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04 Of all the policies employed by governments, feed-in tariffs (also called premium payments, advanced renew- able tariffs, and minimum price standards) remain the most common. By early 2011, at least 61 countries and 26 states/provinces had FITs, more than half of which had been enacted since 2005.38 (See Table R10.) existing single-rate FIT with technology-specific FIT rates over a 10-year term for wind, geothermal, biomass, biogas, and solar, with bonus payments if hardware components are made in Turkey. There are many variations of FITs, and no single definition applies.39 (See Sidebar 6.) In one variation of a new FIT, the U.S. State of Louisiana’s Public Utility Commission announced in 2010 that electric utilities would be required to implement a limited “standard offer tariff” that is undifferentiated by project size, technology, or resource intensity. This type of tariff represents the utility’s “avoided cost” of generation plus an “environ- ment” premium fixed at U.S. 3 cents/kWh. The tariff also sets total floor and ceiling prices of 6 cents/kWh and 12 cents/kWh, caps total capacity at 30 MW per utility, and applies to projects between 25 kW and 5 MW.40 The additional costs are passed on to ratepayers through a fuel adjustment clause, an approach normally used to cover increases in the cost of fossil fuels.41 In Australia, the federal government in December 2010 adjusted the solar rooftop PV credit scheme in order to wind it down faster than was originally planned due to the impact on electricity prices, continuing strong industry growth, and the resulting lower demand for other clean energy technologies such as solar water heaters.47 In May 2011, it reduced the AUD 1.5 billion Solar Flagship program, which aims for four grid- connected power stations, by AUD 220 million.48 New South Wales reduced its solar PV FIT incentive by a third, to AUD 0.40/kWh, and cut the scheme for new partici- pants because the measure had cost the state some AUD 1.9 billion since its inception in 2009.49 Conversely, the Australian Capital Territory (ACT) expanded the existing FIT for rooftop solar PV so it also applies to 30–200 kW grid-connected generation systems, up to a total installed capacity cap of 240 MW.50 Several of the existing FIT policies around the world are presently under review. In particular, many countries are revising solar PV FITs to dampen the booming rate of installations, which in many cases are far exceeding expectations due to the unprecedented price reductions in solar PV that occurred in 2009 and 2010. In late 2010, the Czech Republic passed new legislation to slow the rate of PV installations as total capacity increased from 65 MW at the end of 2008 to nearly 2 GW by the end of 2010 – in part out of concern for the impact of the FIT on average electricity prices.42 Effective from March 2011, the country cut all FIT rates for ground-mounted PV installations that were not yet interconnected with the grid. In May 2011, Italy cut tariffs for solar PV by 22–30% for 2011, by 23–45% for 2012, and by 10–45% for 2013 (ranges apply to different scales of installation). A project ceiling of 1 MW on rooftops and 0.2 MW for ground- mounted systems was also imposed to limit the total cost to EUR 6–7 billion by the end of 2016, when roughly 23 GW are expected to be installed.43 Although most policy activity in developed countries involves revisions to existing FITs, at least three new FIT policies were introduced or implemented in developing countries in 2010 and early 2011. Malaysia’s policy aims to meet a 3,000 MW renewables target by 2020, with one-third of that expected from solar PV and another third from bioenergy.51 Ecuador adopted a new system of FITs in early 2011, following an earlier FIT policy from 2005.52 And Uganda began implementation of its existing FIT in early 2011 for 11 separate technologies.53 Many other developing countries saw increasing capacity of renewables from previously enacted FIT policies.54 Many other FIT changes took place in 2010. In Spain, the EUR 0.42/kWh FIT level for solar PV, as set in 2007, still remains, but new legislation now caps the annual hours rewarded by the FIT, and some uncertainty arose regard- ing retroactive cuts to existing systems.44 Greece’s finan- cial problems led to the government blocking a backlog of project applications for support incentives worth over EUR 2 billion, but the restriction was lifted in September 2010 and new projects continued. The United Kingdom decided in 2010 to replace its existing quota policy with a FIT, starting in 2013, for “low carbon generation.”45 Bulgaria, through its new Renewable Energy Act of June 2011, put an annual cap on new projects receiving the FIT prices by applying a quota.46 And Turkey enacted a long-awaited renewable energy law that replaces the Another common policy in some jurisdictions, particu- larly at the state/provincial level in the United States, Canada, India, Australia, and a growing number of other regions, is the “quota” or “renewable portfolio standard” (RPS). A quota/RPS is an obligation (mandated and not voluntary) placed by a government on a utility company, group of companies, or consumers to provide or use a pre- determined minimum share from renewables of either installed capacity, electricity generated, or electricity sold.55 A penalty may or may not exist for non-compliance. 55 RENEWABLES 2011 GlObal STaTuS RePORTPDF Image | GLOBAL STATUS REPORT Renewables 2011
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