October 22, 2008 By Elaine Rundle
After a trip to Germany to learn about the country's successful integration of solar power into the electricity grid, a Gainesville (Fla.) Regional Utilities manager discovered the feed-in tariff incentive.
Germany's feed-in tariff allows customer-owned solar power to be fed directly into the electricity grid. The country purchases the power directly from producers at a fixed rate above the market value, therefore encouraging public and private investment in renewable energy. The goal is to make solar energy production competitive and possibly even profitable. Gainesville Regional Utilities (GRU) would buy all photovoltaic-produced energy for 20 years at a guaranteed rate per kilowatt hour.
According to The Gainesville Sun, the feed-in tariff plan was presented to city commissioners on Oct. 13, 2008, and Gainesville was encouraged to create an ordinance for future review.
"That was the first step," said John Crider, utilities analyst of the GRU's Strategic Planning Department. "It was pretty well received by the commissioners and the public. So our next step is to actually develop a formal ordinance and bring it back to the commission for their approval, and that's the stage we're in now."
Currently Gainesville's solar power incentive is based on paying cash rebates for photovoltaic installations. "If you put up a solar PV system in Gainesville, GRU will pay you $1.50 per watt as a lump sum rebate to put up your solar," Crider said. "The state of Florida pays $4 a watt; the lump sum rebate is pretty common across the U.S. But that just pays basically for the equipment. So if you buy and install PV equipment you get a check as a rebate, but it doesn't guarantee any performance at all. If you never plug that system in, if you never generate any electricity, you still got your rebate."
The feed-in tariff would guarantee payment for 20 years based on each kilowatt hour produced. Crider said determining the payment rate has been the big question. First, GRU determined how much it currently pays owners, including through the net-metering method, which pays owners for electricity they produce but don't use.
"We generated a per-unit cost of what the current system costs us to do the incentive, and then worked it backward and said, 'Well, what if we replaced it with the feed-in tariff, what would the cost equivalent be?'" Crider said. "And that's when we came up with the number of 26 cents for our particular case."
One advantage for the city is that the feed-in tariff doesn't care what arrangement is behind each solar installation. GRU would pay for the electricity no matter whether the installations are privately or publicly owned or if multiple people own it.
According to Crider, four states are considering state-level feed-in tariffs, including Michigan, Maine, Rhode Island and Illinois. There's also federal legislation under consideration. No one has deployed the incentive yet, but GRU hopes to get the city commission's approval to start by the end of the 2008.