Tyson Slocum discussed Public Citizen’s efforts towards promoting the public’s interest in renewable energy. He focused on feed-in tariffs. A feed-in tariff is a mechanism for building a subsidy into the production of renewable energy. The overall use of renewable energy is still quite low, however, due to inadequate federal financial incentives. The federal government does have the Renewable Production Tax Credit, which provided $1.2 billion in 2009.
By comparison, the oil industry receives some 9 billion in tax relief. Moreover, the financial benefactors of the Production Tax Credit were those entities that actually profit. Solar developers typically did not have enough taxable income to benefit from this federal program.
By getting the individual consumer in the mix, the use of renewables can increase notwithstanding politics. How can the individual household get involved? The household can help “decentralize” power by generating renewable power for that household and eventually other households.
Households can generate renewable power and receive a subsidy (the feed-in tariff) from ratepayers instead of taxpayers. Two examples of robust feed-in tariffs are Germany and Spain where they generate 4.5 times and 2.8 times more solar energy than the U.S. as a direct result of feed-in tariff financing.
A feed-in tariff can be promoted by a federal feed-in tariff that is in turn financed through climate legislation that raises money by placing a price on carbon. Utilities are resistant to these practices because feed-in tariffs help customers become independent power generators. This resistance is also based on the path paved for energy reform by the federal government.
For example, Mr. Slocum reported that on Monday, President Barak Obama is going to announce $50 billion in loan guarantees for new nuclear power.
In conclusion, state renewable portfolio standards helped get us to where we are today, and feed-in tariffs can run us through the final leg toward efficient renewable energy production for consumers. We will have to watch Congress and the President closely to see if they are serving the people’s interests instead of focusing corporate interests.
Mr. Slocum mentioned that utility companies are reluctant to accept feed-in-tarriffs because it would enable and incentivize individual households to generate power, encroaching on the utilities’ business. Would a net-metering system be a better approach then? My understanding is that net-metering is similar to FITs only there is a cap on how much energy consumers can sell back to power companies. Mr. Loomis said power companies in IL’s net-metering system pay consumers for excess power in credits toward their future use rather than cash. Those things would seem to reduce power companies’ reticence to empower individual households and buildings to generate power. If energy consumers actually participate in a net-metering system this seems like a great solution to several of the problems all the speakers have mentioned. It could help participating states diversify power sources and increase use of renewable energy, get individuals involved in generating renewable power and reducing their own consumption of power, use transmission lines already in existence, and get around political obstacles.