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Feed In Tariffs A Policy for Rapidly Expanding Renewable Energy Deployment

Feed In Tariffs A Policy for Rapidly Expanding Renewable Energy Deployment. What is a Feed In Tariff?. Feed In = “ feed ing electricity in to the grid” Tariff = “the price paid for electricity”

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Feed In Tariffs A Policy for Rapidly Expanding Renewable Energy Deployment

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  1. Feed In Tariffs A Policy for Rapidly Expanding Renewable Energy Deployment

  2. What is a Feed In Tariff? • Feed In = “feeding electricity into the grid” • Tariff = “the price paid for electricity” • Establishes fixed premium prices for sale of renewable electricity generation, using standard long-term contracts • Available to anyone who connects an eligible power generator to the electricity grid

  3. Feed In Tariffs or FITs • FITs - The most widely used renewable energy policy in the world • As of September 2009, 48 nations had FIT policies • As of 2008, 45 % of all global wind development and 75% of all world solar PV capacity developed under FIT policies

  4. Where have FITs been used successfully? Germany • Between 2000 – 2009 Germany added 20,000 MW of Wind Power and 8,700 MW of Solar PV, creating 300,000 new jobs

  5. . Where have FITs been used successfully? Italy • Italy’s FIT began in 2007 • With 1/5 the US population, Italy has installed 2.4 times MORE solar PV than the USA since 2008. • Italy’s solar PV capacity now exceeds the USA by 1.5 times.

  6. Total Solar PV Installed Capacity Italy & USA (Megawatts) FIT Begins in Italy

  7. Where have FITs been used successfully? Ontario • Fit program began in 2009 • Ontario’s installed PV capacity increased from 2 MW to 48 MW in one year. • Over 2600 MW of renewables under contract as of Nov. 2010 • Expected to have largest solar PV market in North America by 2012

  8. How Successful FITs Work T.L.C. Transparency – purchase agreements using standard offer contracts with established fixed rates Longevity – long-term power purchase contracts (10 – 40 years) Certainty– Fixed prices, long-term contracts, guaranteed access to the grid Plus Rates based on costs of generating power plus a reasonable return on investment

  9. Who is Eligible to Sell Power? Anyone with an eligible renewable energy facility: • Farmers • Homeowners • Small Businesses • Large Businesses • Non-profits • Industry • Public Agencies • Electric Utilities • Etcetera

  10. Setting FIT Prices • FIT payment level based on technology • FIT prices adjust over time • Costs of FIT payments passed onto ratepayers through each utility’s general rates

  11. Advantages of FIT Policies • Accelerates development of Renewable Energy & lowers costs and risks for investors through T.L.C. • Creates in-state distributed generation • Creates local economic development in all regions of state • Ensures renewable energy will be developed in-state • Can support in-state manufacturing of RE equipment and use of in-state labor

  12. FITs and RPS – Complementary Policies • RPS sets the goal • FIT provides a powerful mechanism to achieve the goal • FIT ensures local economic development and distributed generation • RPS ensures utilities are proactive investing in renewables • Economic benefits distributed across all regions of Kentucky

  13. FITs lead us toward our ultimate goals… …by greatly accelerating renewable energy development …and establishing a long-term commitment to a renewable energy economy.

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