Feed-In Tariffs: Selling Back to the Grid

Feed-In Tariffs: Selling Back to the Grid

Posted on 07. Aug, 2009 by in Technical

When I heard that German citizens and entrepeneurs could make money by selling excess renewable energy back to the utility companies, I said, “Well why aren’t we doing that here?” Apparently, PG&E has no plans to do this, although the smart-grid metering should be able to record how much power is put back as well as how much is used. A closer look showed that Germany enacted this by law rather than waiting for the utilities to do it themselves. In this country it’s being enacted by individual localities such as Gainesville, FL.

Basically a feed-in tariff is a government mandate that requires utility companies to pay above-market rate for “green” power for a specified period of time after installation. This means that anyone from an ordinary homeowner to an entrepeneur who wants to build a commercial green power plant can jump into the game.

Nellis Air Force Base solar panels (Credit: U.S. Air Force photo/Airman 1st Class Nadine Y. Barclay)

Nellis Air Force Base solar panels (Credit: U.S. Air Force photo/Airman 1st Class Nadine Y. Barclay)

It’s not exactly a free-market, though. The German system fixes tariffs for approved renewable energy projects for a 20-year period from the plant commissioning and then applies incremental price cuts. Eventually the incentives and preferential rates go away, but by that time Germany might have enough of a renewable infrastructure in place that they would be far less vulnerable to sudden price increases in fuel.

Opponents say that it’ll raise everyone else’s rates. But by how much? Gainesville expects an average increase of .05%. And, one advantage of having homes which are grid-tied but also standalone is decreased vulnerability to infrastructure damage from earthquakes or other disasters.

So… why aren’t we doing more of that here? PG&E already charges the highest rates in the country, positions itself as a leader in energy conservation, and yet it hasn’t even considered this idea.

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