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08/04/2009 12:31 PM     print story email story  

U.S. Representatives Working on Feed-in Tariff

SustainableBusiness.com News

Representatives Jay Inslee of Washington and Bill Delahunt of Massachusetts plan to introduce a bill in the U.S. House of Representatives that would create a feed-in tariff for renewable energy. 

A feed-in tariff would require utility companies to purchase renewable power from small-scale developers at a rate that provides a guaranteed premium above the cost of production. 

Germany's solar feed-in tariff has been largely responsible for the country's rise to prominence in the solar industry and some states and municipalities are introducing their own feed in tariffs. 

Inslee proposed a similar bill in the House last year.

"We have some brilliant Americans with brilliant business plans with brilliant technologies, but they don't have financing," Inslee said at a briefing last week. "The charm of the feed-in tariff is solid, take-it-to-the-bank security and confidence for the investing community." 

Feed-in tariffs have the potential to provide broader support to renewable energy development than a renewable energy standard (RES), such as the one proposed in the Waxman-Markey climate bill. 

An RES, which requires utilities to provide a certain percentage of renewable power, encourages those companies to pursue the cheapest renewable energy sources.

A feed-in tariff could provide support to all forms of renewable energy in the short term, allowing them to reach economies of scale, thereby driving down prices. 

China recently announced a feed-in tariff for wind power. And California's Sacramento Municipal Utility District (SMUD) has established a feed-in tariff (FIT) that will go into effect next January. 



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