It was in Germany that Ed Regan realized Gainesville, Florida, was going about things all wrong. The assistant manager at Gainesville Regional Utility (GRU) was out looking for ways to boost his city’s renewable energy capacity. "Germany was a game-changer," Regan says. Wind turbines and solar panels seemed to be everywhere. He soon learned the secret.
Before Regan’s June 2008 trip, the GRU was trying to promote small-scale renewable energy generation by offering hefty cash rebates to customers who installed solar photovoltaic panels. And it had a "net metering program" that allowed customers who generate their own power to run their electricity meters backward, thereby cutting their electric bills potentially to zero.
But the programs weren’t attracting a great deal of interest. The utility’s rebate program had yielded only 300 kilowatts of solar power capacity–roughly the amount of electricity used by 160 hair dryers–and it cost a lot of money.
The difference between Gainesville and Germany was that Germany had a national feed-in tariff. Under this system, energy consumers can become renewable energy producers by installing solar panels on their roof or a wind turbine in their backyard and selling their energy to the local utility. These customers-turned-producers receive above-market prices for their energy, often for up to twenty years. With the feed-in tariff, Germany boosted its renewable energy production from 1 percent of its total output in 1995 to 12 percent in 2005. By 2007 renewables supplied 14 percent of Germany’s electricity. Denmark and Spain also have successful feed-in tariff programs.
So this past March, Gainesville rolled out its own feed-in tariff. GRU now pays twice the retail cost for every kilowatt of solar power-generated electricity. The extra cost means a small increase in electrical bills for all utility consumers, less than a dollar per month per household.
But in order to keep consumer prices down, the feed-in tariff is limited to expand by only 4 megawatts of solar photovoltaic capacity per year, for six years. And the first year’s quota was snapped up in just two weeks. The program now has a waiting list through 2016. Rather than a bunch of homeowners each installing a few panels, the Gainesville quotas were mostly taken by commercial investors.
Among them is Dave Davis, a north Florida native who after sixty-five years in wholesale and retail gasoline distribution is getting into solar. "I have six acres out back where I am going to put the solar," says Davis, whose Southern drawl makes the word sound exotic, almost foreign: soh-laar. "I been on both ends of the oil companies," he says, "and I’d like to see a lot more solar here in Florida. A lot less dependency."
For Davis, the small solar farm represents income security for his heirs. But the larger wisdom of feed-in tariffs is also clear. Studies show that such laws boost green energy production. And feed-in tariffs transform the economic function of the electrical grid: no longer is it a centralized technological embodiment of corporate power and hierarchy. With feed-in tariff legislation, electricity starts running both ways along the wires. And by extension, so does money and political power.