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Renewable Tariffs and Standard Offer Contracts in the USAMay 7, 2008 Since the fall of 2007 several states have introduced bills into their state legislatures that, if enacted, would create Renewable Energy Sources Acts like those in Europe. Links to those proposals can be found below. In addition, there will likely be bills introduced at the federal level in both the House and in the Senate during 2008. A number of states have have introduced programs patterned after Renewable Tariffs in Europe. However, there are significant differences between true Renewable Tariffs and many of the Production-Based Incentive programs in the USA. For a brief discussion see Performance-Based Incentives or Renewable Tariffs for Photovoltaics in the USA.
USA
CaliforniaWonders never cease. The state where Renewable Portofolio Standards were born is formally asking if there may not be another way to develop renewable energy. In light of the states aggressive carbon dioxide targets (AB32) and the state's lagging development of renewables, there's a growing sense that the state may have to switch course. Still, this is fractious California and any significant change will require years of debate, and mind-numbing regulatory proceedings. For an engaging account of how California became a renewable energy power house in the early and mid 1980s see Dynamos and Virgins. Below are several pdf files from the California PUC California's Historical Standard Offer Contracts. Standard Offer #1 contracts are labeled SO1 and so on.SO1 through SO3 paid $0.069/kWh for years 1-10, then paid avoided cost. SO4 contracts lasted from 15 to 30 years. Most opted for 30 years with first 10 years providing fixed prices.
In 2002 the Sierra Club (USA) endorsed the use of Electricity Feed Laws as a policy mechanism for spurring greater renewable energy development in the USA. In January 2005 California introduced a timid renewable tariff for solar PV under the unwieldy title of "Performance-Based Incentive". The tariffs are an alternative to the main solar Buy-Down program. Here are some key elements.
FloridaMay 7, 2008 On March 14, 2008, the Florida Solar Energy Industries Association (FlaSEIA) endorsed a legislative policy effort to adopt a Production Based Incentive (PBI) mechanism to encourage the wide spread deployment of solar and renewable energy in Florida. The FlaSEIA Board of Directors unanimously concluded that the most cost-effective legislative policy tool to deliver the rapid deployment of solar energy, while ensuring a healthy and sustainable industry in Florida, are energy feed-in payments or Production Based incentives (PBI). Since FlaSEIA's decision endorsing Florida feed-in tariffs, several other organizations have followed suit.
HawaiiDuring the 2007 session of the Hawaii state legislature Erik Kvam of Zero Emissions Leasing drafted a bill modelled after Germany's EEG (the Renewable Energy Sources Act), the German electricity feed law. Senate Bill 1223 was introduced by Senator Ron Menor, chairman of the Senate Energy and Environment committee. A companion bill was also introduced into the Assembly. The Senate bill was heard but not reported out of committee. Kvam plans to re-introduce the bill in the 2008 session. According to Kvam, "there's real interest here" (Hawaii) on both sides of the aisle and "everyone wants to be seen as out in front on this." SB 1223 or the Solar Energy Electricity Feed-in Tariff specifies a solar PV tariff of US$0.70/kWh for 20 years. Kvam says he arrived at the tariff by incorporating the federal tax subsidy and solving a cash flow model for an internal rate of return of 15% after tax. He notes that not unsurprisingly this is similar to the current German solar PV tariff. IllinoisMichigan
Minnesota
OregonTwo of Oregon's Wind Working Group meetings, one in the fall of 2004, and one in spring 2006, have included discussions of Advanced Renewable Tariffs. However, Oregon adopted a Renewable Portfolio Standard and abandoned any movement toward renewable tariffs. Rhode Island
Washington StateIn March 2005, the Washington State Senate passed a bill creating a renewable energy tariff for solar photovoltaics (PV). Then in May the legislation passed the Assembly, a first in North America.
Wisconsin
Both WE Energies and Madison Gas & Electric have small renewable tariff programs. While limited they are another example illustrating that the concept is not foreign to North America.
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