.  However, thin film is very cheap to manufacture and technology improvements, such as multi-junction and microcrystalline PV, are increasing efficiencies all the time.  Thin film has the potential to reach efficiencies of 20-30% in the lab, and it is only a matter of time before this goes commercial.  These efficiencies would put solar on a par with wind, but only if enough investment is put into the industry.  That investment won't come unless FIT make investment attractive.  Therefore its foolish to not support solar based on current technology, and not look at its future potential.The second point I want to make is that wind cannot be the exclusive answer to our energy problems.  Wind is variable by nature, and as the proportion of wind energy increases in comparison to other sources, the security of supply goes down.  That is, there is a greater chance that not all load will be met (i.e. what if the wind stops blowing).  For every turbine that is put up, a stable form of power (coal, gas, nuke) is required to maintain security of supply.  Therefore wind penetration can never exceed ~35% on a particular grid.  Thus it is essential that other forms of renewable energy are invested in if we want a green future.  Solar is an obvious choice because its the large RE resource in the world.

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tom-elliott-54224

September 22, 2007

FIT's -- "It's the economy, stupid".  Germany has created an economic boom in leading the world in solar and wind.  Yes they want to diversify generation and be more green, but they have also spurred new 21st century industry.Since Michigan's economy is so tied with the less than stellar US auto makers (much of which has gone to non-uniionized south), they want to stimulate industrial development in new technologies.Germans consumers pay for the FIT's in their rates.  US consumers are generally not willing to pay directly for greener energy.Follow the money.

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diane-moss-68731

September 22, 2007

(cont.) Fears of the  general public having to pay a lot more for electricity because of the FIT look pretty much unfounded . According to the evidence  from Germany. people have had to pay about a dollar more  per month for the utility company electricity since the FIT, which is not that big a deal, right? But also what has happened is that there are now  totally  "green"  renewable energy producers that  are charging less for  electricity than the conventional utliities.  People have the option to go with them instead and actually pay less than before for their electricty. This is largely thanks to the FIT, which greatly helped the advancement of renewables.  Finally, while it is tempting to look at the low feed-in tariff for wind and conclude that because it's cheaper at this point, we should dump solar, this is a mistake. Kind of like the old rules about diversifying one's stock portfolio or one's diet, renewables have to be diversified as well, in order to have as strong an electricity system as possible. And if you look deeply into it, and study what has gone down in countries that have been at this for a while, there is nothing to fear. Except sticking with conventional energies, which are loaded with problems of pollution, decreasing resources, climate crisis, water use, etc.I am informed on all this, by the way, because my husband and in-laws are German, and I  have been researching the subject a great deal. I  have met with the architect of the German feed-in tariff and other leaders on the subject. It all seemed very foreign to me before as well.  You might want to check out this site for more info: http://www.eurosolar.de/en/index.php?option=com_content&task=blogsection&id=4&Itemid=12

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diane-moss-68731

September 22, 2007

This comment is directed first to readers who seem to mistake the FIT for a "tax"  and/or "subsidy."  Of course, most of us do not want to pay the government any more taxes! But in fact, the public  pays no tax with the proposed FIT, nor does the government dole out money. It is the utility companies that are simply mandated to pay renewable energy producers for putting energy into the grid, even  small producers.  The result is progress toward a more even the playing field  between renewables and  conventional  energy sources like coal and nuclear.  Why shouldn't little guys like us and farmers get paid by utility companies for putting cleaner energy into the grid as much as the big coal and nuclear plants who get tons of real subsidies from the govt.? Solar having a higher tariff can look unfair or suspicious, but it is only because there is more capital cost currently to install it. There will therefore also be a lot less of it most likely put into the grid than, say, wind for now. This tariff for solar will go down as costs for installing solar go down, which has already happened in Germany where the FIT has been in place since 2000. (cont.)

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ed-brown-7841

September 22, 2007

Jim,Have you thought about the susbsidy the members of your community have paid for your poor judgement?  You built/bought a home (probably a large home) where you can't use solar (or wind?) at your home.  So, the community built a coal/natural gas/nuke power generator to provide you, and others like you, with electricity.  And then you complain about the high rate you must pay for electricity.  Amazing!If you had chosen an appropriate home in an appropriate location, you wouldn't need to pay such high rates and all the money your community spent on a fossil fuel plant could have been invested in a renewable energy source that creates local jobs and helps keep the air clean.  Instead, your community is tied to a very expensive (dollars and polltion) power source to meet the needs of folks like you.If you had chosen an energy efficient passive solar home, you wouln't be paying $.39/kWh for electricity.  If you and others had made better home choice decisions we wouldn't be in the situation we find ourselves.  I bet you have a large and innefficient home.The way I look at it is that you are the one who is getting the big subsidy for your foolish choices.  So, please don't bash the programs that are required to fix the problems created by folks like you.Indigenous people around the world have been building passive solar living spaces for centuries.  It isn't until recently that we decided to build homes like yours that require huge amounts of fossil fuels to heat and cool them. I bet you're one of the real estate developers who has been lobbying for "cheap" power so you can get a premium for the homes in your developments.  Your "cheap" power is now costing us dearly. Your 4 children will pay a much higher price.If you care about your children and their future, stop complaining about the cost of fixing the problem you created.  Pay the bill for your mistakes!  Ed

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xjy-xjy-60570

September 22, 2007

Paul, thanks for a great article introducing the  proposed legislation.  The opponents commenting here are just pushing an unthinking ideologically inspired line that disregards the need for financial encouragement to get new techniques in place, up to speed and working smoothly. Big Government, as these hostile commentators well know, has subsidized Big Oil, Big Coal, and Big Nuke till the taxpayer bleeds from the ears. Oil and coal are more use as raw materials for plastic and nanomaterials than to be burnt away for ever. Nuke fission is the filthiest of them all and the most insidious.Emulating Germany with generous Feed-In Tariffs is a brilliant move. Jumpstarting industry, technological takeup, popular involvement and environmental improvement. Not all Americans in positions of power are as stupid and shortsighted as the administration in Washington. If Michigan gets into the top league competing with CA, TX and WA (say), then not only will the race be fun to watch stateside, but even worldwide once you've caught up with the rest of the world.

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jesse-broehl-9395

September 23, 2007

This bill is nothing but a feel-good subsidy to a perpetually uncompetitive solar industry. It really is absurd the prices being suggested here: Rooftop solar less than 30 kW: $0.65 USD/kWh, Solar façade cladding less than 30 kW: $0.71 USD/kWh, when wind gets (needs) only $0.105 USD/kWh.  Paul Schechter says..."Solar is still in its infancy and has a huge potential that will not be reached without extra incentive."My butt. Solar has had forever to show it can do better than 30 cents a kWh and it's done little to move the bar. And note how this law greatly overshoots what solar actually needs -- especially the separate carve-out for facade cladding. Gee, who does that, perhaps Michigan based UNI-SOLAR, first quote in the story. IT'S A SHAMELESS GIVEAWAY!!! I hope this fails as quickly as it came up. Michigan would do a lot better off to pass an RPS, or ANYTHING more competitive than this bill--and then see what technologies step up. Other states show the way: Wind is by far the cheapest renewable energy source. Michigan should retool its aging, derilict  car factories to churn out turbines and components for the future of industry.

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michael-miller-44813

September 24, 2007

If any of you live in michigan, like I do, you would know that we IMPORT almost all of our raw materials for our electricity.  We send Billions out of state every year.  We have the highest unemployment in the country.  We do not have to look far for an industry that has left us shelling out money for energy to keep our cars running so we can get to work, left us with no formatable mass transit, minimal bike lanes, increased obesity, pollution, and increased sprawl to extremes.  Lets not let the same thing happen at our homes.  We need a drastic solutions that will provide jobs, keep our environment clean which also keeps the tourism market we have left, and provide for a sustainable price for energy. what is the price of coal or uranium going to be in 10, 20 yrs.  we don't know, but we know it is going up.  Renewables are coming down.  If we subsidized them as we had for all the other types of energy, we would probably be using them today.The reason everyone likes to sight cost is because there is no tax for polluting included in the electriciy we are generating from coal, nuclear, nat. gas, etc. No to mention the moutain tops that have been removed to get the coal or all the energy it takes to dig, refine, and transport it to our state. If we could level the playing field this is what it would look like.   I am getting a charge on my electrc bill every month for nuclear decommissioning.  I would love to stick it to them and go off grid.  Now they want to make a comeback.  Well, guess what, they use more water than coal plants.  We have some of the greatest water resources in the world that are being polluted little by little each day we continue on this path.  We need a long term solution.In order to replace our exising dirty supply completely, we need to have energy from every source become fully utilized.  If we do not pay now, we will pay later and it will be a lot more expensive to restore the damage we have done.  As an envrionmental engineer I see what industry has done to our state first hand.An RPS is not effective and does not allow everyone to get involved in the energy game, which until now has not really been an option.  Having the utilities determine the renewables that come on line is like having the drug dealers in charge of the rehab program.  They cannot tell you that they could be replaced completely by renewable energy because no one would invest in them, they could not pay for their inefficient infrastructure, and their business would collapse.   We need to force a transition.  If you included everyone you will end up with cleaner energy that is used wisely. For any energy supply to flourish we need to have price gaurantees.  The coal and nuclear plants have gauranteed customers and they can raise the rates if they need to.  Why not allow long term investment based on econmic incentives that benefit all of us with cleaner energy.I am going to push hard for this legislation, but I bet the power of the utilty lobbist for no good other than to protect dirty powers pocketbook, will put up a hell of a fight on this.  Ask yourself why they are not putting up wind themselves?  It is currently profitable and no fuel costs?  The wind they are getting is owned by others.

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ryan-park-38926

September 24, 2007

Our government has given billions and billions in "hand outs" to the nuclear, coal, and oil industry....  Complaints about a few hundred million dollars for solar that will create jobs, spur innovation, and provide more clean energy seems like an absolute no-brainer by my book.  The sun powers our entire world.... Let's work together and figure it out.  I like this quote by Thomas Edison:  "I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait till oil and coal run out before we tackle that."   ---Thomas Edison, 1931

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roy-bauer-40438

September 24, 2007

 A company called Ag Solutions is also having a hard time. They started up last November now they may be forced to close their doors because Govenor Jenifer Gandholm will not suport any help such as to helping for permits to pipeline from rail car to factory. So all tranport has to be done by road so when fuel prices clime. Which they manufacture biodiesel there prices have to clime also.  

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roy-bauer-40438

September 24, 2007

I live in Upper Michigan. The power company will not buy back any power from wind or solar. I tried to install a windmill from northern hydralics magazine . The power company told me they do not have to buy back the power. That power company being WE energies. Which is from Wisconsin were there they have to buy it back at a rate. But be cause I live in Michigan I can not even hook the system up $5000.00 down the drain it sucks. I only hope that this will change things.

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roy-bauer-40438

September 25, 2007

 Then it is time to mass produce instead of still soddering the conections together by hand. They said it would cost $100,00.00 to make just one cd for music or dvd. Now you can buy them for less than $1.00 . Why is the cost still so high for one solar pannel?

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mortimer-shnerdlyfrump-47009

September 25, 2007

Those that knock solar subsidies aren't looking long term. It's true the industry is non-competitive right now, but in the long haul it's going to save our rear ends.

If every state and federal subsidy for solar were summed for a year, it wouldn't even approach what is wasted in Iraq in one week. We have an energy crisis looming. Every penny (even subsidies) spent on solving the problem today will be greatly appreciated 10 years from now. Every viable technology should be developed. Solar has the best long term prospects.

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michael-miller-44813

September 25, 2007

last time I checked there was more than one solar company...it's called competition.  There is a long way to go to improve efficiency, manufacturing, and scale will come with more use from the implementation of an FIT.  He with the best/cheapest product wins.  I am sure this FIT will be capped or limited in some way the it will not last forever, which is the only way the companies would produce expensive and inefficiently.  This industry has the benefit of using the best technology to start as opposed to the other older industries that have matured over the years.  look how long it took the auto companies to make a car efficiently and now in some plants with no waste.  Give the solar industry a chance. There is also a lot of money in grants, etc. that is available and work is ongoing to improve manufacturing techniques, etc.  you can't have scale without a market? FIT provides a stable price so investments can be made.you forgot, the manufacturers and installers provides people with jobs, which gives people money to keep the economy going.  Whats WRONG with the current system. follow the money and pollution.By your logic, the only ones benefitting from the current syste are the large utililty companies.  No incentives to reduce energy usage, reduce pollution, or change current plan.  Just make profit because there is no other choice for customers that your company.constomers pay for all decisions made by the utility including sending billions of dollars out of MICHIGAN every year, nuclear waste disposal (for about 25000 yrs), energy wasted by centralized power distribution, increased health care costs from pollution, environmental cleanup, destroyed earth/habitats/etc as a result of coal mining, security concerns over large centrized power, lack of maintenance on the existing infrastructure to increase profits, ....So what is wrong with promoting solar again?

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john-carr-65731

September 25, 2007

What's wrong with FIT?  Follow the money.  Utility Customer Pays -->Large Generator (Large investment capital resources)Large Generator Pays -->Small Generator (Limited investment capital resources)Small Generator Borrows-->Small Loans, Personally Secured, New Solar UnitsSmall Personally Secured, Capital Investment-->Retailer/InstallerRetailer/Installer Pays-->Manufacturer.Manufacturer Borrows Capital-->LenderLender Rates Borrower as having clients with small capital assests, and indeterminate credit rating.Lender Caps Capital Based on Recievables--->Manufacturer has to fund expansion with high risk, high interest loans or cash.FIT rewards the small generator, but does little to improve the root cause of high costs in the solar industry: 1.  SCALE OF OPERATION, 2.  RISK-INVESTMENT CAPITAL, 3.  MANUFACTURING TECHNIQUE.We need to remove the barriers for renewables, FIT helps that.  FIT also draws the conversation away from the real issues.  In that regard it is detrimental to the industry.

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john-carr-65731

September 26, 2007

In 25 years the landscape of "cost effective" will change substantially.  Every major oil company, and OPEC is saying, "We are removing oil faster than we can find it."  At the same time, world energy demand is expected to increase 50% in the next 10 years.  The downhill side of the peak oil is precipitous.  However, it's not instant.  There is time, just barely.  FIT is a penney size patch on Hoover Dam.  Nice gesture, not significant.Wake up!  By the time FIT drops the cost of solar, the cost of energy will be so high it won't be needed.  This is not a good thing.  The goal shouldn't be $1/Watt, it has to be 25 cents/Watt to provide energy at the same cost tomorrow, it costs today.  We don't want to strangle our economy over energy costs.  We don't have until 2030 to make it to a paltry 9 percent, neither does Europe.  But, hey, we don't have the manufacturing infrastructure to make to 9 percent by 2060!  We are talking about replacing capacity in terawatts, not megawatts.  This is many orders of magnitude greater than even the most optimistic, or lofty dreamers on this site seem able to discuss.  You can't penney-ante your way there, and we don't have a century to do it.  We have less than 30 years before the cruel truth exposes the kings new clothes. I am not a prophet, or a reader of tea leaves but I can read oil production/exploration/reserve charts (assuming they're being truthful).  Guys, I am for anything that gets this ball rolling.  But we have to ratchet up this conversation.  Depending on your assumptions, the factories alone would cost at least 1 Trillion dollars.  That's right TRILLION.  It's a lot of money, but it's absolutely attainable.  One trillion dollars is 10 percent of our GDP.  Spread out over 15 years, that's less than one percent of our GDP per year.  SDI cost about the same in the 1980's, and was unattainable. It's a huge investment, but it has a ROI that is makes it worth every trillion.In the U.S. we are busy fiddling with our fingernails, and arguing over the color of the ticket, while the train leaves the station.

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bryan-shull-57951

September 26, 2007

For the record.  We did not go to Iraq to get their oil.  We went at the request of the Saudi's to keep Iraqi oil in the ground.  This "supply shortage" has enabled the already super rich masters of the universe to remove additional untold billions of dollars from our wallets.  Remember, gasoline was $1.50 per gallon when W came to town.  I digress.  Mid east oil and solar do not belong in the same sentence, apples and oranges people.Why is the program in Germany so successful?  Everyone can play and win.   Does it reek of socialism, is that what is so scary?  Redistribution of wealth?  We do it everyday here in America too.  In America we take from the poor and the disappearing middle class and give it to the rich. voila. poof. done deal.   Jim is at it again.  Must have gotten a bad sun burn as a child.  We have to level the playing field before we can fairly compare different sources of energy.  Additionally, we must have a solid mix of renewables mixed with aggressive conservation measures to meet our needs.  It is that simple.

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michael-miller-44813

September 26, 2007

Hey, looks like we are going to spend another $50 billion on the war.  At $10 per watt installed, we could have 5,000 MW of solar pu tup and we would not need to be there.  Even Greenspan said that the war was mostly about oil.

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john-nicholson-46055

September 26, 2007

John Moran,What would be best is that renewable energy owner recieves more money even after break even has happen. Why not profit on renewables? Your community my not have but a 1/4 of the houses which face south, so only 1/4 can put solar to good use. So why not produce enough for all homes with homes which do face south? I think you statement is short sighted.   Jim Berry, Solar is more expencive because it has not had the money to do the mass production needed to power all the homes in the world. Until that kind of money is invested then the cost for solar power will continue to be high. The point is Economy of scale for wind has happen, now it is solars turn.By the way, solar and wind are not the same type of power. With wind, it is does not always blow when you are wanting to put a load on the grid.  But with solar it does come closer. So solar has more value, yes 6x more value.

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michael-miller-44813

September 26, 2007

Anyone else paying the NUKE TAX?  We pay the OIL TAX at the pump and directly from our income.  We are lead to believe that we should continue this trend?  Continue lining the pocketbooks of the rich while the poor and middle class sons and daughter line up to die to maintain our lifestyle.  Then when we want to spend a little money on renewable everyone throws up their arms about cost.  Maybe we should say we could save 1000 lives per year instead of using $.  We are stupid if we do not attack our energy security and secure costs with everything we got.  what happed to this country...it is OWNED.

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bernard-sater-47311

September 26, 2007

It is a shame that the list appears to have overlooked solar PV concentrators which have the potential of making PV power cost-competitive with coal-fired power without subsidies.    The technologies needed to make high intensity PV concentrators that are capable of slashing the current high-cost of conventional PV modules by half or more have been developed and proven (<a href="http://www.photovolt.us/" target="_blank">www.photovolt.us</a>).  For example the PhotoVolt silicon vertical multi-junction (VMJ) solar cell has demonstrated output power exceeding 400,000 watts/m2 at 2500X suns intensity.  Such powerful performance will completely alter the economics in solar cell technologies for the better, essentially dropping semiconductor silicon material cost from a couple dollars/watt to a few pennies/watt.  Moreover the silicon needed for 1 MW of conventional modules could make 1000 MW of PV concentrators and eliminate the semiconductor silicon shortage problem.   Bernie SaterPhotoVolt, Inc

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michael-miller-44813

September 26, 2007

Electricity costs are going to rise regardless of this program.  We have to start somewhere.  long term, this will ensure that they do not go out of control.one of the main reason solar is so expensive is that the there is a limited silicon supplies based on demand from other industries.  More silicon production is coming on line which will help bring costs down.  As I stated previously, I am being charged with a nuclear decomissioning fee on my electric bill.  I would much rather be paying for an RE fee which would eventually stop.  the nuke fee will probably last a lot longer.

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harold-hayes-61791

September 26, 2007

Jim B. - Thanks again for your ongoing reality checks.  Personally, I have refused to take generous subsidies just so I can have solar panels on my roof, even though I am a 40+ year solar advocate and enthusiast, and have great sun exposure.  I just don't believe others should pay for my enthusiasm.  On the other hand, I have implemented a number of energy efficiency improvements.John C. B. - Thanks for pointing out that a tax is a tax no matter who administers the money.  You said it much more politely than I could have.To all the off-grid folks (including my friends), I appreciate the choices you've made and I especially respect the choice to stand on your own two feet and pay your own way.To all the people with consensus stories and history lessons to tell, until I see an analyis of subsidies on a per energy unit basis, I'm not buying the idea that solar is cheaper or the same cost as other sources of energy.  (Nor that it's only fair that solar get reimbursed at XX cents per kwh).  I understand the environmental arguments, but as has already been pointed out, Solar is not the most cost effective or efficient way to achieve the desired result.Having said that, solar has clearly come down in price dramatically just in my time and I believe and hope it will continue to do so.  Some day it will be there if needed and if that's 10 years or a 100 years from now that will be fine.  It the meantime, I personally don't believe other people's money should be used to the degree proposed.

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paul-lansing-42491

September 26, 2007

The FIT in Michigan demonstrates vision and support for something the USA, and North America desperately needs, energy independence.  The trillions of dollars spent on a war to secure oil reserves in the middle east, are a far greater burden on your tax dollars and international reputation than any FIT.  For what, a more secure energy supply..., a cammel and a few pounds of plastic explosives will take out a siginificant portion of middle east oil in a heart beat.  The solution to the energy problem of the USA and indeed the world is clean free fuel, the sun.  Photovoltaics are powered by the sun and it is worthy of note that Wind is also a class of solar power.  Jim, you seem to be the loudest voice in this debate, you say you have four children, what do you think the price of oil and gas will be when your children are grown up and on their own.  You can bet it will be more than the solar panels people are buying today.  When you develop solar PV you are securing a fuel supply for the next 40 years and reducing your nations dependence on middle eastern oil by creating an alternative energy source.  How secure will oil and gas be in forty years?  Will North Americans be able to compete for demand with the likes of China and India for what is left of oil reserves?  I have the utmost faith in North American tenacity, and ingenutiy.  We put a man on the moon, we developed the internal combustion engine, and countless other inventions that the entire planet enjoys today.  It is time to move into a new period of invention and toward energy independence, and that includes Photovoltaic solar among other renewable energies.DLG

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josh-kessler-58094

September 26, 2007

While I applaud the State of Michigan for adopting the nation's first feed-in tariff, the rates for solar are ridiculously high!For anyone who thinks that the utility will simply bear the costs out of their pockets, you are sorely mistaken. Utilities are guaranteed a certain rate of return; therefore, any costs will be passed on to customers through higher rates. My advice to Michigan homeowners is to install PV (or other renewable energy) systems. With those rates, the system will pay for itself very quickly, and you won't have to deal with electric rates that could rise considerably in coming years, depending on how much renewable capacity is installed. I also think it's highly likely that the rates will drop substantially in coming years as solar costs fall, the program gains exposure, and ratepayers complain about rising electricity costs.

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paul-lansing-42491

September 26, 2007

The following is a short  recap of the past, present, and future of solar, which must have FIT to ensure  it takes over quickly.  Without it, Jim's 39 cent price wil double in 10 years.  At the Cleantech Forum XII in San Fransico in late Feburary 2007, a survey of venture capitalists and other investors indicated solar power would become the biggest source of clean power by 2020.  Why?The sun supplies enough energy to earth in one hour to supply all of the world's energy needs for an entire year.In 1839, French scientist Edmund Becquerel discovered that certian materials would give off sparks of electricity when exposed to sunlight. This"photoelectric" effect was used in primitive solar cells made of selenium in the late 1800s.In 1931, Thomas Edison had a conversation with Henry Ford and Harvey Firestone.  He said, "I'd put my money on the sun and solar energy.  What a source of power!  I hope we don't habe to wait until oil and coal run out before we tackle that".The first solar cells were used in light meters for photography.  In the 1950s, scientists at Bell Labs revisited the technology, and, using silicon - a semiconductor material - produced solar cells that could convert 4 percent of the energy in daylight directly to electricity.  Within a few years, these panels were powering satellites and spaceships. In the 1970s. a serious effort began to produce cheaper solar power. Experimenting with new materials and production techniques, manufacturers cut costs rapidly through 1999. Currently, the price of PV is dropping 19% every time the installed base doubles.  At 25% compund growth annually, the doubling and 19% price drop is every three years.There is exponential growth in silicon production and cell manufacturing plus new innovations in thin film and conventional photovoltaic production that is increasing the speed at which the installed base doubles and the prices drop.SunPower, a premier manufacturer, states they will reduce the installed cost of solar systems by half over the next five years and will get the price down to $1.00 per watt within 10 years.The U.S. Department of Energy believes the cost of solar will be on par with that of conventional electricty within 10 years.THhis means there will soon be enough PV to match current daily production form all sources.  THe next doubling will allow enough cheap hydrogen production to provide PV sourced electricity round the clock/round the year without any other form of electricity generation needed and, immediately following, all cars and trucks will be powered by PV made hydrogen and no carbon fuel will needed around the world.No other electricity generator is as easy to install and maintain.  Since it is made of silicon, earth's most plentiful material, with no moving parts and drawing power from the everlasting sun, we will never run into problems of scarcity. As prices continue to fall rapidly, solar power will become the significant source of electicity in the 21st century. The cost of the FITs to accelerate this process and make it happen quickly will amount to less than a package of cigarettes per month!

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john-briggs-69597

September 26, 2007

Gentlemen,    I am really torn by this issue.  I want to go solar PV, but the economics are rough. Here is what I am looking at for a quotation.      3.2KW system      $33,000  full system cost     $23,000 cost after government help          $800 per year worth of electricity generated         >25 year payback.        $11 per watt installed system cost without government help.It seems that even with some significant government help, this is not a wise investment for me.  So should I look for even more government help to purchase such a system or invest the money in something else like new windows or a more efficient furnace.    I think what is bothering me is that I know my money (and the government's money) could be better spent.  I wish I could contribute my money to a community windmill in which I could own a share.  I think this would be a better all around investment.   For the gentleman with the six year payback on the solar panels.  Please provide details of the economics.  I have not seen any payback this short.    As for whether FIT is a TAX or not, I think it is a TAX.  In Massachusetts, we pay $0.0025 per KWH into a fund to help with energy conservation.  The money is collected by the power company rather than the goverment, but its usage is controlled by the government.   So, in effect, this is a tax.  In this case, it is so small that I don't think people realize that they are paying it.  But it is effectively a TAX.  I have received some of this money as rebates on light bulbs, refrigerators, and home insulation.  I think the problem here is that I probably would have done those things anyway, so I don't know if the program is working as in tended.  I am particularly worried that it is keeping the price of CFL bulbs high.      Jim.  Thank you for taking the time to voice your opinion.  I think there needs to be a reality check.  ThanksJohn C. Briggs

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douglas-dewitz-58838

September 26, 2007

Are not the billions of dollars spent on the war in Iraq a subsidy to oil?? I'd rather invest in solar.

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sidney-clouston-71854

September 26, 2007

Dear Renewable Energy Fellows: I am in a hotel in Los Angeles after attending today Solar Power 2007 a convention for guess what?  Thats right, Solar.  The incentives in Germany has in the past caused shortages here in the USA because some people were buying all Photovoltaics that they could and shipping to Germany for the demand there.  It is a demand that caused factories to expand production, with tool and dye worker and steel material orders with electronics orders going.  That is taxable revenue for the governments and income for workers who may buy a new car from BMW being that economic stimulation was in Germany.  Here in the USA and Michigan where I will be returning to late tomorrow the same can occur.  So the action now to lower greenhouse gas may have a great economic benefit in the future as well as closer to the present.  Yes Jim some said that the Wright Brothers were nuts about flight.  The net metering means that the monopoly of the utilities are affected, but Baseload power and grid upkeep is still how they can be paid.Best regards,Sid. Clouston

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ibrahimnagy

October 22, 2009

hi i design a closed system which able to generate elictricity without using fuel or known renewable energy pls if you interested feedback
thanks

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