Focus on Feed-in Tariffs (FiT) at the state level for solar.
[San Francisco, California USA]
On the eve of Intersolar North America 2008, Monday, July 14, 2008, I managed to attend the 1st Solar Symposium sponsored by the German American Chamber of Commerce (GACC), California Branch. Although the 1st GACC “Solar Symposium” Fully Booked – International Audience Expected, I was able to jump from the wait list to an attendee despite my over aggressive accreditation tactics.
Before lunch, SEIA (Solar Energy Industries Association) President Rhone Resch presented “The US Prior to the 2008 Presidential Elections – Status and Perspectives of Solar Promotion on a Federal Level”. The ITC (Investment Tax Credit) myopia continues as HR 6049 is supposed to be coming up for another vote in the Senate soon. There was no mention of the first national Feed-in Tariff bill, HR 6401 Renewable Energy Jobs and Security Act, introduced by U.S. Representative Jay Inslee (D-WA). Please see PVSC 33 Opens and Feed-in Tariffs: Solar FiT for the USA for related posts.
In the afternoon, the Panel Discussion, “International Perspectives: What are the Most Promising Incentives to Develop the US Solar Market“, tackled opposing views on the status quo of rebates and ITCs versus the market proven German Feed-in Tariff model. The panel was moderated by:
- Adam Browning, Executive Director / The Vote Solar Initiative
- Professor Eicke Weber, Director / Fraunhofer Institute for Solar Energy Systems (ISE)
- John L. Geesman, Former Commissioner / California Energy Commission
- Rhone Resch, President / SEIA (Solar Energy Industries Association)
- Gerhard Stryi-Hipp, CEO / German Solar Industries Association
- Helmut Gehle, Sales Director, Solar Technologies / Schuco USA LP
Adam Browning kicked off the discussion with his presentation, “US Solar Market – Policy Drivers“. In his opening, Mr. Browning said:
When it comes to Energy policy much of it is lead at the state level rather than at the Federal level. Most of the most critical electricity related rules and regulations are set at a state level.
This observation was echoed by many panelists who advocated activity at the state level over complex and protracted energy policy legislation at the Federal level.
However, a misleading comparison of Rebate programs with net metering versus the Feed-in Tariff model is shown in the slide above titled “Avoided Utility Purchases with Marginal Incentives vs. Feed-in Tariffs”.
Adam Browning said:
…From a policy maker’s perspective we are looking at what is the amount of public funds, the above market cost, that they are going to need to have to provide to a program in order to make that program work, give a financially interesting proposition to people who want to go solar.
Under this particular model, most of the value comes from avoided utility purchases and you give an incentive that is just the marginal difference to get to an economically interesting proposition.
Under a Feed-in Tariff, you must provide the full value of that electricity and from the policy maker’s perspective that often looks like a much larger amount which makes it harder to do.
This perpetuates Adam Browning’s flawed Feed-in Tariff versus Marginal Incentive article refuted by Michael Hoexter in Feed-in Tariffs: Getting off the Renewables Roller Coaster, both found at RenewableEnergyWorld.com.
V. John White said:
Despite all the noise from California, if I may be blunt, the truth of the matter is 95% of all renewable megawatts in this state were built in that period (1980’s). In the entire 15 years since then, most recently since the 2002 passage of the Renewable Portfolio Standard, the 20% standard by 2017 which has since now been advanced to 2010. We are not much closer to that goal than where we started. We have In fact lost ground from about 12% to 11%.
Professor Eicke Weber said:
I think our goal should be exactly like you (John White) said; the fastest possible introduction of the largest possible quantity of renewable energy.
And now let me again make my pledge why the Feed-in tariff works, the German model. The reason is it is not based on people who like PV and who are happy to get a tax credit to get a lower priced PV; this is nice, and nobody would be against it. But the key issue is to provide an interesting investment proposal, a business plan, so that anybody can sit down and say my roof has this size I can produce 5kW (kilowatt) of PV. It means at the end of the day when I have paid down the system I get each month a paycheck.
Net metering is wrong. Net metering is the wrong way. Net metering means the best you can achieve is bringing your utility bill to zero. And this is just against what we all try to do on the energy savings side.
Energy efficiency and conservation efforts do not scale with net metering as noted in my AB 1920: California bill goes beyond Net Metering post.
John Geesman said:
As a consequence, I don’t think it’s too much of a stretch in terms of normal governmental authority to see the logic of Feed-in Tariffs. Now there are those that will differ. They will say that’s delegating to the states an awful lot of authority. I’m here to tell you in my adult lifetime, national energy policy as much as I have known about it, has almost consistently been headed in the wrong direction. And I put a lot more comfort in seeing those decisions made by the states.
Although I’m not sure when he arrived, John Garamendi, Lieutenant Governor of California, was intensely interested in the afternoon panel discussion and closed the symposium with a speech waxing fluent about Feed-in Tariffs. Lieutenant (Lt.) Governor Garamendi said:
I like what Germany has done with its Feed-in Tariffs; they apparently worked. We could try all kinds of models, but it seems to me we start with a model that works.
He encouraged the panelists to reach a consensus and work to get a FiT policy in place for California. The Lt. Governor Garamendi also observed California policies at the city, county, and state levels need to be integrated and aligned to achieve the goal of transitioning from fossil fuels to clean, renewable energy.
Last year when I asked the Lt. Governor about Feed-in Tariffs for renewable energy at the 2007 CCTO Competition (please see California Clean Tech Open 2007 Kick-off Event Wrap up), they were not at forefront of his considerations. 1st “Solar Symposium” of the German American Chamber of Commerce an Immediate Success has additional quotes and the GACC’s perspective.
Although they claimed to have FiT policy efforts, CALSEIA (California Solar Energy Industries Association) did not respond to my requests for details about their proposed approach to a California Feed-in Tariff for solar.
California has an immaculate convergence of great solar resources, sustainability and environmental awareness, renewable business ventures, and progressive political support to Go Big Solar driven by a German style Feed-in Tariff. Is a foolish name change to Freedom Tariff or Energy Independence Tariff needed before we can adopt sound renewable energy policy as our own?