New 144-page FIT guide published by U.S. government

The guide, ‘A policymaker’s guide to feed-in tariff policy design’, comes at a time when there have been numerous calls made by the photovoltaics (PV) industry for the U.S. to adopt a feed-in tariff program, instead of power purchase agreements (PPAs), which are widely used by the country.

Brad Meikle, senior analyst and managing director of Renewable Analytics, told pv magazine that the current PPA model is “terribly inefficient”, having hindered the country’s growth until now. He said that he is optimistic about the future, however. He said: “The one big difference between the U.S. and Germany is that most of the power produced in Germany based on the FITs is sold at 30 – 35 Euro cents per watt peak. In the U.S., it’s 15 USD cents – there is a 30 percent investment tax credit which factors into that – but the price at which people are selling power in the U.S. is much, much less than Europe. Despite that, there’s still significant demand for it.” He added: “We believe that as a result of the Gulf Oil spill there will be significant efforts for creating incentives for solar.”

Additionally, just last month the U.S.’s solar associations said that the time for the country to adopt FITs was “long overdue”. A day later, it was announced that the country’s first national renewable energy jobs and security bill based on German FIT system was introduced to congress. pv magazine’s last opinion piece by Gaelan Brown, VP of marketing for groSolar, also stated that the U.S. needs to know that the best policy to create real cost-effective and fast deployment of renewable energy is a FIT.

The guide

The NREL guide states that FITS “are the most widely used policy in the world for accelerating renewable energy (RE) deployment”, and outlines the reasons as to why the incentive system should be adopted. It also provides a detailed analysis of FIT policy design and implementation, and identifies a set of best practices that have been "effective at quickly stimulating the deployment of large amounts of RE generation".

It explains: “In the European Union (EU), FIT policies have led to the deployment of more than 15,000 megawatts (MW) of solar PV power and more than 55,000 MW of wind power between 2000 and the end of 2009 (EPIA 2010, GWEC 2010). In total, FITs are responsible for approximately 75 percent of global PV and 45 percent of global wind deployment (Deutsche Bank 2010). Countries such as Germany, in particular, have demonstrated that FITs can be used as a powerful policy tool to drive RE deployment and help meet combined energy security and emissions reductions objectives (Germany BMU 2007).”

It goes on to say that FIT policies typically include three key provisions: (i) guaranteed access to the grid; (ii) stable, long-term purchase agreements (typically, about 15-20 years); and (iii) payment levels based on the costs of RE generation.

Click here to read the full guide.