The Solar Real Estate Incentive
Germany's successful feed-in law has been well reported and now a U.S. congressman wants to bring a version of it to these shores.
Jay Inslee (D.-Wash.) now wants to multiply Germany's achievement in this country. He is motivated by concerns about global warming and the security risks of foreign oil and gas.
Inslee introduced a "renewable energy jobs and security bill" into Congress modeled after German legislation. For perspective, I recently spoke to Jeffrey Michel, an American energy researcher who has lived in Germany for four decades.
Michel told me the proposal would require electric utilities to provide long-term incentive payments at uniform nationwide rates for renewable grid power. The contract time would be fixed at 20 years, just like in Germany.
He told me how Germany already derives 17 percent of its electricity from renewable energy generation. "World leadership has been achieved by providing reliable financial returns to operators," he said.
The 3,800 megawatts of new photovoltaic generation built in Germany in 2009 alone represents nearly twice the entire solar capacity (2,108 megawatts) installed to date in the United States.
The level of support for Inslee's plan is uncertain, but Michel told me how one creative real estate agent in Arizona has found near-term benefits by embracing solar power.
Glendale, Arizona agent Jennifer Del Castillo is reorienting her business toward solar home sales, reasoning that the technology enhances the value of existing real estate.
She recently sold a solar-retrofit home in only 35 days, while conventional offerings languish on Arizona's depressed real estate market. The buyer paid the full asking price in cash for a home with a 6.15-kilowatt rooftop photovoltaic system that had cut electricity costs by more than half.
Arizona has twice as much annual sunshine as Northern Europe, but without continuing payback guarantees, rooftop generation has remained too expensive for most homeowners. But that could change with the help of Inslee's proposal.
In Del Castillo's view, anyone considering selling a home in the next few years should be installing solar panels now. Only then can actual electricity savings be documented to increase point-of-purchase value. A solar retrofit can easily raise a home's asking price by $10,000 to $20,000.
The benefits could be even greater as the prices for solar equipment have fallen dramatically. In the meantime, solar adds a new dimension to a home in a sun-drenched state.
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Comments
Level Playing Field
I am convinced that there is only one single activity that will bring the US consumer into the Renewable Energy fold; help cure this Nations Energy issues and that is get them where they feel it the most, in the pocketbook!
By this I mean put the money in "their" pocket, or at least give them equal opportunity to earn the money and they will come; in droves.
The US needs to stop playing all these mindless games and establish a level playing field for Net Metering. Make all Utilities, all REC's and Co-ops play by the same rules and establish a reasonable and fair price that compensates the "Producer Consumer" for "selling back" excess Energy produce by a home (or Business) Renewable Energy System. The amount is not overly important (though it should at least be something close to what the Utility Industry says their avoided cost is, or about 3 cents per kW) and make it payable on a fair basis to that Producer/Consumer (in other words it is their Energy that is produced and going to be used and or sold through the Utility system so allow them to cash in at any time and/or carry over those Net Metering receipts to the next year; whatever the situation they don't loose them for any reason).
Simply level the playing field for the Home/business producers and they will sign on to any number of viable renewable Energy programs. Establish a home/business Net Metering program to anything under 1MW capacity in order to benefit as many businesses as possible; anything over would fall into a Commercial category which would pay slightly higher rates; establish a reasonable step-up from there to a Utility level which again pays something else.
All producers retain all rights to Carbon Credits, Exemptions, PTC's, Green Certificates or other incentive unless the Utility, REC or Co-ops pay an additional stipend for those rights.
Just level the playing field and allow the small producers to help remedy some of the problems we are (or will be) facing.
Feed-In Tariffs
I think feed-in tariffs are a horrible idea. They benefit purveyors of technology and they may benefit customers who install the stuffbut they also create some significant long-term problems that policymakers have clearly not thought through.
What happens, for example, if the feed-in tariff is so successful that a relatively significant fraction of eligible customers sign up for it? Someone has to pay for the surplus electricity that's sold at above-market rates, and that task falls to taxpayers or more likely, those who chose not to install solar panels on their roofs or have no roofs. Eventually these folks bear the sizable burden of a subsidy to recipients of the feed-in tariff.
We should also ask whether the incentives embodied in operating rules and eligibility requirements are beneficial or perverse. Reportedly many of the projects in Spain that are paid under feed-in tariffs are all but useless.
Our ultimate objective should be to encourage innovations that allow solar, wind and other renewable energy technologies to be cost-competitive with conventional coal- and gas-fired generation. Even if consumers recognize the implications of continued unfettered use of fossil fuels, their willingness to fund more expensive renewable alternatives is not without limits, and politicians are unlikely to turn a blind eye to pocketbook issues that affect their constituents, no matter how forcefully climate scientists and renewable energy advocates press their case.
In other words, we need a little common sense here.
Jack Ellis, Tahoe City, CA