On July 7^th, 2010 researchers at the University of California at Berkeley (Berkeley, California, US) published a study of the economic benefits of a comprehensive feed-in tariff (FiT) for the US state of California. The study predicts that a “robust” FiT policy for solar photovoltaic (PV) projects between 1 and 20 MW could create an additional 280,000 direct jobs over the next decade and provide USD$1.7 billion in tax revenue for California, while giving the state a mechanism to meet its ambitious goal of 33% renewable electricity generation by 2020. "Dan Kammen and his group at UC Berkeley are the most knowledgeable experts on the renewable energy and economic considerations that were examined in this study", stated Craig Lewis, executive director of the FIT Coalition, a group that advocates for feed-in tariffs. "The conclusions confirm the FIT Coalition’s unvarying position that FiTs are the best policy mechanism for accelerating the deployment of cost-effective renewables while delivering tremendous economic benefits wherever FiTs are designed to achieve scale."

Assumptions of the study

Among the most important assumptions of the study was that PV would be used to meet the remainder of California's 33% renewable portfolio standard (RPS) goals. In 2007 California generated 12% of its electricity from renewable energy sources that could be used to meet these targets. The study modeled a FiT for PV generation of USD$0.16/KWh in 2011, decreasing to USD$0.10/KWh in 2020.

Many aspects of the study were based on the Renewable Energy and Economic Stimulus Act (REESA), a 2009 proposal rejected by the California legislature that contained a feed-in tariff. Both the study and REESA based their proposed feed-in tariff for 1-20MW scale projects, as smaller projects already receive assistance from two state policies, the California Solar Initiative and the Small Generator Incentive Program. The report states that projects larger than 20MW are already targeted by the state's RPS policy.

RPS and FiT policies

The report notes that California has not met its RPS goal of 20% renewable generation by 2010, and is not on track to achieve 33% by 2020. The report echoes a criticism of RPS policies made by other energy policy experts: that while RPS policies provide mandates, their mechanisms for reaching these mandates, which are essentially financial penalties for non-compliance and renewable energy credit trading, are simply not as effective for assisting the development of more renewable energy generation as the financial incentives in FiT policies.

Regardless, European-style FiT policies have not been popular in North America. According to energy policy expert Paul Gipe of Wind Works, the performance-based incentive programs that have been passed in several US states are not true feed-in tariffs. Instead, 31 US states and the District of Columbia chose to enact RPS policies, though the US state of Oregon has recently enacted an FiT pilot program. It will still take considerable effort to win wide-scale adoption of these policies in the US.

The report's authors are Professor Daniel Kamman and Max Wei of the Renewable and Appropriate Energy Laboratory at the University of California at Berkeley.

Download the full report from the FIT Coalition: http://www.fitcoalition.com/economic-benefits-of-a-fit/

2010-07-12 | Courtesy: FIT Coalition press release | solarserver.com © Heindl Server GmbH