With an interest in promoting renewable energy development governments around the world are looking to the FITs incentive model and many are already using programs that encourage the adoption of renewable technologies. FITs inherently promote community economic growth and stability, also creating new market opportunities that otherwise may not be achieved. They promote business relationships through policy that seeks to guide and encourage the deployment of renewable energies fairly. The idea of feed in tariffs is still new to many governments and populations, and there is not a one size fits all scenario that would apply for this type of incentive system, as there are different variables a government considers on how best FITs can benefit their own country.
We would like to recommend a meaningful resource for reading that emphasizes the importance of FITs within the context of aiding climate change mitigation. The World Future Council is amongst several key global governing bodies providing assistance to countries on creating FITs policy or improving existing policy. Their website, www.onlinepact.org, provides reading on:
- The political and technical prerequisites for introducing a FIT in a particular country; and
- The objectives and key features of a good FIT, and the various aspects to each of these.
So let's take a look a few countries to get a sense of how the FIT concept is being applied in 2009.
Italy
In February of 2007 Italy introduced a new feed-in tariff plan for Photovoltaic plants connected to the grid with a capacity higher than 1 kWp (peak kilowatt output). This policy was provided in consideration for individuals, registered companies, condominiums and public bodies. Valid for 20 years, a contract also offers bonuses for high rates of Photovoltaic integration in buildings and for smaller communities with a population around 5000. Recognized by the feed in tariff program are, non- integrated, partially integrated and full integrated PV systems.
Italy's feed-in tariff scheme also encourages energy efficiency measures for buildings. An additional tariff bonus can be obtained for meeting energy efficiency standards in buildings, up to a possible 30% bonus is available, above the regular tariff.
In April 2008 feed in tariffs were expanded to include electricity production from Solar Thermodynamic plants, including hybrids, connected to the grid. The feed in tariff agreement for Thermodynamic Solar lasts for 25 years. The feed in tariff rate for hybrid plants is offered according to the ratio of solar electric production.
France
Interestingly France had fairly robust feed in tariffs launched back in 2002. Neighbor to Germany, I'm sure aided in France's awareness for the value of a FIT system that induces renewable energy deployment. Energy systems made eligible for FITs included Biogas, Methanization, Geothermal, Animal Waste, Solar Photovoltaics and Radiative technologies. Small Hyrdo and all sites benefiting from the tariffs are subject to a cap of 12 MW's capacity. As a side note, small Hydro projects receive bonuses.
More feed-in tariff changes were introduced in July 2005. Contract terms and payment rates have been re-worked since their creation in 2002. For example, Wind plants built after January 2008 will see tariffs fall by 2% per year, also subject to adjustments according to inflation. France pays close attention to R&D of renewable energy technologies, and adjusts their tariff system accord to advancements in the efficient production of renewable energy. They also offer bonuses to operations following high energy efficiency standards.
This year France has further provided incentives that encourage attention to energy efficiency for residential buildings by offering a 0% Eco-Loan for energy smart renovations, and for new or older home purchases built or renovated to energy efficient standards.
South Africa
In March, 2009 South Africa's National Energy Regulator (NERSA) brought into affect the country's first renewable energy feed-in tariff plans. Called REFIT, it directs South Africa's public utility, ESKOM, to purchase energy from qualified renewable energy generators at pre-set prices based on the levelised cost of electricity. What's also interesting is that it allows licensed independent renewable energy power producers to sell power directly to buyers outside of the REFIT program. For South Africa, there is plenty of room for clean energy enterprise to grow without the need to cater solely to long-established monopolies. Tariff payments are presently being financed by a fee passed on to energy customers.
Four technologies are currently covered by the REFIT, though other technologies will be considered for inclusion within the year. For 2009 REFIT embraces Wind, Small Hydro (less than10 MW), Landfill Gas, Concentrating Solar Power (CSP), and is not applicable to off-grid operations, with payments being differentiated according to each technology. An agreement will last for twenty years. For the first five years of the REFIT, a full review of the arrangement will take place yearly, after which it will take place every three years.
Switzerland
Back in 2005 the Swiss government set a goal to achieve 10% energy production through renewable energy systems. By 2007 the Electricity Supply Act offered a feed in tariff option. Switzerland's FITs encourage the deployment of renewable energies including Bioenergy, Geothermal, Hydro-power, Solar Photovoltaic and Wind. Revised FIT policy was developed in the spring of 2008 and came into affect on January 1, 2009 and is financed by a grid levy. Applicants could start registering for the newer FIT program in May 2008, and a staggering 84% or applicants where Solar, and a waiting list just for Solar was created.
The payments are made for periods of 20 to 25 years, depending upon the technology. The tariffs will apply to new installations (built after 1 January 2006), as well as expanded and renovated installations. Feed in Tariffs are capped based on the calculated available monies, creating a natural check and balance.
Resources
If you would like to read more about Feed in Tariffs and related policy around the world, here are a few more places that provide excellent info:
photo courtesy ecav. Portugal solar park
- Tariff Watch - PVTech.org - One of the best news websites for Solar and Renewable energy news providing ongoing special coverage on Feed in Tariffs specifically
- Wind-Works - Paul Gipe - Paul writes, lectures, is a renewable energy analyst and an advocate for feed in tariffs in North America. He started working with wind energy in 1976 and shares a wealth of information on his website wind-works.org, largely through personal experience
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