Feed-in tariff
FITs often include a "digression": a gradual decrease of the price or tariff in order to follow[4]: 25 and encourage technological cost reductions.
[1][4] FITs typically offer a guaranteed purchase agreement for long periods (15–25 years) and give incentives to producers to maximize output and efficiency.
[1][11][12] In 2008, a detailed analysis by the European Commission concluded that "well-adapted feed-in tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity.
Ideally, these policy instruments would fall under a globally-coordinated body overseeing their implementation and regulation, which could be facilitated through the World Trade Organization.
[21][22] Within PURPA was a provision that required utilities to purchase electricity generated from qualifying independent power producers at rates not to exceed their avoided cost.
The long-run estimates of electricity costs were based on the belief (widely held at the time) that oil and gas prices would continue to increase.
When oil and gas prices plummeted in the late 1980s, the Standard Offer Contracts that were signed to encourage new renewable energy development seemed high by comparison.
Germany's feed-in law underwent a major restructuring in 2000 to become the Renewable Energy Sources Act (2000) (German: Erneuerbare-Energien-Gesetz or EEG).
[30][31] Savings for consumers have meant conversely reductions in the profit margin of big electric power companies, who reacted by lobbying the German government, which reduced subsidies in 2012.
Specific deployment corridors now stipulate the extent to which renewable energy is to be expanded in the future and the funding rates (feed-in tariffs) for new capacity will gradually no longer be set by the government but will be determined by auction; starting with ground-mounted solar plant.
[43][44][45] Quota systems favor large, vertically integrated generators and multinational electric utilities because certificates are generally denominated in units of one megawatt-hour.
[52] Ontario introduced a feed-in tariff in 2006, revised in 2009[53] and 2010, increasing from 42¢/kWh to 80.2¢/kWh for micro-scale (≤10 kW) grid-tied photovoltaic projects,[54][55] and decreasing to 64.2¢/kWh for applications received after 2 July 2010.
[64] China has implemented a tariff system for new onshore wind power plants aimed at supporting struggling project operators and ensuring profitability.
The National Development and Reform Commission (NDRC), the country's economic planning agency, introduced four tariff categories for onshore wind projects, categorized by region.
[70] The government would purchase the electricity generated by investors, taking inflation into account, while consumption is to be paid in local currency and depreciation rates reviewed after two years.
In July 2010, the Renewable Energy Sources Act was again amended to reduce the tariffs by a further 16% in addition to the normal annual depreciation, as the prices for PV panels had dropped sharply in 2009.
Under a gross feed-in tariff (now not offered for new connections) every unit of electricity generated is exported to the grid (power lines) with reimbursement to the owner of the solar panels.
[90] The National Infrastructures Ministry announced that it would expand the feed-in tariff scheme to include medium-sized solar-power stations ranging from 50 kilowatts to 5 megawatts.
The previous 2003 subsidy scheme Ministeriële regeling milieukwaliteit elektriciteitsproductie (Ministerial regulation for environmental electricity production) which was funded by charging 100 euro per household annually on top of energy taxes stopped in 2006 because it was seen as too expensive.
[103] The Portuguese policy was found to have positive impacts over the period 2000–2010, with a reduction in emissions of 7.2 MtCO2eq, an increase in GDP of €1.557 billion, and a creation of 160 thousand job-years.
"[105] In February 2015, the ERC agreed to give a FIT rate of P8.69 per kilowatt hour for 20 years to the Burgos Wind Farm of the Energy Development Corporation.
South Africa's National Energy Regulator (NERSA) announced 31 March 2009 a system of feed-in tariffs designed to produce 10 TWh of electricity per year by 2013.
[113] In 2006, the Thai government enacted a tariff paid on top of utility avoided costs, differentiated by technology type and generator size and guaranteed for 7–10 years.
The law guaranteed grid access for renewable energy producers (small hydro up to 10 MW, wind, biomass, photovoltaic, and geothermal).
In July 2009 Britain's then-Secretary of State for Energy and Climate Change, Ed Miliband, presented details of the scheme, which began in early April 2010.
[120] This was in response to European speculators lining up to establish huge solar farms in the West Country that would have absorbed disproportionate amounts of the fund.
This was successfully challenged in the high court by an application for judicial review, jointly made by environmental pressure group Friends of the Earth and two solar companies – Solarcentury and HomeSun.
The judgment, made by Mr Justice Mitting after a two-day court hearing, was hailed as a major victory by green campaigners and the solar industry.
The commission's decision capped the total amount of feed-in tariff projects brought onto the electricity grid at 5% of the system peak on Oahu, Maui, and Hawaii Island for the first two years.
To participate in the program insurance and means for disconnecting the system accessible outside of the building and specific brands of equipment dictated by the government were required.
