The Feed-in Tariff program is a policy tool that guarantees payment for the energy you generate using your solar panel array. It works by allowing you to have a guaranteed price for your energy, as well as access to grid services. This policy promotes renewable energies and is easy to use.
Feed in tariffs can guarantee payment
Feed in tariffs are a way to pay producers of renewable energies for their efforts. These schemes are used throughout Europe for years to encourage renewable energy growth. They differentiate payments according to size and technology, and are intended to decrease over time. Germany, for example has been using feedin tariffs for over a ten year to increase renewable energy.
They promote the development of renewable energy sources
Feed in tariffs promote the development and use of renewable energy by lowering their cost. This makes renewable energy sources less expensive than conventional energy sources. Once renewable energy is cost competitive, feed-in tariffs no longer are necessary. Feed in tariffs can be short-term or long-term, depending on the ambition of the country. The main objective is to reduce greenhouse gases emissions and encourage the development of renewable energy.
These are often used in conjunction other solar incentives
Feed in tariffs allow residential solar customers to offer their excess solar power at a discounted rate to the market rate. Originally introduced in 2006, this incentive has helped the solar industry expand by 50 percent annually. Feeding-in tariffs apply to both residential as well commercial solar installations.
They are an easy policy instrument
Feeding in tariffs have been proven to be a powerful policy tool for promoting renewable energy technology and production. They provide grid access, long-term contracts and a guaranteed price of the energy produced. A proportionate compensation is also guaranteed for producers who use the energy resources. This policy instrument has been used in a variety of countries around the world.
They are administered by the government
In order to promote renewable energy production, feed-in tariffs have been implemented by the government. These programs provide guaranteed grid access, long-term contracts and cost-based purchasing prices for energy producers. These programs also require that energy producers produce energy from renewable sources, which are credited to RPI. These programs are currently used all across the United States and worldwide.
They are inefficient financially to reduce carbon.
The feed-in tariff system compensates you for the excess electricity generated. It is based on your household consumption and has a cap of 50% of total production. This excess electricity can be stored, which in theory will reduce your electricity bill. But this approach is not without its problems.