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The Missed Opportunity of the Feed In Tariff
Much has been made of the proposed Feed In Tariff for renewable energy for Hawaii. Unfortunately, the Feed in Tariff is another example of a policy that draws big headlines but does little to move the State
toward energy independence.
For those of you unfamiliar with the term, a Feed In Tariff (or FIT) is type of incentive used to encourage the development of renewable energy. A FIT mandates a local utility to purchase electricity generated from a renewable energy system owned by a customer at a predetermined rate for set period of time. The rate the utility will pay for electricity is typically set higher than the current utility rates to give the customer an incentive to develop the renewable energy system.
Unfortunately, the FIT as proposed in dockets currently in front of the PUC is a FIT in name only. It does not contain any of the basic features that make FIT in Europe so successful. Specifically, there is no
mandate in the Hawaii FIT that compels the local utility to purchase power from the customer. In the current proposal, the utility will get to decide who, what, when, where and how much electricity it wants to purchase. Second, the rates currently proposed for the FIT are at or below current retail rates for electricity. Therefore there is no incentive for customers to sell power to the utility when the utility is just going to turn around and sell the power back at a higher rate. Customers will be better off using the power they generate themselves. Finally, the FIT rates are fixed for 20 years. So as utility rates continue to rise, customers lose more and more money as the rate at which a customer gets paid for power stays the same.
Until the elected officials become more interested in results than headlines, we are unlikely to make significant inroads toward energy independence in the near future.
Tags: feed, in, photovoltaic, renewable, solar, sustainable, tariff
Comment
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Comment by Keith Cronin on February 20, 2010 at 11:52am -
It seems that countries like Germany that took a bold initiative and implemented action that was the seeds of their successful program. Sure, they had some bumps in the road, but they clearly demonstrated that it is possible to do solar in a place that has about as much average sunlight as Vermont!
Our latent utility industries are steeped in tradition and it appears they are slow to change, like trying to move the titanic away from the iceberg. Energy policy in our country is outdated and in need of a significant overall.
If anyone recalls, back in 2001, when 9/11 was the focus of our attention spans, our President encouraged us to go out and shop and do the things we all are used to doing to squelch our concerns amongst other things. Well, one of the initiatives was to encourage folks to go out and buy vehicles over a certain gross vehicle weight- aka, the Hummer. This was going on while we were in Iraq and the incentive has now dissipated. But if you consider the consequences of one simple piece of legislation and the tax deduction associated to the action, it missed the mark. It incented the wrong behavior and furthered us from our dependence on imported petroleum. It was like giving the addict more heroin and it could be now bought legitimately at the corner store!
Sorry to be making a long winded point, as it isn't intended to be incendiary to folks that own/owned Hummers, but more of an example of how public policy can shape the future: the only question is how it will shape the future and the detritus it leaves in its wake.
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Comment by Konstantin A Lukin on February 19, 2010 at 3:37pm -
Until the elected officials become more interested in results than headlines, we are unlikely to make significant inroads toward energy independence in the near future.
Just wondering, what is the motivation for elected officials to be more interested in results than headlines, especially if some long-term results are only visible after their term is over? Making sound headlines seems like a logical enough alternative to keep it rolling.. :)
Also, why is it that if long-term results have solid projections, should headlines say any different? Is media trying 'too hard' to make living?
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Comment by Daniel Leuck on February 18, 2010 at 6:52pm - Interesting post. Its unfortunate that our FIT bill lacks the features that made Europe's programs successful. How did that happen?
© 2010 Created by Daniel Leuck.
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