Reinforcing the wisdom that feed-in tariffs are the best, most cost-competitive way of deploying renewable energy: Wind-works highlights a new report from the IPCC working group on renewable energy, specifically Chapter 11, Policy, Financing and Implementation.
Though certainly not all places that have adopted feed-in tariffs are renewable energy success stories, or haven't had to tweak the terms of their programs, by and large FITs "have been effective and efficient at promoting [renewable energy] electricity, mainly due to the combination of long-term fixed price or premium payments, network connections, and guaranteed purchase of all [renewable energy] electricity generated."
Policies that have been most effective have included most or all of the following:
- Utility purchase obligation;
- Priority access and dispatch;
- Tariffs based on cost of generation and differentiated by technology type and project size, with carefully calculated starting values;
- Regular long-term design evaluations and short-term payment level adjustments, with incremental adjustments built into law in order to reflect changes in technologies and the marketplace, to encourage innovation and technological change, and to control costs;
- Tariffs for all potential generators, including utilities;
- Tariffs guaranteed for a long enough time period to ensure adequate rate of return;
- Integration of costs into the rate base and share equally across country or region;
- Clear connection standards and procedures to allocate costs for transmission and distribution;
- Streamlined administrative and application processes;
- Attention to preferred exempted groups, for example, major uses on competitiveness grounds or low-income and other vulnerable customers.