Feed-in Tariffs in North America

Solar Energy: A Solution to Environmental Problems?

George Washington University Institute for Analysis of Solar Energy

Wilson RickersonApril 24th, 2009

Feed-in Tariffs Worldwide

National Feed-in TariffsRegional Feed-in Tariffs

Source: REN21. (2009). Renewables Global Status Report: 2008.

Federal Feed-in Tariff (Inslee, D-WA)

The FIT Landscape

14 States with legislation

8 states with Gubernatorial or regulatory initiatives

$0.0000 $0.0002 $0.0004 $0.0006 $0.0008 $0.0010 $0.0012 $0.0014 $0.0016 $0.0018

Rebate/SREC

SREC Only

Underwriter Model 15y

Commodity Market Model

Auction Model

15 Yr Tariff Model

Hybrid-Tariff Model

$/kWh

Ratepayer ImpactsWgt. Avg. by Project Type

FITs and RECs

Source: Summit Blue (2008)

The banking crisis

…creates new uncertainty

(end 2007)

Feed-in

ROCs / RPS

PTC

Leverage (debt, %)

>90%

70-80%

60-80%

50-70%

75%

???

Maturity (after completion)

15-18y

13-15y

13-15y

Mini-perms

12y

???

Margins

60-100pb

170-200bp

90-120pb

200-250bp

100-125pb

???

The impact will differ by regulatory mechanism

So what could FITs be used for?

•Transmission expansion

•Smart grid-ready generation

•Distributed generation

•Community ownership

Interaction with the Federal Power Act

“The Commission lacks wholesale price-setting authority, as the Congress and the Federal Energy Regulatory Commission…have preempted the State from asserting such authority…”

- Southern California Edison in CPUC FIT proceeding