Want something to work on that promotes the use of renewable energy so that the US has something to show at COP16? A renewable energy policy that began in the United States (Jimmy Carter: 1978), was popularized by Germany, is slowly (ever so slowly) making its way back to its maker—the “feed-in tariff” or FiT. (A tariff? could be dangerous. Well, make sure you read paragraph 4) Gainesville, FL adopted a FiT in March 2009 and has experienced huge gains in solar installations. There are a few other FiTs in Vermont and California too. That’s great, but what is a FiT anyway?
Using sources of renewable energy (eg. solar, wind) is currently more expensive than traditional sources (eg. coal). Unless purchasing renewable energy is incentivised, the prohibitive high prices of renewables may mean that these clean energy technologies never take off, where economies of scale can allow renewable energy to reach grid parity (ie. same price as traditional energy sources). Basically, a FiT requires that utilities pay above market prices for energy produced from renewable sources and this is guaranteed for a set amount of time. The extra cost is distributed among the consumers where (in Germany) they may pay ~ 3% more on their electricity bill. So once you install solar panels, which are likely to be subsidized, the utilities will pay you for the electricity you produce!
In Germany, this incentive is designed to taper off to promote more efficient and greater production of renewables. The added cost per German household in 2007 was 3-4 Euros per month, or approximately 1 latte, as reported in the National Journal. Neville Williams, author of “Chasing the Sun: Solar Adventures around the World” (I recommend this to anyone interested in the potential impact that renewables can have in developing countries), comments on both the FiT adoption in Florida and Germany’s added costs to the consumer. He says the added costs in Florida is much cheaper than building new power plants for the needed energy.
For what it represents, the name “feed-in tariff” is quite misleading and may actually be one of the main reasons why it has not succeeded in the US thus far. Using the word “tariff” is big no-no for politicians. The original German term is “Einspeiseverguetung” Einspeise (feed-in, from “ein” and “speisen”) Verguetung (compensation, fee or payment). Basically, it is “compensation” for you (the producer) “feed(ing)-in” the renewable energy you produce to the grid. Wherever this policy is implemented, renewable installations take off! Germany has the solar isolation (amount of sunlight hitting the earth) equivalent to Alaska and they still accounted for almost half of all solar installations worldwide in 2007.
Think this is a great idea? It can be. There are some logistical/technical problems associated “tying into the grid” such as how to balance production using variable (coal) and intermittent (wind, solar, etc) power sources to meet demand. This has produced some headaches. For example, I was told that one really windy day a while back, wind turbines produced so much extra electricity in Germany that a coal-fired power plant had to be shut down for a while. All RE had to be purchased and to prevent excess electricity from being wasted the plant had to go offline. Cool right? Well, it is very difficult to stop and start a coal-fired power plant. Imagine having to synchronize something like this with more RE in the mix. That’s where careful planning, redesigning the grid and scientific breakthroughs in energy storage come in…what are you waiting for? Get to work!