RIP for FITs, or NOT?
Americans don’t have to look very far these days to see the role a Feed-in Tariff can play in jump-starting purchases – and the economic and environmental benefits – of solar electric / photovoltaic (PV) systems. Customers signing onto a FIT invest in their own PV systems to generate their own electricity and sell energy directly to a utility under a contract at a fixed price for 20 or so years. The price is often twice or three times the going local retail rate.
Ontario is going full-guns with its FIT and is witnessing a surge of new business applications. It is even drawing some of America’s talented solar pros north of the border and making some large wholesale purchases of modules in the U.S. harder to come by on a timely basis because they fetch a higher price there. Germany, Spain and most recently Italy have embarked on – but then scaled back – their FITs because of how costly the programs became. Italy’s FIT led to one of the world’s largest concentrating solar power plants by Archimede Solar Energy on the island of Sicily in cooperation with Enel and government agencies.
States such as California. Oregon, Connecticut and Vermont have variations on a FIT, so does Gainesville, Florida, to name a few U.S. examples. But the U.S. Federal Energy Regulatory Commission foreclosed a hoped-for option earlier this summer when it determined the California Feed-in Tariff for combined heat and power was pre-empted by Federal law. The ruling stated that FERC has exclusive jurisdiction to set electricity rates and terms. FERC did say FITs might be allowed under certain circumstances, but not at rates above a utility’s wholesale “avoided cost.” Because that cost is far below FIT prices, it is RIP for FITs in just about every imaginable situation under the sun.
Read more from our friends at Greentech Media. http://www.greentechmedia.com/articles/read/adam-browning-response/.
Image courtesy of FERC.