Incentive For Solar (8)-Feed-In-Tariff


Greetings, Fellow Sunshine Lovers & Supporters for Solar Energy,

Firstly, Happy Mother’s Day!

If you are in favor of renewable/CLEAN energy, please sign the petition page showing support for FIT/CLEAN Program at Thank you.

Sorry about the delay of this week’s postings…I tend to procrastinate when the issue seems to carry more weight in my heart…for I sincerely believe the thorough implementation of optimal Feed-In-Tariff (FIT) for solar and all other renewable energies have the potential of accelerating our transition into renewable energy era at such an incredibly tremendous pace that it will help to bring down the cost of solar technology like you won’t believe! It had both perplexed and troubled me how snail- paced Feed-In-Tariff (FIT) had been spreading/implementing within US, considering the fact that the first form of feed-in-tariff was actually implemented in US in 1978, under President Jimmy Carter’s administration, telling Americans that the energy crisis was a “clear and present danger to our nation” and drew out a plan to address it. Thirty-three years later, here we are now, in 2011, when feed-in-tariff had been enacted in more than sixty four other countries including Australia, Austria, Belgium, Brazil, Canada, China, Cyprus, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, India, Iran, Republic of Ireland, Israel, Italy, the Republic of Korea, Lithuania, Luxembourg, Mongolia, the Netherlands, Portugal, South Africa, Spain, Switzerland, Thailand, Turkey, UK, while only about a dozen states in the United States, have implemented this fantastic policy mechanism designed to encourage the adoption of renewable energy sources and to help accelerate the move toward grid parity (grid parity is the point at which alternative means of generating electricity is at least as cheap as grid power.)

Put it simply, Feed-In-Tariff is an incentive policy that requires the power company to buy renewable energy from any one who produces it. No matter how small the producer is, the power company has to buy the renewable energy from the producer. Different tariff rates are set for different renewable energy technologies, linked to the cost of resource development in each case.  Typically, FITs include three key provisions:

  • guaranteed grid access
  • long-term contracts (often 15-25 years) for the electricity produced
  • purchase prices that are based on the cost of renewable energy generation and tend towards grid parity

The cost based prices therefore enable a diversity of projects (wind, solar, etc.) to be developed while investors can obtain a reasonable return on renewable energy investments.  This principle was first explained in Germany’s 2000 RES Act:

“The compensation rates…have been determined by means of scientific studies, subject to the provision that the rates identified should make it possible for an installation – when managed efficiently – to be operated cost-effectively, based on the use of state-of-art technology and depending on the renewable energy sources naturally available in a given geographical environment.” (RES Act 2000, Explanatory Memorandum A)

In 2008,  the European Commission concluded that well-adapted feed-in-tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity.  This conclusion is also supported by International Energy Agency, the European Federation for Renewable Energy, and Deutsche Bank.

Now I would like to share with you a video clip on discussion (of New America Foundation) of a panel of Americans who have seen and learned from the experience of other countries with Feed-In-Tariff (at


Countries with the best policies (such as Feed-In-Tariff) tend to be able to attract more investments and ultimately leading to better local economy and job opportunities. It does appear to me, that if US would be able to implement Feed-In-Tariff effectively, there would be a better chance for US to regain its leadership position in renewable energy world.


Posted by sunisthefuture-Susan Sun Nunamaker,
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3 Responses to “Incentive For Solar (8)-Feed-In-Tariff”

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  2. Dawna Hains Says:

    Hello. Thank you for writing this blog. That helped me alot.

  3. Cathi Brandeis Says:

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