Nine Months after Gainesville - Feed in Tariff Revisited

****Updated 12/29/2009

Some updated numbers on the Gainesville FIT program provided by Gainesville Regional Utilities:

* 563 kW have been completed through the FIT program.

* Because the FIT queue was filled so quickly another 452kW has been installed through the GRU net metering program since last March.

* In total GRU has had over 1MW of solar installed in less than a year (compared to 230kw between the entire period of 1980-2009).

On March 1, 2009, Gainesville Regional Utilities in Gainesville, Florida began the first solar feed-in tariff program in the United States patterned after  European countries such as Germany in which payment is based on “the estimated generation costs of the renewable energy system, plus a mandated rate of return on investment”.  Under the arrangement GRU customers who invest in solar PV systems can sell the electricity generated back to GRU at a fixed price of $0.32 per kilowatt hour for 20 years.  Initially hailed as a landmark decision for community solar the program has featured measurable successes along with high profile critics. 

The biggest criticism came unexpectedly from the leader of one of the largest solar industry association.  Solar Energy Industries Association (SEIA) President & CEO Rhone Resch had the following to say about the program at the PV Industry forum in May:

"You are now seeing Gainesville Florida had the first Feed-in Tariff in the country. It was poorly designed; it will probably give Feed-in Tariffs a bit of a black eye in the US. But at least it was the first."

Some of the "poor design" aspects Mr. Resch may have been talking about include no application fee to weed out speculative projects, verification of financing, no requirement for drawings of proposed projects, not requiring systems to be built on existing structures which allowed for too many speculative projects.  All of these criticisms are legitimate when consideration is given to how fast this program was able to be up and running.  However, Mr. Resch appears to suggest that the only companies qualified to take part in solar expansion in Florida are large utility companies and national corporate interests with the following statements:

"So until the bigger companies really start to take a role in this particular program and they are in the queue, but what you are going to find is the first tier of projects that have received acceptance probably won’t ever get constructed. So Gainesville after six months is going to have to say “alright fine you guys aren’t going to be able to get it done, let’s go to the second tier” and that’s where you start seeing the SunEdisons and the Conergys and those kinds of companies who will be able to actually build some of these projects."

Apparently in Mr. Resch's world small business has little place in the expansion of renewable energy programs.  The Gainesville feed-in-tariff, the first such program in North America did not go off without a hitch and so that means we don't have enough corporate control of the process.  Apparently Mr. Resch has not been paying attention to utility costs in the state of Florida.  With large utility corporations in control of the process we have seen nothing but increased costs passed on to the consumer again and again, most having nothing to do with renewable energy.  It makes you wonder if Mr. Resch and the SEIA have gotten too cozy with the large utility companies and the lobbyists that deliver their demands. 

Rhone Resch's opinions aside let's look at some of the positive developments with the Gainesville feed-in tariff. Experts believe Gainesville’s feed-in tariff program will increase local installation of solar PV systems by an average of 1000 kilowatts per year over the next 20 years. The cost?  Approximately 1% accross the board to GRU customers. Less than one month after being implemented in March, 2009 GRU had already received proposals for approximately 12 megawatts of solar PV energy. As of September GRU has accepted enough applications to generate solar PV electricity to meet the program’s targets through 2016 and there were 36 solar PV systems already installed with a total capacity of 210 kilowatts.

According to Harald Kegelmann, CEO of Advanced Solar Technologies, a Gainesville solar installation company, "GRU has done an excellent job designing a FIT policy in a very short time.  But being the first always means that there are growing pains.”  Some additional improvements suggested by Mr. Kegelmann are educating local investors, engaging stakeholders to help validate feed-in tariff rates and channel business to local firms and setting aside a portion of the program quota for households, schools, public buildings and non-profit organizations.

It seems to me that if the ultimate goal is more renewable energy projects large and small we should embrace the feed-in-tariff model and strive to improve it to work for everyone.  Why is there no government sanctioned body in the state of Florida to study this issue and tweak it to provide for new green jobs and energy savings throughout the state?  Could it be that the energy lobby is deeply entrenched in this state and therefore what little urgency there is for renewable energy is focused on large corporate utility projects? 

Regardless, the action taken by the city of Gainesville and Gainesville Regional Utilities should be commended and we should allow them the time to refine and improve the program before nitpicking the process.