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
impact.
By Craig Lewis, FIT Coalition (California)
