Feed me Feed-in!

Tax credits.  Cap-and-trade.  Kyoto.  Utility credits.  How can we really embrace alternative fuel?

      The main reason why Germany is a leader in renewable energy technologies is because of their adoption of the feed-in tariff.  Although there is much talk about Waxman-Markey, carbon credits, and third party loans for solar panels on rooftops, feed-in tariffs should be the energy independence path we follow in the US.

Here’s how and why the feed-in tariff works.  Let’s say the average kilowatt charge for fossil based fuels in your region is 20 cents.  For solar or wind, we’ll assume that the charge is 50 cents for each kilowatt.  Because of that steep price difference, homeowners and business owners are going to resist investing in solar panels, wind turbines, etc.  But let’s say a local utility serves are region that has 2 million people.  The utility hypothetically spends $1 million a year on solar or other alternative fuel.  That difference would be spread across all customers the utility serves.  Instead of simply shifting pollution between players in a cap-and-trade scheme, everyone pays a little more for adapting new energy technologies.  As the alternative form of fuel becomes a larger part of the utility’s portfolio, the feed-in tariff slowly becomes phased out.

This is nothing new, and oddly enough, its birth was here in the US under President Jimmy Carter, whose attempts at gaining energy dependence for the United States were way ahead of his time.  These laws were phased out under Reagan, and now, the leader is Germany—their 1990 law has become a model for shifting towards more renewable energy technologies, and is adapted here and there from Gainesville, Florida, to Bulgaria.

Feed-in tariffs are the way to go, folks.  It would allow quicker implementation of solar energy in the Southwest and wind in the prairies.  I’m dubious, however; as long as  you have players such as LADWP (Los Angeles’s DarthVader Will Punish renewable energy) with their own vested interests, I’m not hopeful we’ll see this approach anytime soon.