Feed-in Tariffs for Solar Continue To Spread (NY Times Article)

7/23/2009

Felicity Barringer

Variations on the policy that jumpstarted Germany’s decade-long boom in rooftop solar systems are taking root in more cities in the United States.

The policy, called a feed-in tariff, offers small-scale producers of solar energy long-term contracts (usually at above-market rates) for the electricity they sell. Last week, the Sacramento Municipal Utility District, which serves 1.4 million people, approved a feed-in tariff that allows homeowners with solar panels a chance to sign up for 10, 15 or 20 years of guaranteed payments. The policy will take effect next January. The city of Gainesville, Fla., adopted a feed-in tariff this spring, as did Vermont. Washington state also has such a policy, and Hawaii is currently considering one.

While feed-in tariffs are most closely associated with solar photovoltaic panels, utilities managing the programs in Vermont and Sacramento will also pay a set price for electricity generated from other renewable sources, like wind.

The Sacramento program is open to homeowners who are not participating in another program, called net metering, which allows anyone whose system is producing more electricity than they need to sell the excess back to the utility, thus reducing their electric bill. But once their bill falls to zero, the homeowner gets no more money from the system.

Jon Bertolino, a spokesman for the Sacramento utility, said that customers with land to spare had been asking whether, if they put up small solar farms, the utility would buy the excess electricity.

As long as they are not part of the net-metering program and not seeking the $2.80$1.90- to $2.20-per-watt ratepayer subsidy for their new panels under the state’s “Million Solar Roofs” program, Mr. Bertolino said, small generators can sell their power to S.M.U.D. The rates would depend on the time of day the power is generated, ranging from a low of 5 or 6 cents a kilowatt-hour to 30 cents on a hot summer afternoon; the size of eligible systems is capped at 5 megawatts (and the program overall has a 100-megawatt cap).

The Vermont law caps the size of individual systems at 2.2 megawatts. Solar energy fetches a fixed price of 30 cents a kilowatt-hour, and other forms of renewables fetch lower rates.

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