Feed-in Tariff Legislation
Last updated: Thursday April 02, 2009

We have proposed legislation that would enact a feed-in tariff bill known as "The Maine Renewable Energy Sources Act" in the Maine Legislature.  The bill is in final re-drafting at this time.

Rep Herb Adams (D-Portland) is the sponsor of the bill and the Majority Leader John Piotti and Speaker of the House Hannah Pingree are among the cosponsors. The joint committee likely to get the bill is Utilities and Energy.

People should support the bill by speaking up in favor of it when a number is assigned at the hearing (to be announced) and especially, even now, by contacting the members of the committee (e-mail is good and it gets read, especially from a constituent).

A number of public forums on the upcoming legislation are scheduled around the state, check the Calendar page for an event near you.

Feed in Tariff in the news

A comprehensive report on the state of Feed in Tarriff legislation in the US has been released: 
Feed-in Tariffs and Renewable Energy in the USA - a Policy Update

WEB SITES WITH FEED IN SOLAR ENERGY AND TARIFF NEWS:

Red, Green, and Blue - environmental politics from across the spectrum
Renewable Energy World
Solarbuzz
BusinessGreen.com

WHAT IS A FEED-IN TARRIFF LAW?
(download a pdf version of the text below)

The MAINE RENEWABLE ENERGY SOURCES ACT: a feed-in law for Maine

WHAT IT IS
The Maine Renewable Energy Sources Act (MRESA) is designed to encourage the development of distributed, renewable energy-based power generation, jobs creation and economic development.

MRESA is a market based alternative to tax-financed incentives. At its core, it consists of market-rate payments per kilowatt-hour for electricity generated by a renewable resource, enshrined in long term contracts between grid operators and qualified generators. It has a built-in efficiency-incentive because, unlike with grants and tax credits, its beneficiaries are paid only for the power they actually deliver to the grid.

With MRESA in force,
· utilities pay a set price for renewably generated power, regardless of the amount of power they generate
· the price is locked in by long term contract
· the price is reduced with each new starting year providing an incentive to act sooner rather than later
· the price is set independently from the retail rate, on the basis of what power from a typical renewably powered generator would cost: (cost of system/probable output)
· to turn a profit, the citizen-producer only has to make sure the system performs well

WHAT IT DOES
MRESA
· introduces a market-based incentive which will phase out when no longer needed
· does not depend on tax dollars
· creates a large number of non-exportable jobs
· offers a predictable rate of return on investment, making possible bank financing
for virtually anyone with sufficient equity in a house
· increases the share of distributed power generation
· provides a strong incentive for performance and efficiency
· will be evaluated and adjusted every two years

MRESA “Made in Maine” features:
· higher per-kWh payment to renewable power generators if the system is at least 70% made in Maine
· higher per-kWh payment to generators with systems made in the state’s 10 lowest wage counties
· higher per-kWh payments to systems installed on government facilities or land if the installation results in property tax reduction (e.g. solar panels on a school roof,
methane generated from landfills, sewage, organic waste by a municipality)

MRESA’s rates/kWh are set by the Maine Public utilities Commission

WHY IT IS NEEDED
Fossil fuel dependency
30% of the Northeast Region’s energy goes for electric power generation and over 50% of that still comes from fossil fuels (mostly imported natural gas).

Fossil fuels needed elsewhere
Fossil fuels are needed for aviation, as chemical feedstock for synthetic materials and to power the conversion to a renewables-based economy

Increasing demand for electricity
Already the world’s least energy consuming buildings have no heating systems, i.e. they have eliminated the need for any fuel combustion indoors. Thus they can rely on a very tight structure served by continuous heat-recovery ventilation and small electric or renewable back-up heaters.

Automobiles, too, increasingly rely on electricity, from hybrids, to plug-in hybrids to all electrics. And worldwide, public transit systems rely mostly on electricity for their motive power.

It is beyond question that demand for electricity is growing and that the reliability of the electric power grid is becoming more central to the operation of businesses and buildings alike.

The grid is quite vulnerable to failures
Fossil and nuclear fueled power generation, using steam turbines, is not highly efficient because central power plants are generally located at some distance from most users where their low grade “waste” heat cannot be utilized. On the other hand, central power generation is a mature, very reliable technology: today most power failures occur because of failures in the power grid rather than generating plants. This fact argues in favor of distributed power generation.

In our era when most economic activity relies on electronics and information technology, the reliability of the power grid is of increasing importance.

Distributed power generation has been proven to be the answer to grid reliability problems for decades. And it is also a good match for renewable energy utilization, since the most common forms of renewable energy (solar, wind) are themselves distributed in nature..

ALTERNATIVE RENEWABLE ENERGY INCENTIVES
Maine’s current renewable power incentives — net metering and the renewable energy portfolio — actually penalize distributed energy producers. They offer
· no predictable rate of return
· no profit potential
· no job creation
· no increased grid reliability
· no increase in grid efficiency
· no improvements in power quality
· no incentive to maximize performance
all of which are features of MRESA

Net metering offers no incentive:
· the utility credits the power cost only and only against the amount of power purchased from it
· if more power is generated that the amount against which it can be credited, the utility takes the power free
· the renewable power generator never gets paid — only credited — and always with less than what would be required to pay beck the investment
· if the distributed generator could, it would be better off selling its power on the spot market

Quota incentive structures, (e.g. portfolio standards) create a limited, protected market
· oblige grid operators to deliver a portion of their electricity from renewable sources
· offer no long term certainty to renewable producers
· tend to encourage short term, speculative investments
· favor large, vertically integrated power suppliers

Tax credits help only those wealthy enough to take advantage of them

Direct subsidies are tax dollar dependent:
· chronically under-funded
· inherently unstable (subject to budget cuts)

THE TRACK RECORD
It is rare that a new policy initiative comes with such an impressive track record of performance as MRESA, modeled as it is on a decade old German law that, since 2000,
· created 239,300 new jobs,
· doubled photovoltaic installations in a single year, and increased their number 566% in 5 years
· reduced the cost of installed PV systems 25%
· increased the number of wind power installations 140%
· reduced the installed cost of wind power systems 30%
· saw the the biomass sector grow 55% in a single year
· increased the market share of renewably generated power from 2% to 13%, and
growing over 2% per year
· saw the annual investment volume in renewables grow to _ 8.7 billion in 5 years
and business volume of renewable power reach _ 21.6 billion
· increased grid reliability: brownouts in Germany are extremely rare and the incidence of blackout the lowest in the world
· lowered atmospheric carbon emissions by 97 million tons in 2006 alone

No wonder that 46 nations have enacted laws similar to Germany’s. Some (such as England) have even done away with such tax-based incentives as grants and tax credits, in favor of this type legislation.


WHAT IT COSTS AND WHO PAYS
MRESA’s costs are borne by all rate payers; there are no tax dollars involved
. the German experience shows that
· as costs to the utilities are passed on, the initial burden on rate payers (with few systems on line) is very light
· over the years, in Germany, it grew to €1.01 per rate payer per month, about $19.00 per year, or ~3% of the total electric bill
· the rate of growth in the electric rate due to the German law is consistently smaller than the increase in unsubsidized fossil fuel prices during the corresponding period
· similar results are expected in Maine — the residential rate of CMP, for example, grew 4 ¢/kWh the last time the standard offer rate was renegotiated

MRESA offers rate payers the opportunity to invest at a modest rate in a future where renewably generated electric rates promise to be more stable than today’s fossil-based rates. The alternative is to keep paying ever increasing rates for fossil fueled electricity. Keeping electric rates “flat” where they are is not a real world option.