The United States of America’s dependence on fossil fuels is detrimental to the future of our magnificent Nation. The only way to repair the damage we have caused, and our currently causing, to our environment is to position renewable energy in our system in such a way that it soon dominates the power grids across America, ceasing our addiction to fossil fuels. The policy option that will successfully enable this switch is feed-in tariffs. According to KEMA, Inc., an energy consultant that frequently prepares reports for governmental energy agencies, “a feed-in tariff is an offering of a fixed-price contract over a specified term with specified operating conditions to eligible renewable energy.” Essentially, a feed-in tariff empowers the use
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First, the idea of a guaranteed price, buyer, and revenue stream is one of the cornerstones of feed-in tariffs. Predominantly, these guarantees catalyze new development, since utility only pays for the energy one produces, owners are encouraged to place their systems in optimal locations and keep them in pristine shape. Moreover, “feed-in tariffs reduce transaction costs for both buyer and seller and are more transparent to administer than the current system” (KEMA, Inc. [2008]). Secondly, access to markets is expedited, as projects do not need to worry about bureaucratic red tape. This not only increases timeliness, but it encourages others to follow along and install renewable energy generators in their homes, as it is quite a simple and swift install. Furthermore, as is the case with many feed-in tariff policies, for example that of Germany, grid access is guaranteed once someone decides to install renewable energy sources. Lastly, the flexibility of design allows for individual cost assessments for different projects, which saves money and also promotes the entrance of single-application renewable-energy sources that may not have worked under fixed-price tariffs (energy.ca.gov). Plus, if policy makers so wish, they may be able to push specific types of renewable energy systems through changes in …show more content…
The arguments often revolve around payment, costs, and flexibility and dependence. Payments, they argue, present a massive problem for feed-in tariffs. If the guaranteed payments are too low they can stifle new development, and if they are too high they become the source of considerable losses of revenue. Next, adversaries note the price of start up costs of renewable energy systems, costs that are not covered with feed-in tariffs. These costly start-up prices put low-income families at a disadvantage and only are viable for people with disposable incomes. Finally, continuous updates to feed-in tariff policies can cause uncertainty, and, as noted by NREL, “the more uncertain the policy structure the riskier the RE [renewable energy] investment is to the project financier.” (source?) While all of these objections and demurrals of feed-in tariffs are valid, they can be reconciled quite simply with modest structural
First, the idea of a guaranteed price, buyer, and revenue stream is one of the cornerstones of feed-in tariffs. Predominantly, these guarantees catalyze new development, since utility only pays for the energy one produces, owners are encouraged to place their systems in optimal locations and keep them in pristine shape. Moreover, “feed-in tariffs reduce transaction costs for both buyer and seller and are more transparent to administer than the current system” (KEMA, Inc. [2008]). Secondly, access to markets is expedited, as projects do not need to worry about bureaucratic red tape. This not only increases timeliness, but it encourages others to follow along and install renewable energy generators in their homes, as it is quite a simple and swift install. Furthermore, as is the case with many feed-in tariff policies, for example that of Germany, grid access is guaranteed once someone decides to install renewable energy sources. Lastly, the flexibility of design allows for individual cost assessments for different projects, which saves money and also promotes the entrance of single-application renewable-energy sources that may not have worked under fixed-price tariffs (energy.ca.gov). Plus, if policy makers so wish, they may be able to push specific types of renewable energy systems through changes in …show more content…
The arguments often revolve around payment, costs, and flexibility and dependence. Payments, they argue, present a massive problem for feed-in tariffs. If the guaranteed payments are too low they can stifle new development, and if they are too high they become the source of considerable losses of revenue. Next, adversaries note the price of start up costs of renewable energy systems, costs that are not covered with feed-in tariffs. These costly start-up prices put low-income families at a disadvantage and only are viable for people with disposable incomes. Finally, continuous updates to feed-in tariff policies can cause uncertainty, and, as noted by NREL, “the more uncertain the policy structure the riskier the RE [renewable energy] investment is to the project financier.” (source?) While all of these objections and demurrals of feed-in tariffs are valid, they can be reconciled quite simply with modest structural