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Contrary to what some commentators are saying, Oregon did not just adopt a feed-in tariff (FIT).  ELAW has been working diligently to ensure that Oregon adopts a FIT because FITs have been proven to be the most effective and efficient means of moving renewables onto the grid. Sadly, Oregon’s program falls far short of the mark.

Although I’m happy to see more incentives for solar PV generation here in Oregon, people should understand that Oregon is not testing a feed-in tariff.  Don’t get me wrong — I’m pleased that homeowners have a new net metering program that should pay for installation of a PV system, but Oregon’s pilot program is not a FIT.

Does it matter?  Yes.  Feed-in tariffs have proven to be a highly effective and efficient means of getting renewables onto the grid, which is why ELAW has been working hard to ensure Oregon adopts a FIT.

Oregon’s program is lacking key elements of a true FIT.  A FIT encourages people to install systems that generate as much electricity as possible, because they are paid for all electricity produced.  FITs pay a fixed price for all the electricity generated, which enables solar manufacturers and installers to anticipate future demand and build their business.  Setting the price and designing a simple program encourages the growth of the local industry, with small local businesses competing on equal footing with out-of-state installers.

Under Oregon’s new program, small and medium sized systems (systems up to 100kW) will not be paid for any electricity they generate that exceeds what they consume.  A true FIT encourages installation of more solar capacity, but the Commission is requiring new installations to be limited in size so they do not exceed the average consumption on the site.  The electricity generated under a FIT is sent to the grid, ‘greening’ the electricity we all use, while electricity generated under Oregon’s program is used on-site, never making it to the grid.  This means it is really an incentivized net metering program, not really a FIT at all.

Under Oregon’s program, large systems (up to 500kW) will participate in an annual bidding process.  Bids will be selected from lowest price to highest until the capacity target is achieved.  This kind of bidding process fails to provide the pricing certainty that is a key ingredient of a FIT (which enables businesses to project future demand for solar installations) and makes it harder for small, local businesses to participate.

Also, note that we’re only talking about 25 MW of generation over five years for the entire state.  The city of Gainesville Florida (pop. 125,000) is implementing a FIT that already has 25 MW of capacity enrolled (at least on the books) through 2016.

The good news?  The new pilot program in Oregon may well boost solar production.  But, it is not a FIT and we should not think that Oregon is testing how a FIT will work.  As we search for energy solutions, we should be clear about what we are testing and what we are learning.

Jen Gleason, Staff Attorney

 Renewable Energy Sculpure in front of Houston Public Library. From Flickr - by ANVAR - RUSSIANTEXAN © GONE WITH THE WIND

Renewable Energy Sculpture in front of Houston Public Library. From Flickr - by ANVAR - RUSSIANTEXAN © GONE WITH THE WIND

For years, ELAW has been evaluating renewable energy policies from around the world and helping partners around the world develop strong laws. Policies known as feed-in tariffs (FITs) have proven very successful in Europe.  ELAW Staff Attorney Jen Gleason worked with colleagues in the United Kingdom and Germany to determine what made some FITs more effective than others.  Studies show that FITs are the most effective and efficient way to promote the rapid generation of electricity from renewable sources.  A good FIT will guarantee that a generator of qualified electricity will be able to connect to the grid and sell all the electricity generated to the local utility at a price that ensures a reasonable profit.  Germany has far surpassed its goals for generating power from renewable sources.  ELAW has been working to bring lessons from these successful models back to Oregon.

A year ago, the World Future Council brought together people from the United States and Canada who have been studying FITs for an all-day workshop.  At the end of the workshop a new organization was created to promote FITs in North America – the Alliance for Renewable Energy (ARE).  Jen is an ARE steering committee member.  ARE members keep each other informed about efforts to adopt FITs.

A focus on promoting renewable energy is one of the best ways known to combat climate change, and ELAW is working around the world to ensure that the best renewable energy policies are adopted and replicated.

Read other takes on climate change:

Solar Panels on Tamarack Wellness Center in Eugene

Solar Panels on Tamarack Wellness Center in Eugene

I think Oregon is on the verge of adopting a law that will allow Oregonians to put solar panels on their rooftops and sell all of the electricity they generate to their local utility at a fair price. I’ve been in Salem, Oregon several times over the past few months – witnessing and participating in “sausage making.”

The Oregon House of Representatives passed HB 3039 to the Senate with a 47-11 vote.  The current version of the bill includes many features — some of which are good and some that are not so good. The bill contains a pilot project for distributed solar generation, which means individuals can generate electricity and sell it back to their utility.  As the bill moves to the Senate, ELAW will be working to bring home lessons learned in Europe and make sure Oregon creates a strong pilot project, modeled on Germany’s successful renewable energy program.

Jennifer Gleason, Staff Attorney

The Environmental Law Alliance Worldwide has been studying Renewable Energy Payment (REP) policies around the world to determine what makes such a program successful. We have been helping environmental advocates around the world promote renewable energy payment policies, and we are excited to bring these lessons home to the U.S.

A well-designed REP policy would help put Americans to work building, installing and servicing the equipment that makes generating and selling renewable energy possible. A number of states – including Oregon, Michigan, Minnesota, Florida and Hawaii – are considering adopting REP programs.

Read ELAW Staff Attorney’s essay about REPs in Oregon in the Register Guard.

In this video, Michigan Governor Jennifer Granholm describes a feed-in-tariff or REP program:

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