California, United States — The University of California, Berkeley has released the results of a study examining the economic benefits of a comprehensive Feed-In Tariff (FIT). The analysis shows that enacting a robust FIT in California to achieve the state’s 33% Renewables Portfolio Standard (RPS) would create three times the number of jobs, over 2 billion in additional tax revenue, and stimulate tens of billions in new investment. Furthermore, the adoption of a comprehensive FIT will cost-effectively fulfill California’s 33%-by-2020 goal on schedule.
Headed by Dan Kammen of UC Berkeley’s Energy and Resources Group, the analysis examined the economic benefits of a FIT deployed in California to facilitate the state’s effort to achieve the 33% RPS by 2020. A FIT is essentially a fixed price, long-term contract for a utility to buy electricity produced by renewable energy generators.
“This report demonstrates the benefits of using a feed-in tariff as one of the tools to achieve job creation and get our economy back on track in addition to achieving energy independence and reducing our need for fossil fuels. It is a wonderful guide to the kind of policies that will get us to a more prosperous and sustainable energy economy. I am grateful to Dan Kammen, Max Wei, and their colleagues for continuing to produce the kind of solid analysis we need to make better policy decisions,” said California State Senator Fran Pavley (D-Agoura Hills).
The Berkeley study specifically examined a FIT that would be available to solar projects up to 20 megawatts (MW) in size. Professor Kammen and his colleague Max Wei studied the impact of such a FIT on employment, tax revenue, and investment compared to current RPS scenarios being modeled by California regulatory agencies.
“The conclusions confirm the FIT Coalition’s unvarying position that FITs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits wherever FITs are designed to achieve scale. This study will open many policymakers’ minds to the unparalleled benefits of FITs and their ability to unleash the wholesale distributed generation market segment,” said Craig Lewis, executive director of the FIT Coalition.
The study’s key findings include that three times the number of jobs will be created if a FIT is enacted to complement the RPS. This translates into roughly 280,000 more jobs over the next decade, or an average of 28,000 jobs per year, with more jobs created in the early years because wholesale distributed generation (WDG) projects can come online quickly.
Another key finding includes over $2 billion in additional tax revenue for the state. Further, the study found that a comprehensive FIT would stimulate up to $50 billion in new private investment in the state with the potential for those renewable energy projects to be eligible for another $15 billion in federal tax benefits.
Click here to see details on the study’s methodology, an accompanying summary or the entire report.