| As the urgency of climate change becomes more | | | | * avoided environmental and health damages |
| and more apparent, the implementation of | | | | worth approximately 3.4 billion euro ($4.8 billion) |
| renewable energy technologies has grown | | | | * A decline in wholesale electricity prices |
| imperative. In an effort to provide financial | | | | amounting to 5 billion euro ($7 billion).*Worldwatch |
| incentives for both the business and residential | | | | Institute |
| application of sustainable technologies such as solar | | | | Naturally the German government has invested |
| thermal energy and wind power, many | | | | heavily into the renewable energy industry; |
| governments around the world have introduced | | | | however the economic benefits are well able to |
| variations of the feed-in tariff scheme. | | | | compensate such investments. This will become |
| Basically, this scheme obligates electricity utilities to | | | | even clearer as the long term benefits of a |
| buy power from renewable sources at fixed, | | | | thriving renewable energy sector become more |
| often above market rates (which can be | | | | apparent. These would include future savings in |
| structured to promote greater technology | | | | relation to avoided environmental damages, |
| efficiency through stepped reductions in tariffs | | | | indirectly avoided health damages, long term and |
| over an extended period of time). These rates | | | | stable employment, etc... The potential of |
| normally represent a significant increase (often | | | | renewable energy is very great, taking advantage |
| referred to as premium FIT) and can be up to | | | | of this potential is absolutely imperative. Any |
| 300% or more above the retail price for | | | | government must realise that growing a country's |
| electricity. Such makes producing clean energy | | | | renewable energy sector as quickly as possible is |
| much more lucrative. A utility purchasing clean | | | | vital to becoming part of a better future. Our |
| energy compensates for the cost of this energy | | | | climate is changing, resources are dwindling - the |
| by spreading the difference across all its | | | | longer the implementation of renewable |
| customers. As a result, only a very small increase | | | | technologies is delayed, the greater the cost to all. |
| in the electricity price per person is required in | | | | The feed-in tariff scheme is a good initial step in |
| order to deliver a significant incentive for the | | | | this direction. |
| utilization of renewable energy technologies. Rates | | | | It is important that a FIT system is continually |
| usually vary depending on what renewable energy | | | | optimised in order to provide the best possible |
| technology is used, this being due to the | | | | support to sustainable technologies, thus reflecting |
| difference in the cost of energy generation | | | | changing market conditions. The tariff must be |
| respective to the technology. The tariff is | | | | high enough to make a real impact on market |
| normally guaranteed for a duration of 10-20 | | | | interest in clean technologies and the duration of a |
| years. Both the rate and the duration of a feed-in | | | | scheme must be sufficient to reduce market risk |
| tariff provide a certainty to investors which | | | | and encourage investment. |
| lowers the market risk. | | | | In 2008, a detailed report by the Commission of |
| The system has been very successful in countries | | | | the European Communities found that |
| such as Germany and Spain, greatly stimulating | | | | "well-adapted feed in tariff regimes are generally |
| the renewable energy sectors in those countries. | | | | the most efficient and effective support schemes |
| Renewable energy in Germany now accounts for | | | | for promoting renewable electricity." In the |
| around 15% of the nation's energy. Of this | | | | European Union the promotion of wind energy, |
| renewable energy growth, more than half was | | | | bio-gas and photovoltaic technologies has yielded |
| supported by feed-in tariffs. This achievement has | | | | the greatest success when supported with a |
| prompted several other countries around the | | | | feed-in tariff scheme. |
| world to introduce feed-in laws. Among many | | | | In 2006, approximately 240,000 people where |
| other countries, several states in the US have | | | | employed by Germany's renewable energy |
| enacted feed-in laws and the UK is commencing | | | | sector. This represents a 40% increase over |
| its system of FITs in April 2010. In the UK this is | | | | 2004. Such a trend is a good example highlighting |
| set to boost the lagging implementation of | | | | the enormous contribution a FIT scheme can |
| photovoltaic appliances. | | | | make; by greatly boosting the renewable energy |
| It is clear that a good feed-in tariff system has | | | | sector it lays the foundation for hundreds of |
| the capacity to greatly boost the renewable | | | | thousands of new and clean jobs. |
| energy sector in the country of implementation. | | | | In conclusion, feed-in tariffs can offer homes and |
| This boost creates new infrastructure laying the | | | | businesses a great incentive for producing clean |
| framework for governments and businesses to | | | | energy and consequently create significant |
| continue investing in renewable technologies. A | | | | environmental and economic benefits. It is crucial |
| booming renewable energy industry, such as in | | | | that sustainable technologies create a strong |
| Germany, creates very solid economic benefits. | | | | appeal in the business world. The financial benefit |
| In Germany, the economic benefits of renewable | | | | of generating clean energy must reflect the |
| energy totalled more than 9 billion euro ($12.7 | | | | genuine value of renewable technology. Just as |
| billion) in 2006, including: | | | | homes and businesses are better off generating |
| * fuel-import savings of 0.9 billion euro ($1.27 | | | | power sustainably, so it is for a country, for the |
| billion) | | | | planet. |