Solar strength and satisfy in Tariffs

A satisfy-in tariff is a premium rate paid for electricity fed back into the electricity grid from a designated replaceable electricity generation source like a rooftop solar strength system or wind turbine. At present, satisfy-in tariff regulations for replaceable energy exist in over 40 countries around the world.

Germany sets the satisfy in tariff example

Possibly the most successful satisfy-in tariff laws would be those introduced in Germany over the past 15 years. In 1991 the German government introduced the Electricity satisfy Act, legally regulating the satisfy-in to the grid of electricity generated from replaceable resources such as solar strength. This Act required utility companies to buy electricity generated from replaceable resources such as domestic solar strength systems at set rates (satisfy-in tariffs).

The scheme was expanded and enhanced in 2000, and has been responsible for the emotional growth in Germany’s replaceable energy market, particularly the solar photovoltaic industry. In the five years from 2000, the quantity of electricity fed into the grid from eligible supplies has more than doubled, with a seven-fold increase in installed solar photovoltaic (PV) capacity to over 1,500 MW by the end of 2005.

Why do we need satisfy-in tariffs?

Residential solar strength is slightly disadvantaged due to the high entry costs. The market fails to take into account the true value and many benefits to the electricity network which arise from the adoption of replaceable energy technologies encased within the electricity grid.

Solar PV, like other replaceable energy supplies, provide environmental benefits by reduced greenhouse gas emissions and social benefits by industry development and job creation – for example by the installation of grid connect solar systems, each with related economic assistance.

A satisfy-in tariff redresses these systemic market failures and rewards solar electric generation for its true value to the electricity market and wider society, by providing a financial motive for the adoption of replaceable energy.

Design of a satisfy-in tariff scheme

For a satisfy-in tariff to be effective, it is basic that the tariff offered is designed in a way as to adequately reward solar PV proponents. There are three meaningful elements of a satisfy-in mechanism which need to be considered: The price level of the tariff; the method of metering; and the duration of the scheme. It is the proper combination of these three elements, which will determine the success or failure of a satisfy-in mechanism.

An effective scheme would include a satisfy-in tariff of at the minimum 4 times the market rate, paid on the complete output of a solar strength system (via gross production metering), and offered for at the minimum 15 years. Only a gross satisfy-in tariff set at or above these levels would adequately reward the adoption of solar PV for the range of environmental, social and economic benefits arising from this technology, and encourage the uptake at sufficient levels to unprotected to the policy goals.

When Germany introduced gross satisfy-in tariffs in 2000 it doubled the amount of electricity generated from replaceable energy supplies and modificated its 2010 target of 12.5% of total energy consumption. It is now three years ahead of schedule.

As a consequence of this success, Germany recently increased its replaceable energy target to 27% of all electricity generation by 2020. Also the gross satisfy-in tariff has produced nearly 250,000 new jobs in the replaceable energy industry, which will soon surpass the car industry as that nation’s number one employer.

The German solar strength sector is now creating three times the number of jobs per installed megawatt as the coal fired electricity industry – all of this in a country receiving much less sunshine than other parts of the world not participating in similar programs, or just engaging in minimal participation.

International experience tells us that gross satisfy-in tariffs can be very successful in stimulating the uptake of replaceable energy, addressing climate change and creating strong local industries and employment.

Tariff availability

As mentioned, some 40 countries throughout the world now have some sort of satisfy in tariff motive in place. In order to determine if satisfy in tariffs are obtainable to you, contact your local energy authority for further details.

How you can help

If satisfy in tariffs aren’t obtainable in your area and you care about fighting climate change, cutting greenhouse gas emissions and encouraging our domestic replaceable energy industry; then please write to your local elected representative requesting they consider gross satisfy-in tariffs as the most effective way to increase solar strength use.

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