Policymakers in several states are considering a new tool to boost renewable energy production: feed-in tariffs.
What’s a feed-in tariff? The European Environment Agency defines it this way:
The price per unit of electricity that a utility or supplier has to pay for renewable electricity from private generators. The government regulates the tariff rate.
Indeed, feed-in tariffs are commonly used in Europe to boost renewables, but have been virtually absent in the United States, where renewable portfolio standards and tax incentives are more common inducements.
But some clean-energy advocates have long claimed that the high, fixed-rate payments associated with feed-in tariffs, which help cover the comparatively higher cost of renewables production, are more likely to get the alternative energy industry off the ground.
Last week, the city of Gainesville, Fla., approved what the local paper called the “nation’s first solar feed-in tariff ordinance.”
Gainesville residents with photovoltaic panels on their roofs will get 32 cents a kilowatt-hour when they produce energy. (By contrast, homeowners in Florida last October paid on average 12 cents a kilowatt hour for their electricity, according to Department of Energy statistics.
Other states are investigating feed-in tariffs — including Indiana, Minnesota and Michigan, according to Renewable Energy World.
A bill recently introduced in the Washington state legislature would clear the way for feed-in tariffs modeled on Germany’s.
California’s public utility commission approved a limited feed-in tariff last year and is reported to be looking to expand it. And Oregon’s governor is also reportedly interested in the concept.
By KATE GALBRAITH
