photo: Chandra Marsono
Now that the legislative dust seems to have settled and the issue of renewable energy tax incentives resolved, at least for the time being, in the United States it might be tempting to overlook the following announcement coming out of Gainesville, Florida, but you shouldn't.
In a plan outlined on Monday, Gainesville has indicated that it is considering adopting feed-in-tariffs for renewable energy along the lines of the program which has enabled Germany to become a world leader in the industry.
If adopted, the plan would be the first of its kind in the nation:Utility Guarantees Price for 20 Years
Under the program Gainesville Regional Utilities will buy all of the electricity produced by solar PV systems at a guaranteed rate per kilowatt-hour for the next 20 years. Current net metering and renewable energy rebate programs will be replaced with this feed-in-tariff.
In touting the program, assistant general manager for GRU strategic planning Ed Regan said "People are putting their pension funds into solar panels, holding companies are investing in renewable energy. These are great investments because there's a guaranteed price backed by German credit; in this case GRU's credit is probably just as good."
The Feed-in-Tariff Advantage
While it may seem to be splitting policy hairs, there really is a substantial difference both in theory and practice between feed-in-tariffs and the more common net metering.
Under a feed-in-tariff the cost of spurring innovation by guaranteeing a certain rate for renewable energy is spread across all utility customers, with all of the electricity produced being feed into the electric grid. In Germany, the cost of the feed-in-tariff program amounts to about a 2% increase to an average families monthly electricity costs.
Cheaper to Run, Symbolically Important
Ultimately this results in the program being able to operate independent of the tax system, cost less to administer than other renewable energy promotion programs, and provide a more stable investment environment. It also important symbolically, as it represents a more significant communal commitment to renewable energy than other promotion programs, which focus on the advantage to the individual first.
A Sign of Things to Come?
Anecdotally it's worth noting that the German program, which extends back into the 1990s, but has really come into its own in the past five years or so, began at the municipal level and was only later adopted nationally. Hopefully this is a sign of things to come in the United States.
More on Gainesville's groundbreaking feed-in-tariff: The Gainesville Sun
Renewable Energy Incentives
Renewable Energy Feed-In-Tariff Legislation Introduced in US Congress
The Sigh of Relief You Just Heard Was From the Earth Itself: US Renewable Energy Tax Incentive Package Signed Into Law
Solar Energy Incentives Approved in San Francisco