Solar Alliance Takes Positive Position on Feed-in Tariffs

...from Paul Gipe

October 20, 2009

The Solar Alliance, the US industry trade association for solar PV manufacturers and project developers, has recently posted a position paper supportive of feed-in tariffs (FITs) to their web site.

While the industry is portraying the move as a natural evolution of its position, outside observers see it as a major policy development in the US. Previously, board members were split on whether to take a position on feed-in tariffs. Some key industry players openly opposed supportive statements on the policy used so successfully in Europe to install thousands of megawatts of solar PV as well as other renewable energy technologies.

The Solar Alliance is one of several organizations promoting solar PV in the US. The Solar Energy Industries Association, which represents the broader solar industry, has yet to take a formal position on feed-in tariffs. The American Solar Energy Society, representing the professional and academic community, also has not taken a position.

The Canadian Solar Industries Association has previously endorsed the use of feed-in tariffs. (See CanSIA Calls for Dramatic Growth of Solar PV in Ontario Through Higher Tariffs.) CanSIA specifically has called for a system of feed-in tariffs to be used in Ontario to supply 10 percent of the province's electricity (~16 TWh per year) by 2025.

The Solar Alliance's position paper begins with a simple statement: "FITs are often misunderstood but can be useful policy tools".

The document goes on to reiterate the Alliance's continued support for net metering and traditional tax subsidies to reassure readers that their position on feed-in tariffs should, in no way, detract from existing programs. The policy paper says the generator should be given a choice of which program to use where feed-in tariffs and other policies are available simultaneously.

The Alliance then lays out the characteristics necessary for successful feed-in tariff policies. This is as succinct a statement of feed-in tariff best practice as found anywhere. For example, the Alliance states that contracts should be for 20 years, though they acknowledge that some states may offer shorter terms, and that tariffs should be differentiated by technology and project size. The recommendations also include provisions for developing green field sites and not just those by "site owners" or existing utility customers.

However, the position paper limits the Alliance's support for feed-in tariffs to projects only up to 20 MW. There are a number of solar PV projects larger than 20 MW currently operating in Europe and there are many wind and concentrating solar power projects greater than 20 MW as well that have been installed with feed-in tariffs.

The position paper also doesn't specifically mention that feed-in tariff best practice requires tariff setting based on the cost of generation plus a reasonable profit. The Alliance only says that the tariffs should recognize the value of Renewable Energy Credits separately from energy.

The Alliance's paper represents the first clear statement by the association that feed-in tariffs would be an acceptable policy in the US.

Download
Solar Alliance Policy Recommendation: Feed-In-Tariffs