The first objective is to establish “a broad federal legislative and regulatory package” to accelerate the growth of the solar industry and encourage consumer adoption of solar technologies. This includes specific incentives for U.S.-based clean energy manufacturing – the company recommends a permanent extension of the Section 48c advanced manufacturing tax credit – and a package of policies to clear hurdles to market adoption and provide strong, consistent domestic demand for solar power.
This package of incentives includes a broad and robust national renewable electricity standard (RES) to “get the whole country marching in the right direction,” Mr. Peeters said, as well as targeted and robust production incentives in the form of feed-in tariffs or other “renewable energy payment” policies.
These targeted incentives are particularly important, Mr. Peeters said, “because solar is an infant industry really. It's young. There is a lot to learn. Technology development is very very fast. Solar will get to a cost where it is competing with traditional sources of energy … We will see it in the next ten years the technology will evolve fast enough so that in many places, those incentives will go way way down, maybe down to zero. But right now, today,” Peeters noted, “[production incentives] are an important tool to bring some people over this initial barrier, to give the activation energy to make this happen."
In early 2009, the Gainesville Regional Utility (GRU), serving the electricity needs of 100,000 Gainesville, Florida customers, enacted the first comprehensive, cost-based Feed-In-Tariff (FIT) in the United States. The program “sold out” its 2009 capacity in one week. Over the next 5 months, enough applications came in for the next seven years. The Gainesville experience provides the strongest evidence to date that a German-style FIT policy can be the most effective way to bring renewable energy online in the US while achieving both environmental and economic goals.
Prior to this year, the Gainesville energy challenge was fairly typical. More than sixty percent of the electricity delivered by GRU was generated from coal and only one percent was from renewable sources. The city had committed to Kyoto protocol goals for GHG emissions, but there was minimal potential for wind, geothermal, hydro or tidal power. Two years of direct rebates and a net-metering policy had resulted in less than 400KW of deployed solar.
So, the city needed an incentive to drive private investment in solar generation, especially in the commercial rooftop market where practically nothing had been done. After extensive research, GRU settled on the German FIT model. The GRU program sets a fixed price, standard, must-take 20-year contract available for independent producers of solar energy. While any given FIT project has a fixed price for 20 years, the contract price goes down over time depending on the year the contract is signed. The program is limited to 4 MW of contracted capacity each year, but 4 MW annually in Gainesville is equivalent to the State of California having a FIT program that adds 500 MW of solar annually; a solar deployment rate that is at least 3 times greater than California or any other region in the US has ever experienced.
There’s no question the Gainesville FIT program has been a major success. In the program’s first year, the 14th largest city in Florida will deploy more solar capacity than the entire State of Florida had cumulatively deployed in its history through mid-2009. The 2009-contracted projects include two large ground based systems and almost 20 rooftop systems, of which all but two are online or in construction. These projects will produce approximately .4% of the GRU annual delivered energy and GRU estimates that the program will increase the average customer’s monthly bill by no more than $0.74, which is well under 1%.
As a consequence of the Gainesville FIT, the local economy has received a significant boost with new companies and contractors entering the market. As is usual with increased scale, the price of solar has also become much more reasonable in the region due to the tremendous success of the FIT program which has also helped to accelerate non-FIT renewable energy installations as folks as solar pricing is driven down and parties interested in the FIT investigate other options after learning that the FIT program is on a multi-year waitlist.
Across the country, utilities and regulators are looking for
powerful ways to drive renewable energy investment. The Gainesville example shows that proven policy mechanisms
can be imported successfully to the US and adapted quickly to have significant near-term
By Craig Lewis, FIT Coalition (California)
 Regan, Ed, Strategic Planner, GRU, “Gainesville’s Solar Feed In Tariff: Early Lessons Learned,” September 15, 2009.
 Ko, Ted, Associate Executive Director, FIT Coalition, personal interview, December 2, 2009.
 Crider, John, Strategic Planner, GRU, personal interview, November 30, 2009
From Paul Gipe (Wind-Works.org):
From the New York Times Green Inc. blog:
"Countries that adopt policies obliging utilities to purchase a percentage of their power from renewable sources at above-market prices — also known as a “feed-in tariff” — represent the safest harbors for investors looking to finance clean-energy ventures, according to a broad-ranging risk analysis released Monday by Deutsche Bank’s global asset management group and Columbia University’s Earth Institute.
In an accompanying ranking of 109 countries and regions, Deutsche Bank found that those with such clean-energy-friendly regulatory regimes included Australia, France, China and Germany.By contrast, North America presents a higher-risk environment that is considered less attractive to investors, although a growing number of states and provinces are adopting feed-in tariff strategies."
The plan, based on feed-in tariffs that helped launch the solar
industries in Spain and Germany, offers local solar producers 20-year
contracts for their power at 27 cents per kilowatt-hour. That's roughly
three times the rate that local residents pay CPS Energy for power." Read more.
(Photo courtesy of Flickr user 'J', shared under a Creative Commons license.)