Policy Corner: Feed-in Tariffs Offer Farmers Clean Energy Revenue

By Dan Burgess 

As we’ve explored over the past few months, Massachusetts has several initiatives in place that aim to promote clean energy generation.  Renewable portfolio standards, net metering, tax credits, rebates, and state grants are all helping to ensure that the Commonwealth is a burgeoning renewable energy leader in the United States.These policies, particularly net metering and the streamlining of wind turbine citing processes, now pave the way for a more progressive policy that has proven to be successful in Europe and Canada: renewable energy payments known as feed-in tariffs (FITs). 

Put succinctly by renewable energy analyst and advocate Paul Gipe: “Feed-in tariffs are simply payments per kilowatt-hour for electricity generated by a renewable resource. They are the world’s most successful policy for the rapid development of significant amounts of renewable energy... Feed-in tariffs work because they are more equitable than other policies. They enable everyone--including homeowners, farmers, cooperatives, and businesses large and small--to profit from renewable energy.” 

As Gipe mentions, FIT policy has proven, both in Europe and in the few times it has been attempted in the United States, to be superior to other clean energy policies.  These guaranteed payments from power companies are successful because they allow investors to garner a modest profit from renewable energy generation.  A smart FIT payment structure ensures moderate profitability for even small projects and reduces market entry barriers that currently exist for establishing clean energy systems.  It’s easy to imagine our state leading the clean energy boom if Bay State households were paid directly as a result of installing solar panels on their roof or erecting a windmill on their farm. As outlined by the National Renewable Energy Laboratory, there are six key elements for successful FIT policy:

1. Contract stability, typically for 15 - 20 years
   
2. Payments based on the cost of a project that ensure a modest profit for the investor.
3. Incremental payment decreases throughout the lifetime of a contract to account for future technology advancements.
4. Payments should be dependent on the type of project. 
5. In order to ensure payment, additional costs of FIT payments should be tied directly back to electricity rate payers.
6. Ensure a FIT approval process in streamline in order not to discourage projects from coming to fruition.

Massachusetts has set formidable goals for clean energy generation and job creation.  These goals aim to reduce negative climate impact, create green collar jobs, lessen the Commonwealth’s requirement for fossil fuels, and to produce a more sustainable state for future generations.  The most effective way for Massachusetts officials to ensure the Bay State is this leader, is to enact a common sense feed-in tariff system that will ultimately renew, revitalize, and rejuvenate our state. To learn more about FIT policy visit www.wind-works.org or visit the NREL at www.nrel.gov.  

Comments

[Michael Sanders]

What you will never hear about in the news is that Big Oil has invested enormous amounts of capital into renewable energy projects. By dominating the Green Energy marketplace, they help to ensure that costs associated with entry into said marketplace remain high, thus ensuring their continued dominance. As a result, they, not us, will benefit from the profits purported to be had by FIT policies. You can thank Big Oil lobbyists for the greasy-palmed liberals lining their campaign coffers at our expense.

[Cheap Christian Louboutin]

*People are always telling you what to do, but what's right for them may not be right for you.