1st Solar Symposium: Feed-in Tariff for California First

Focus on Feed-in Tariffs (FiT) at the state level for solar.

[San Francisco, California USA]

On the eve of Intersolar North America 2008, Monday, July 14, 2008, I managed to attend the 1^st Solar Symposium sponsored by the German American Chamber of Commerce (GACC), California Branch. Although the 1st GACC "Solar Symposium" Fully Booked - International Audience Expected, I was able to jump from the wait list to an attendee despite my over aggressive accreditation tactics.

Before lunch, SEIA (Solar Energy Industries Association) President Rhone Resch presented “The US Prior to the 2008 Presidential Elections - Status and Perspectives of Solar Promotion on a Federal Level”. The ITC (Investment Tax Credit) myopia continues as HR 6049 is supposed to be coming up for another vote in the Senate soon. There was no mention of the first national Feed-in Tariff bill, HR 6401 Renewable Energy Jobs and Security Act, introduced by U.S. Representative Jay Inslee (D-WA). Please see PVSC 33 Opens and Feed-in Tariffs: Solar FiT for the USA for related posts.

In the afternoon, the Panel Discussion, "International Perspectives: What are the Most Promising Incentives to Develop the US Solar Market", tackled opposing views on the status quo of rebates and ITCs versus the market proven German Feed-in Tariff model. The panel was moderated by:

• V. John White, Executive Director / CEERT, CENTER FOR ENERGY EFFICIENCY AND RENEWABLE TECHNOLOGIES

and included:

• Adam Browning, Executive Director / The Vote Solar Initiative
• Professor Eicke Weber, Director / Fraunhofer Institute for Solar Energy Systems (ISE)
• John L. Geesman, Former Commissioner / California Energy Commission
• Rhone Resch, President / SEIA (Solar Energy Industries Association)
• Gerhard Stryi-Hipp, CEO / German Solar Industries Association
• Helmut Gehle, Sales Director, Solar Technologies / Schuco USA LP

Adam Browning kicked off the discussion with his presentation, "US Solar Market - Policy Drivers". In his opening, Mr. Browning said:

When it comes to Energy policy much of it is lead at the state level rather than at the Federal level. Most of the most critical electricity related rules and regulations are set at a state level.

This observation was echoed by many panelists who advocated activity at the state level over complex and protracted energy policy legislation at the Federal level.

However, a misleading comparison of Rebate programs with net metering versus the Feed-in Tariff model is shown in the slide above titled “Avoided Utility Purchases with Marginal Incentives vs. Feed-in Tariffs”.

Adam Browning said:

…From a policy maker’s perspective we are looking at what is the amount of public funds, the above market cost, that they are going to need to have to provide to a program in order to make that program work, give a financially interesting proposition to people who want to go solar.

Under this particular model, most of the value comes from avoided utility purchases and you give an incentive that is just the marginal difference to get to an economically interesting proposition.

Under a Feed-in Tariff, you must provide the full value of that electricity and from the policy maker’s perspective that often looks like a much larger amount which makes it harder to do.

This perpetuates Adam Browning’s flawed Feed-in Tariff versus Marginal Incentive article refuted by Michael Hoexter in Feed-in Tariffs: Getting off the Renewables Roller Coaster, both found at RenewableEnergyWorld.com.

V. John White said:

Despite all the noise from California, if I may be blunt, the truth of the matter is 95% of all renewable megawatts in this state were built in that period (1980’s). In the entire 15 years since then, most recently since the 2002 passage of the Renewable Portfolio Standard, the 20% standard by 2017 which has since now been advanced to 2010. We are not much closer to that goal than where we started. We have In fact lost ground from about 12% to 11%.

Professor Eicke Weber said:

I think our goal should be exactly like you (John White) said; the fastest possible introduction of the largest possible quantity of renewable energy.

And now let me again make my pledge why the Feed-in tariff works, the German model. The reason is it is not based on people who like PV and who are happy to get a tax credit to get a lower priced PV; this is nice, and nobody would be against it. But the key issue is to provide an interesting investment proposal, a business plan, so that anybody can sit down and say my roof has this size I can produce 5kW (kilowatt) of PV. It means at the end of the day when I have paid down the system I get each month a paycheck.

Net metering is wrong. Net metering is the wrong way. Net metering means the best you can achieve is bringing your utility bill to zero. And this is just against what we all try to do on the energy savings side.

Energy efficiency and conservation efforts do not scale with net metering as noted in my AB 1920: California bill goes beyond Net Metering post.

John Geesman said:

As a consequence, I don’t think it’s too much of a stretch in terms of normal governmental authority to see the logic of Feed-in Tariffs. Now there are those that will differ. They will say that’s delegating to the states an awful lot of authority. I’m here to tell you in my adult lifetime, national energy policy as much as I have known about it, has almost consistently been headed in the wrong direction. And I put a lot more comfort in seeing those decisions made by the states.

Although I’m not sure when he arrived, John Garamendi, Lieutenant Governor of California, was intensely interested in the afternoon panel discussion and closed the symposium with a speech waxing fluent about Feed-in Tariffs. Lieutenant (Lt.) Governor Garamendi said:

I like what Germany has done with its Feed-in Tariffs; they apparently worked. We could try all kinds of models, but it seems to me we start with a model that works.

He encouraged the panelists to reach a consensus and work to get a FiT policy in place for California. The Lt. Governor Garamendi also observed California policies at the city, county, and state levels need to be integrated and aligned to achieve the goal of transitioning from fossil fuels to clean, renewable energy.

Last year when I asked the Lt. Governor about Feed-in Tariffs for renewable energy at the 2007 CCTO Competition (please see California Clean Tech Open 2007 Kick-off Event Wrap up), they were not at forefront of his considerations. 1st “Solar Symposium” of the German American Chamber of Commerce an Immediate Success has additional quotes and the GACC’s perspective.

Although they claimed to have FiT policy efforts, CALSEIA (California Solar Energy Industries Association) did not respond to my requests for details about their proposed approach to a California Feed-in Tariff for solar.

California has an immaculate convergence of great solar resources, sustainability and environmental awareness, renewable business ventures, and progressive political support to Go Big Solar driven by a German style Feed-in Tariff. Is a foolish name change to Freedom Tariff or Energy Independence Tariff needed before we can adopt sound renewable energy policy as our own?

Feed-in Tariffs: Solar FiT for the USA

End the ITC (Investment Tax Credit) Myopia and expand the United States Solar Policy agenda.

With the Washington International Renewable Energy Conference (WIREC 2008, Agenda) coming up this week, it seemed appropriate to jump into the US solar policy and incentive debate.

Repeated lobbying efforts by the Solar Energy Industries Association (SEIA), the US national trade association for the solar industry, have failed to pass an extension to the solar Investment Tax Credit in last year’s Energy Independence and Security Act and the recent Economic Stimulus Act of 2008. Future SEIA efforts continue to focus on the myopic pursuit of the elusive ITC extensions. Please see Solar Sharpens Weapons for Incentive Battle and Solar Industry's Five-Step Plan for background information.

Per Renewable tax credits likely to run out, leaving investment at home hanging by Chris Morrison at VentureBeat, the inside scoop is the ITC extension will not happen until the next US Presidential administration in 2009.

Given all this focus, is the ITC the best method to promote and incentivize the adoption of solar energy and photovoltaics in the United States? In fact, the answer to this question is a resounding No.

The European Photovoltaic Industry Association (EPIA), the European equivalent of the SEIA, has documented Winning Policies for Solar Electricity gleaned from Germany’s photovoltaic and renewable energy success story driven by their groundbreaking Renewable Energies Sources Act 2000 and EEG 2004 (Erneuerbare Energie Gesetz 2000, EEG 2004).

The EEG guarantees the rate paid for photovoltaic solar electricity generated and fed into the grid for a period of twenty years from the time of installation and interconnection. Rate payers (business and residential electricity customers) fund this program through increased electricity costs per kiloWatt-hour (kW-h). This is not tax money collected and dispersed by the national or state governments but handled under a legal framework by the utilities and grid operators as shown in how the feed-in tariff works in practice. As first exposed in Feed-in Tariffs: Getting off the Renewables Roller Coaster by Michael Hoexter with Californians for a Feed-in Tariff Working Group, Adam Browning of Vote Solar has made erroneous claims about the cost of the EEG in Feed-in Tariff versus Marginal Incentive, both found at RenewableEnergyWorld.com. Per the Solar Generation IV – 2007 report developed by EPIA and Greenpeace:

In Germany, the monthly extra costs per consumer due to the premium tariff for solar electricity are currently €0.20. The result is also that every electricity consumer contributes to the restructuring of the national electricity supply network, away from a fossil-based one, and towards a sustainable and independent structure.

This EPIA press release, Feed-in tariffs make solar photovoltaic electricity more and more competitive, highlights the key provisions of successful Feed-in Tariffs:

• Guarantees the price of PV solar electricity without depending on the State budget. It is indirectly paid by all electricity customers and enables every consumer to promote the development of renewable energies through its monthly electricity bill.
• Secures financing for PV system; a feed-in tariff established by law will serve as a guarantee for individuals willing to purchase a PV system.
• Encourages cost reduction; the constant reduction of the feed-in tariff for new systems connected to the grid will put pressure on the PV-industry to bring down costs.
• Forces the industry to significantly improve performance; the return on investment depends on the performance of the system and customers will opt for systems with highest return.

Germany’s success with the Feed-in Tariff model for photovoltaics and renewable energy has encouraged Spain, Italy, Greece, and France to adopt similar Feed-in Tariff laws to promote the adoption of solar generated electricity. After taking steps to improve and streamline grid access (Access to the grid: A precondition for the solar photovoltaic market to take-off), Spain emerged as the fastest growing market for photovoltaics in 2007.

A quick survey of the SEIA and the Vote Solar Initiative, Solar Nation, and the Solar Alliance activist websites finds nary a mention of Feed-in Tariffs. Perhaps they never read this San Francisco Chronicle OPEN FORUM article, The future is just overhead, by Professor Eicke R. Weber, Director of the Fraunhofer Institute for Solar Energy Systems (ISE)?

Solar Power 2007: Second Golden Meter Award Winner

Colorado Public Utilities Commission honored with the 2007 Golden Meter Award

Wednesday evening in the Press Room at Solar Power 2007, Ron Binz, Chairman of the Colorado Public Utilities Commission (CPUC), was presented the second Golden Meter Award For Excellence in Net Metering Rules by Claudine Schneider, President of the Solar Alliance. See the official press release from the Network for New Energy Choices in Golden Meter Awarded at Solar Power 2007.

The authors of the Freeing the Grid 2007 report (download the summary), the Interstate Renewable Energy Council (IREC), the Network for New Energy Choices (NNEC), the Solar Alliance, and The Vote Solar Initiative, selected Colorado for crafting a best practice net metering policy.

In his acceptance speech, CPUC Chairman Ron Binz said:

We think we're doing things right in Colorado and it's great to have our hard work cited by these groups. With the leadership of Governor Ritter and the Legislature, we're creating a good environment for solar and wind power.

Colorado Governor Ritter has delivered on his New Energy Economy vision by building upon Amendment 37 and doubling the Renewable Energy Portfolio standard for investor owned utilities to 20% by the year 2020. No longer exempt, municipal utilities and rural electric providers are required to generate 10% of their electricity from renewable sources by 2020.

Colorado has vaulted from an NNEC net metering grade of “F” to an “A” tying New Jersey for the top spot in the US. Please review State Report Cards & Profiles for your state’s ranking.

For the first time ever, GUNTHER Portfolio is ranked number one (#1) on the regional TOP 50 Solar United Kingdom index. This has been a long journey, but the tougher part will be staying there.