So far, our blog series — Ramping Up Renewables: Clean Energy Policies to Watch in 2013 — has provided you with information that quantifies the recent growth of wind and solar generation, explains the transformative potential of carbon emission standards on our national energy portfolio, and catalogs the benefits accrued by states that have adopted a renewable electricity standard. “Great!” you say. “But what about small-scale renewables that can be built on warehouses and above parking lots? How do we use policy to promote these projects in our own communities?”
Well, dear reader, I am glad you asked! Because today’s blog is about feed-in tariffs: policies designed to encourage the rapid development of smaller-scale renewable energy facilities in areas where the electricity is needed.
A more intuitive name for these policies would be standard offer contracts because they offer renewable energy developers a fixed price for projects if they meet certain, basic criteria. Cities and states that have adopted feed-in tariffs typically extend them to projects that range from 10 kW to 3 MW in size. The idea behind feed-in tariffs is to eliminate the lengthy contract negotiation process that can bog down smaller projects. Since these facilities are likely to connect to the distribution grid wires that bring electricity to our homes and businesses, they are also called distributed generation projects.
Why is small-scale renewable energy important?
In order to make a major transition away from fossil-fueled electricity and the pollution it creates, we are going to need both large and small-scale renewable energy projects. These smaller projects play an important role because if they are built in areas where we need the electricity the most, they won’t need to interconnect to transmission lines, which can be expensive to build or upgrade, and are increasingly vulnerable to storms, fires, and extreme heat events.
These projects are less likely to be built on land that is already populated with plants and animals and they will likely have fewer environmental impacts to mitigate, which means they can be built faster than some larger projects. And, these projects are more modular, which means that even if a section of a project is damaged by a storm, chances are the entire system won’t collapse.
Early assessments indicate that renewable energy projects in the Northeast weathered Hurricane Sandy much better than their fossil and nuclear counterparts. All of these factors contribute to a cleaner, more flexible, and resilient electricity grid.
States and cities across the country are promoting local clean energy projects
By the end of 2012, 14 states and cities had adopted feed-in tariff programs designed to install more renewable energy generation. These programs differ by the price they pay for the power, and the scope of the program.
For example, California expanded a statewide feed-in tariff in 2009 to allow renewable energy projects up to 3 megawatts (MW) to participate, and capped the total number of installations in the state at 750 MW. The Los Angeles Department of Water and Power, electron supplier to one of the sunniest cities in the country, rolled out the first phase of its 150 MW program this February. But states like Vermont and Rhode Island, which conjure up images of snow more often than sunshine, have also been early adopters of the policy. Although many of the policies focus on the installation of solar photovoltaic (PV) systems, feed-in tariffs can be developed to support any type of small-scale renewable energy generation.
It should also be noted that several countries, including Germany, have much more aggressive feed-in tariff programs than the U.S., with a fraction of this country’s solar resources. Today, Germany has installed over 25 GW of PV, compared to approximately 7 GW installed in the US. While the U.S. may have good reasons to chart a different clean energy course than our European neighbors, U.S. states and cities should take note of the clean energy that’s springing up because of the feed-in tariff policies we’ve already enacted and consider whether a local feed-in tariff policy could be right for them. Well-designed, local policies can be an important tools to drive us towards a cleaner electricity system.