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FITs are the most prevalent national policy mechanism internationally and have supported the majority of global wind and PV capacity.91 Although FITs were initially used in Europe, the majority of FIT policies are now in emerging economies and developing counties. A number of countries in the LAC region adopted FITs (or policies closely related to FITs) during the last decade, including Argentina, Brazil, Dominican Republic, Ecuador, Honduras and Nicaragua.92 More recently, however, there has been a strong trend toward competitive bidding in the region with Argentina, Brazil, Costa Rica, El Salvador, Honduras, Jamaica, Mexico, Panama, Peru, and Uruguay introducing auctions. Chile and Nicaragua are the only countries in the region whose policies resemble a RPS, mandating generators and distributors to comply with specific quotas of NRET in their sales or purchases, respectively. FITs and auctions were originally designed to achieve incremental - rather than structural - change in the electricity markets, but in some cases they have been refurbished to enable scaled-up renewable energy penetrations by putting in place sophisticated mechanisms to manage growth such as cost control and ratepayer protection.93 These procurement policies coupled with broader electricity market reforms attempted to steer structural change in the countries they were implemented. An alternative or complementary approach to procurement policies previously presented is onsite or offsite self-supply regulations that enable and encourage consumers to generate their own electricity from renewable energy sources. In the Caribbean, countries such as Barbados, Grenada, Jamaica, and St. Lucia have introduced different versions of net metering and net billing policies that allow onsite generation to be credited against customer electricity bills at (or below) the retail electricity rate.94 Additional Caribbean countries may introduce similar policies since CARICOM members recently agreed to “draft and implement regulatory and legislative reforms to ... allow for self-generation and feed-in of excess electricity for small renewable power producers...”.95 Onsite generation is also being encouraged in countries such as Uruguay where onsite generators have the option to credit their output at the retail rate for up to 10 years. Generation that exceeds onsite demand can also be reimbursed, but this must be negotiated on a case-by-case basis. Mexico offers a unique case of offsite self-supply regulations that are driving the development of NRETs, and notably that of wind power in the Isthmus of Tehuantepec (with more than 770 MW of installed capacity96). Mexican regulations include an energy bank, post-stamp wheeling (transmission) charges, and capacity recognition to offset demand charges.97 In many of these projects consumers and generators have created self-supply associations through cross-sharing agreements. In addition to procurement or self-supply policies, a set of complementary policies are used that strengthen the enabling environment for renewable energy (e.g. streamlined permitting, property tax exemptions, import tax exemptions), provide market support (outreach, education, capacity building, and institutional strengthening), and enhance the contribution of NRETs to local development. New Energy Market The energy market regulation is already technologically biased in favor of fossil fuel technologies and neglects their negative societal impacts. Repairing these two missing pieces is what the “new” energy market needs to do in order to efficiently allocate scarce resources. This involves changes in market Rethinking our energy future p. 19PDF Image | White Paper on Renewable Energy for the 3GFLAC
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