Feed-in Tariff policy guarantees payment for solar energy produced using your array. It works by allowing you to have a guaranteed price for your energy, as well as access to grid services. The benefit of using this policy is that it promotes renewable energy sources and is simple to implement.
Feed in tariffs can guarantee payment
Feed-in Tariffs allow producers to receive a payment for their efforts in renewable energy. These schemes have been used for years in Europe to encourage growth of renewable energy. They differentiate payments according to size and technology, and are intended to decrease over time. Germany, for instance, has been using feed in tariffs for more a decade to encourage renewable energy.
They encourage the development renewable energy sources
Feed in tariffs, which lower the price of energy sources, are a mechanism that promotes the development and production of renewable energy. This makes renewable energy sources less expensive than conventional energy sources. Feed in tariffs will no longer be necessary once renewable energy has reached this level of cost-competitiveness. Feed in tariffs may be either short-term and long-term depending upon the country's ambition. The main objective is to reduce greenhouse gases emissions and encourage the development of renewable energy.
They can be combined with other solar incentives
Feed in tariffs are an incentive system that allows residential solar customers to sell excess solar power at a discount to the market rate. Originally introduced in 2006, this incentive has helped the solar industry expand by 50 percent annually. Feed-in tariffs may be applied to commercial and residential solar installations.
They are a very simple instrument of policy.
Feeding in tariffs have been proven to be a powerful policy tool for promoting renewable energy technology and production. They guarantee grid access, long term contracts, and a guaranteed cost for the energy produced. They ensure that producers receive a fair compensation for the energy they produce. This policy instrument can be used in many countries.
They are state-administered
The government has introduced feed-in rates to encourage the production of renewable energy. These programs provide guaranteed grid access, long-term contracts and cost-based purchasing prices for energy producers. They also require the energy producers to produce energy from renewable sources that are credited to the Retail Price Index (RPI). These programs are used worldwide, as well as in the United States.
They are not a cost-efficient way to conserve carbon.
Feed-in tariffs pay you for excess electricity you create. It is based upon your home consumption and is cap at 50% of total generated. In theory, you can store this excess electricity, which will lower your electricity bill. However, this method has its limitations.