Are You “FIT” for Solar Power

FIT is an acronym for Feed-In Tariffs.
What does FIT mean?
This terminology has become common in today’s discussion about Solar Energy and how it is encouraged by allowing those who create their own solar power with roof-top or pole mount solar panel installations to sell back excess power to their utility company. Many times the FIT programs make this a lucrative proposition that makes installation of solar technology for individual homeowners and small businesses more economical. As this chart illustrates, Germany has a lower FIT rate than others but leads the world in Solar PV on residential roof tops. Where state and federal governments pass these programs they are designed to incentivize solar pv installations. The political arguments run hot on both sides as to how they actually work in the long run.

An Introduction to Feed-In Tariffs (FITs)

Have you heard about feed-in tariffs (FITs) but you aren’t really sure what FIT is or how it works?  Our purpose in being here is to answer just this kind of question.  There’s much that could be said about this effort to ultimately increase the amount of renewable energy, including solar power, being used on the planet.  Here’s a brief rundown on FIT.

Feed-in tariffs are designed to encourage individuals and businesses to become producers of renewal energy by offering cost-based compensation along with long-term contracts which help to fund investments in, for instance, solar panels and wind turbines.
FITs usually include three standard provisions:
· Long-term contracts for the production of electricity
· Guaranteed grid access
· Purchase prices which are grounded upon what the cost is to generate the renewable energy

When a feed-in tariff is established in a particular state in the United States or in a country, the private investors, farmers, homeowners, or business owners who provide renewable electricity are paid for the renewable electricity they produce.  The beauty of this arrangement is that it encourages the development of renewable energy sources, including solar, wind, and bio-gas.These FITs should help to make it cost-effective to install solar panels or whichever form of energy is desired.

A huge push toward solar electricity, wind technology, and other sources of clean energy is needed in the United States; and that’s where FITs as incentives come in.

As to whether FIT programs are effective, over 50 countries have enacted feed-in tariff policies, including Canada.  As for the USA, a few states have adopted FITs and more are moving in that direction.  Actually, compared to European nations, feed-in tariffs are hardly utilized in the US.  In fact, in most states, tax incentives and renewable portfolio standards are the more typical inducements toward clean energy sources.

Policymakers across the USA often drag their feet in pushing for more rapid development of solar power and other forms of renewable energy; the strength of the fossil fuel and utility industries are among the varied reasons.

A program attempting to unleash renewable energy in New York called Clean Local Energy Accessible Now – Feed-in Tariff (CLEAN-FIT) is one example of a targeted effort to increase clean energy sources.  Besides providing rapid deployment of renewable energy, this program is expected to create many jobs.

In Ontario, Canada, a FIT program was recently established; and, as a result, 20,000 jobs have been created. From what one of our NASS members in Ontario tells us, Ontario had a program that is called MicroFIT that requires 60% Ontario Made Components, but also rewarded the investment with electricity that goes back into the grid at a reimbursement rate of 80 cents a kwhr for energy that cost 6 cents a kwhr to buy. That is a super fit deal for sure. The rate of reimbursement has gone down to 54 cents but will still be very much of an incentive. This also supports the manufacturers in Ontario that produce Solar Panels and components. Too bad we couldn’t get some of that type of action state-side too!

FIT programs make the financing of projects to create renewable energy less expensive, more appealing, less complicated, and more possible for individuals, communities, and small businesses because they provide an investment climate that’s stable.

While Canada, some states in the US, and other places throughout the world are achieving the desired goal of FIT programs, New York policymakers have not enacted the CLEAN-FIT program.  A new effort is being launched in New York in 2012.  A Solar Renewable Energy Credit (SREC) bill is being proposed.  While this would be a step in the right direction toward ultimately adopting CLEAN-FIT, it falls short of where many believe New York should be in the switch to renewables.  Every state and community has its own story about the indifference or move towards FIT programs.

To learn more about what your state or province offers to get FIT with Solar Energy contact one of our NASS members and ask them about the current status in your area.

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  1. It’s certainly a good thing that installing these things is easier and easier. The easier it is, the more people will be interested in trying.

    • Agreed, as component prices continue to level or fall (despite the bump in the road caused by the Chinese Solar Cell Tariffs) we are very bullish on the future of solar energy for homeowners and small businesses both in the U.S., Canada and in the U.K. As traditional utility costs continue to go up, more and more folks will opt for the solar alternative!