Feed-in Tariff Legislation

We are actively supporting legislation that would enact a feed-in tariff bill known as "The Maine Renewable Energy Sources Act" in the Maine Legislature.

Another group, The World Future Council is also promoting this concept globally. Through their Policy Action on Climate Toolkit (PACT) they are offering support to lawmakers worldwide.

Similar legislation (House Bill No. 5218) is scheduled to come up in the Michigan State Legislature.

Washington State has a law in place that could be described as as a step toward a feed-in tariff.

For more information see the German Ministry for the Environment, Nature Conservation and Nuclear Safety’s Progress Report 2007:
http://www.erneuerbare-energien.de/inhalt/36356/

Article in Maine's Coastal Journal about this proposed legislation:
http://www.coastaljournal.com/website/content/view/382/67/

CURRENT NEWS:
May 8, 2008

Will RECs Create An Unhealthy Solar Market (Letter to Governor Crist from 28 Florida Solar Companies Calling for Feed-in Payments and Cautioning Against a REC Market.
International Solar Energy Society Calls for Feed-in Tariffs
German Environment Minister Gabriel announced that the new German tariffs for wind energy will be raised 1.2 Euro cents or about 1.8 US cents/kWh. This is good news for wind energy and further evidence that the tariff mechanism can be used to raise payments as well as lower them.
Representative Kathleen Law, former CEC Commissioner John Geesman, and Wisconsin's Focus on Energy Michael Vickerman discussed their views on feed-in tariffs at the ASES Solar Power 2008 conference in San Diego May 7.
U.S. State Solar Debate: Will SRECs Create Unhealthy Market Concentration? by Stephen Lacey, Renewable Energy World.

WHAT IS A FEED-IN TARIFF LAW?
The Maine Renewable Energy Sources Act

Operators of the electric power grid in Maine purchase fossil fuel-generated electricity because it is inexpensive. Each year the federal government spends billions of dollars on subsidies to the fossil fuel and nuclear industries for research and development and on discounting royalties for the extraction of fossil fuels from public lands. According to the U.S. Department of Energy, half of all federal energy subsidies go to fossil fuels, while those for renewable energy total 18 percent of the funding, mostly to promote corn-based ethanol, which also relies on fossil fuels for its production. Current federal policy therefore interferes with the market by stacking the cards in favor of fossil fuels.

A feed-in tariff law, first introduced in Germany, levels the playing field without increasing government subsidies. It (1) requires by law that utilities purchase renewably produced electricity from all qualified suppliers; (2) sets by law the rate which electric utilities must pay for such power; (3) requires that utilities enter into a standard contract with all renewable energy suppliers for a set term specified by the law; (4) establishes management and oversight responsibilities; and (5) reserves to the legislature the power to periodically review and revise the tariff and the terms of the standard contract in the public interest; i.e. based on criteria independent of the short term interest of either the utilities or the feed-in power suppliers.

The Maine Renewable Energy Sources Act will create an incentive structure tied to performance by making multiple payments over a long period of time based on actual energy production of a given renewable energy generating system. The rationale behind this renewable energy investment incentive legislation is to provide a temporary pathway for investment until such time as prices decline to the point of cost-effectiveness in the marketplace.

To take into account technological developments and their economic efficiency, the law guarantees that grid operators must compensate producers for green electricity, but it also decreases the rate grid operators must pay under newly executed contracts each year. This structure ensures both that green power producers will have high security in their investments and that the legislation will not prop up inefficient technologies as the market grows and becomes more efficient.

This is similar to the rationale behind the German legislation: the decreasing payments encourage investors to install their equipment as quickly as possible to obtain the highest payment for their power. It also ensures that people install high quality units. Since the green electricity producers receive payments per kilowatt-hour produced, there is great incentive for operators to run their installations efficiently and with as little interruption as possible.

The benefits of a feed-in tariff law in Maine go beyond direct economic benefits for renewable energy investors. As green producers multiply, utilities benefit from not having to install expensive new central generating capacity. At the same time the law will be a catalyst for growing a green energy sector in Maine. Since introducing its own feed-in tariff law, Germany experienced phenomenal growth in all sectors of the renewable energy sector. The photovoltaics industry, for instance, grew six-fold in three years. In 2006, 241,000 Germans were employed in the renewables sector and 124,000 of those jobs were created as a direct result of the German Renewable Energy resources Act. The Act also resulted in environmental benefits; among them a 45 million ton reduction in carbon dioxide emissions in 2006 alone.