Time for US to adopt FITs "long overdue"

The consensus among both state and regional solar industry associations from across the country was that "the time for FITs to be widely adopted is long overdue".

"The time is right to accelerate the use of renewable energy in the U.S.," stated Gary Gerber, president of the California Solar Energy Industries Association (CalSEIA). "President Obama called for determined action to end reliance on fossil fuels. States can take action now. States can grow local renewable industry businesses and create local jobs. Feed-in tariffs are simple, easy to use, stable, and effectively drive the costs of renewables down quickly."

The associations argue that FITs are in place in approximately 64 jurisdictions throughout the world, and have been responsible for the creation of the largest and fastest-growing solar markets, like Germany and Italy. They cite recent research by the European Commission in their bid to get the U.S. to change its system: "Well-adapted feed-in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity."

They also use Mark Fulton, managing director, of Global Head of Climate Change Investment Research for DB Climate Change Advisors, comments that "there is strong evidence that advanced feed-in tariff programs that exhibit Transparency, Longevity and Certainty (TLC) can clearly reduce project risk, allow renewable energy developers to obtain a lower cost of capital, and create new jobs".

In August 2009, the California Legislature overwhelmingly approved SB 32, which authorized the California Public Utilities Commission to implement a statewide FIT for projects less than three megawatts, with a total program cap of 750 megawatts. According to Sue Kateley, executive director of CalSEIA: "The design of the program will encourage local projects at residential, commercial, and municipal sites. This will create construction jobs for solar companies throughout California. Several other U.S. states are developing FIT programs."

"Oregon launched its version of the FIT on July 1, and the initial allocation was fully subscribed in less than 15 minutes," claimed Glenn Montgomery, executive director of OSEIA (Oregon). "The demand is clearly present."

Experience with FITs has been contrasted with incentive systems based on tradable market commodities. "Reports by such entities as Ernst & Young, the International Energy Agency, and our own National Renewable Energy Agency have indicated that FITs have been more successful than incentives based on tradable market commodities at achieving renewable energy goals in Europe. Furthermore, they have done so at a lower cost," said Lyle Rawlings, president of MSEIA (New Jersey, Pennsylvania, and Delaware).

"In New Jersey, the second-largest solar market in the U.S., a tradable market commodity system of incentives was adopted that has driven up the cost of solar power to more than double the cost that a FIT would produce, while falling about 50 percent short of the legislated goals for solar."

Kateley concluded: "If Feed-in tariffs can be adopted widely in the U.S., we have the opportunity to re-take the lead in the world in transforming energy markets to clean, renewable energy."

States represented at the meeting include: Arizona, California, Colorado, Florida, Hawaii, Maryland-DC, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas and Virginia.

Read pv magazine’s latest opinion piece by VP of marketing for groSolar, Gaelan Brown, who discusses at length why the U.S. needs to adopt FITs.