Feed-in tariffs have been the driving factor in PV solar power uptake around the world according to the USA government’s National Renewable Energy Laboratory (NREL).
In its report entitled “A Policymaker’s Guide to Feed-in Tariff Policy Design”, the NREL says in the European Union, feed-in tariffs have led to the deployment of more than 15,000 MW of solar photovoltaic (PV – solar panels) power and over 55,000 MW of wind power between 2000 and the end of 2009.
Citing data from Deutsche Bank, feed-in tariffs are responsible for around 75% of global PV and 45% of global wind deployment and are the most widely used policy in the world for accelerating renewable energy – more so than either tax incentives or renewable portfolio standard policies.
The 144 page report draws on experience with feed-in tariff policies from the European Union, Canada and the United States and examines the various models; such as gross vs. net feed in tariffs.
The NREL says the major benefits of feed-in tariffs are:
1. Renewable energy developers are provided long-term stability of the revenue streams generated from electricity sales.
2. The transparent policy structure also creates an open and straightforward framework that residents, businesses and investors can understand.
3. Feed-in tariffs allow efficiently operated projects to earn a reliable rate of return on renewable energy investments, which makes it possible for entrepreneurs, investors, and homeowners to invest in solar power systems.
In Australia, feed-in tariff schemes are now available in most states – a full listing of various programs can be viewed on the Energy Matters web site.
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
Full report: “A Policymaker’s Guide to Feed-in Tariff Policy Design” (PDF)