Feed-in Tariff (or Feed-in) is a policy instrument that guarantees you payment for the solar panel array's energy generation. It allows you to receive a guaranteed price for the energy you produce and also access to grid services. This policy has the advantage of promoting renewable energy sources and being easy to implement.
Feed-in tariffs guarantee payment
Feed-in tariffs allow producers of renewable energy to be paid for their efforts. These schemes have been used in Europe for years to encourage the growth of renewable energy. These schemes differentiate payments based on size and technology and are designed 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 of renewable energy sources
Feed in tariffs are a mechanism that encourages the development of renewable energy sources by lowering the cost of these energy sources. This allows renewable energy sources to be competitive with conventional energy sources. Once renewable energy has achieved this level of cost competitiveness, feed in tariffs are no longer required. Feed in tariffs may be either short-term and long-term depending upon the country's ambition. The main goal is to lower greenhouse gas emissions while promoting renewable energy development.
They can also be used with other solar incentives
Feed-in tariffs, an incentive system for residential solar customers, allow them to sell excess power at a fraction of the market rate. This incentive was originally introduced in 2006. It has contributed to the growth of the solar industry by 50 percent every year. Feed in tariffs can be applied to residential or commercial 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 ensure grid access, long-term contracts, and a guaranteed price for the energy produced. They also ensure that producers are compensated proportionately for the resources used to produce the energy. This policy instrument has been utilized in a number of countries all over the world.
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. The programs require energy producers to use renewable energy sources that are credited to their Retail Price Index (RPI). These programs are currently used all across the United States and worldwide.
They are a financial inefficient way of saving carbon
Feed-in tariff pays you for excess electricity that you produce. It is based upon your home consumption and is cap at 50% of total generated. The theory is that you can store this excess power, which will lower the cost of your electricity. This method is not without its challenges.