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Gainesville Solar Feed-in Tariff a Done Deal

February 9, 2009 | 11 Comments

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Florida, United States [RenewableEnergyWorld.com] Gainesville Regional Utilities announced that its board of directors, the Gainesville City Commission, gave unanimous approval last week to adopt a solar photovoltaic (PV) feed-in tariff, the first of its kind in the U.S.

"The feed-in tariff is more attractive to solar investors than traditional solar rebate programs because it guarantees that the utility will buy all of the electricity produced by the PV system at a fixed rate for 20 years."

-- Ed Regan, Assistant General Manager - Strategic Planning, GRU

Based on highly successful models in Europe, it offers GRU electric customers a chance to invest in solar photovoltaic (PV) systems and sell all the electricity that they produce directly to GRU.

Pending expected Florida Public Service Commission approval, GRU customers can sign up for the feed-in tariff as of March 1. Participants signing up during the first two years of the program will be guaranteed a fixed rate of US $0.32 per kilowatt-hour of electricity produced for 20 years.

GRU estimates that investors will see a five percent return on investment for large-scale projects. The order from the Gainesville City Commission does however set a total installation cap of 4 megawatts (MW) per year. The entire state currently has approximately 2 MW of capacity installed.

REW.com contributer Paul Gipe is a renewable industry analyst and proponent of what he calls Advanced Renewable Tariffs of which a solar PV tariff is just one part. "Gainesville knew what it wanted and set about doing it. They didn't spend years in endless discussions. Gainesville could well become the model for action elsewhere in the U.S.," he said.

Gipe doesn't see the cap as an obstabcle to PV uptake in any way. "As GRU's Ed Regan explains, the 4 MW is a 'soft cap'. It's a reasonable number for a muni's first foray into a true solar PV feed-in tariff in the U.S. As it is, the 4-MW cap is an order of magnitude greater than the timid limits in Wisconsin. And that's 4 MW per year. The weak Wisconsin tariffs don't compare at all," Gipe said.

Ed Regan, GRU's assistant general manager for strategic planning, visited Germany to study European PV models prior to proposing the Gainesville program.

“The feed-in tariff is more attractive to solar investors than traditional solar rebate programs because it guarantees that the utility will buy all of the electricity produced by the PV system at a fixed rate for 20 years. It offers investors a reliable and predictable source of income," Regan said.

Last week, RenewableEnergyWorld.com reported that a delegation from the European Photovoltaic Industry Association (EPIA) visited Gainesville to support the tariff adoption and to promote the use of solar energy in Florida. EPIA members represent 80 percent of the worldwide PV manufacturing industry.

“Our goal here is to promote the uptake of solar so that the United States, within three years, becomes the largest market of solar on the planet,” said Dr. Murray Cameron, vice president of EPIA. “In the difficult economic times that we are going through now, there are few safer havens for a stable return on investment than solar.”

For more information on the Gainesville feed-in tariff, click the links below.

Solar Energy

11 Reader Comments

Comment
1 of 11

john-broughton-40988

February 9, 2009

Gainesville Regional Utilities is absolutely leading the way to better Advanced Renewable Incentives. Much like SMUD did 10 years ago, this is going to make this region a hotspot for PV systems.
www.nrgmanager.com
jb@nrgmanager.com

Comment
2 of 11

sol-shapiro-138588

February 10, 2009

I believe this approach of feed-in tariffs at these levels is just wrong. Central renewable electric generation makes much more sense because of economy of scale. And if one is to look forward - not to 20% renewables for the nation but 80%, the idea of generation where sun and wind are most efficient (southwest and midwest) and bringing the electricity to where needed makes much more sense. We import oil from unfriendly country 6000 miles away. Why not import electricity from the friendly(?) southwest 2000 miles away. It will be less expensive and will allow us to move to much more renewable energy in a shorter time.

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ann-malone-48191

February 11, 2009

Mr Shapiro, central renewable electric generation makes much more "sense' you say? Guess 'sense' depends on your concern.

Having the "life blood of the economy"---power---inherently socialist is a concern. How sensible is it to stay locked in "inherently monopolistic" (Supreme Court's word for central production with just ONE power line into home) which does not evolve fast enough to meet a changing world? The oil embargo happened over 35 years ago! As we go market with renewable power and heat, we'll get the quick technological evolution we saw with telecommunications. And we'll have a real market (lots of PV dealers) doing the regulating, not the government PUC.

And let's not forget about transmission power losses from central production, the cost of maintaining power lines, the cost of policing power lines... maybe all be tax write-offs due to accelerated depreciation, etc., but still cost in the real world, as is the cost of Demand Side Management. (A homeowner buying a power production system becomes the best demand side manager--for free!)

And what about the military targets, definitely a concern given the existence of unfriendly countries. Central production facilities are military targets. Germany, given its strategic position/history, encourages decentralized energy production, encouraging its citizens to become producers/maintainers rather than simple-minded consumers begging for government regulation. A Feed-In Tariff encourages the homeowner to think of himself as an investor by removing a second layer of uncertainty--the price paid for kW generated--bringing the investment into comfort range for more people. If the sun shines, I know what I make.

I'll admit the really scary thing about decentralization is relying on ordinary people do it. But young people use phones more sophisticated than the computer that sent the man to the moon, so just maybe we could do it....people still learn what they need to learn.

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sol-shapiro-138588

February 11, 2009

Ms. Malone - Happy to continue dialog. I guess my world - based on engineering background looks at numbers and how we can meet our needs. Your world, I would guess is one of "philosophy," assuming that if there are incentives, invention will come along and solve the problems. I agree that this happens sometimes, but if we know how to solve a problem, my take is that we should do it while we look at these inventions.
I'm quite sure that you don't know how to make 80% of our electrical energy with this distributed resource. I do know how to do it with central and storage.
But if the people of Gainesville want to play "feel-good" and subsidize a few people to the tune of up to 3 times or more than the cost of central generation, then do it. I know that I am not in favor of it.
The fear of terrorists taking down my electric grid is a horrible way to sell this subsidy.

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ron-peterson-82973

February 11, 2009

The marginal cost of electricity produced by a peaking gas turbine is $0.05 per KWH. That should be what the solar cell owners should be getting, and if the price of natural gas triples, they should get $0.15 per KWH. Otherwise, someone is going to be paying too much for their electricity.

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mary-saunders-73470

February 11, 2009

It's not just terrorists. It's storms, earthquakes, floods, landslides, car wrecks, rodents, birds, tree roots and branches. A lot of things can take a grid down.

A toned-up, cut person has multiple capillaries to better feed muscles. Consequently, sometimes if an artery goes down, enough blood can get around through the capillaries to save some tissue. Our power system should be a good physical specimen.

Furthermore, all the costs of huge central plants need to get counted going forward, particularly in this messed up financial environment. Are we going to pay for other needs or for huge new coal plants? Do you know any urban people with asthma?

I agree that setting a FIT too high could be a set-up for failure, but setting it where it can float makes the generation-builder bear some risk/benefit possibilities that seem fair.

This way distributes power and everything else so as to undermine greedy-CEO and other syndromes we are paying so dearly for right now.

We've been there and done that with mega-everything. Trying other ways just seems minimally sensible to me. If you can put a plant on a school, you do a bunch of things at one time, which also appeals to me, having had to multi-task while working and caregiving in the past 30 years.

Schools generally are disaster centers anyway, where cots get set up and relief gets given out. So putting generation there is another example of putting it where the people can get to it if things go to Plan B.

If MIT can have its own generation plant, how about Nerdy-Geeky Charter School? Indeed, there already are schools doing micro-grid things.

Obama has said some mutually exclusive things. I prefer to hold him to plans that make sense. Reducing our inventory of too-big-to-fail is one of the better things he has said. He's a politician-still, all things are possible with idle hands and brains and unemployment .

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rick-nuessle-27800

February 11, 2009

This article asserts that this will be the first feed in tarriff in the country- this is COMPLETE NONSENSE

" the Gainesville City Commission, gave unanimous approval last week to adopt a solar photovoltaic (PV) feed-in tariff, the first of its kind in the U.S. "

New Jersey (of all places) has had an SREC program, or feed in tarriff for Solar producers since 2001

see www.njcep.com for more details

Furthermore, they are now paying $ 680/ MWh or $ 0.68 per kWh

So get a clue, kids who are WAAAAAAAAAAAAAAAAY behind the times

I worked in FLA in 92-94 for FSEC and FLA is WAY behind the solar game considering they are the SUNSHINE STATE

and forget the "socialist vs capitalist" nonsense, kids

here are FACTS

Solar is about a 12% IRR for resi and 20% for commericial

compare that with ANY other investment right now

Furthermore , in California, our peak load is 60,000 MW

that is only 60,000,000,000 W or 6,000,000,000 SF or 6 Billion square feet of solar panels , or approx 136,000 ACRES to power ALL of California with just flat plate PV

so Solar (and nukes and hydrogen) CAN RUN EVERYTHING!

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allan-sindelar-20506

March 1, 2009

Mr. Nuessle,
I am in New Mexico, but based on your suggestion I went to www.njcep.com to see New Jersey's feed-in tariff. All I could find, sir, were rebates. They varied from a current level of $1.00/watt up to 50 kW to $1.75/watt for up to 10 kW residential with energy audit. In past years it was as high as $5.50/watt or 70% of installed cost.

There was no mention of a feed-in tariff anywhere. A FIT is a performance-based incentive, based on purchasing measured production on a per-kilowatt-hour basis. New Jersey has rebates, based on a nameplate wattage basis, not on production.

As you sound quite sure of yourself, perhaps you can explain what I'm missing?

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9 of 11

Anonymous

May 12, 2009

Very nice,....always a trickle down effect from California and Florida. We'll take whatever we can get.

Let's keep moving forward and have the Obama administration push feed in tariffs for all states and municipalities.

All the Best
FB

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10 of 11

rfreeh

May 31, 2009

Ron, your "marginal cost" of peak natural gas power @ 5 cent/kwh is way too low. It only includes fuel. Marginal price must, at a minimum, recover all variable costs.

First, you are leaving out variable o&m, which according to California Energy Commission analysis, is nearly 3 cents/kwh (2.6 cent/kwh in 2007$).

Second, solar delivers at or near the point of use, and avoids nearly all transmission, distribution, and power plant parasitic losses.

Third, you apparently assume no cost for carbon over a 20 year feed-in tariff contract; not a good bet.

All variable costs summed up will be closer to 10 cents per kwh rather than 5, and this assumes no escalation in future price of natural gas. Again not a good bet given that low current prices are during the worst economic crisis since the great depression, and are due to deflation and falling energy demand. As you point out, natural gas could be triple what we are paying now.

The entire "marginal cost" concept is invalid in this case, and turns on the idea that we don't need new power plants to meet increasing demand or replace retiring plants. In fact, the fixed and variable cost of building and operating new power plants is "avoidable", particularly in regions (like California & Florida) where peak demand is due to daytime air conditioning use. Then you are looking at 20 to 60 cents/kwh, including both capacity and energy cost. Gainesville's solar tariff--starting at 32 cent/kwh and decreasing 5% per year-- is therefore within the range of its true value.

The Feed-in Tariff program also avoids a series of other expenses: the $4/watt Florida rebate, net metering transaction costs, as well as social and environmental costs from burning natural gas.

Comment
11 of 11

jim-stack-36988

November 5, 2009

I get over 3 times payback using Feed In Transportation. A plugin vehicle like my 05 prius w 10 Kw lithium battery goes about 30-40 miles on a 10 Kw charge . Thta's 80 cents to dipace a gallon of pollution, 65% imported oil derived gas at about $2.60 a gal Nov 5-2009.
I also have a solar GRID tied system that has already paid for itself since I put it in back in 2001 before incentives or net-metering. Now we also have Net-metering at retail rates with a 1 year rollover.
I also own my REC cridits so solar pays off big time !

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