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US Congress to debate German-style feed-in tariff

New legislation proposes above-market rate for small-scale renewable energy generators

Written by James Murray

The seemingly unstoppable march of the feed-in tariff reached the US last week, with four members of the House of Representatives proposing new legislation that would guarantee small and mid-sized generators of renewable energy an above-market rate for power they sell back to the grid.

Modelled on the German feed-in tariff – which is widely credited with delivering a renewable energy revolution in the country, creating more than 140,000 jobs in the process – the Renewable Energy Jobs and Security Act would provide guaranteed payments to small and mid-sized clean energy suppliers up to 20MW in size. In effect, this would guarantee an above-market price for energy produced by both onsite microgeneration technologies and medium-sized developments of up to 10 wind turbines.

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The Federal Energy Regulation Commission would be charged with setting the rates that utilities would have pay renewable-energy suppliers. Prices would then be reduced every two years over a 20-year period, with the goal of reaching or approaching market rate as renewable energy technologies become cheaper.

As well as proposing long-term fixed tariffs, the bill would also provide renewable energy generators with a guarantee that their systems will be connected to the grid.

The legislation is being proposed by democrat representative Jay Inslee and is supported by fellow democrats Bill Delahunt, Jim McDermott and Mike Honda.

Inslee warned that the US risked missing out on billions of dollars of cleantech investment if it does not do more to stimulate demand for such technologies. "The cost of inaction on global warming extends well beyond the serious ecologic and human health issues that already are taking a toll on our environment," he said. "There is also an opportunity cost if we fail to help America's brightest entrepreneurs to quench public demand for clean energy technologies here in the US."

The bill's supporters said with more than a dozen states having already enacted a feed-in tariff or considering doing so, federal legislation was also required to help avoid a "patchwork regulatory structure" for the renewables sector.

The bill is likely to receive widespread support from the renewables industry, which has become frustrated over Washington's failure to secure an extension to the existing renewable energy tax credits that are due to lapse at the end of the year.

The news comes as the US renewables industry received a further setback, after it emerged that the Bureau of Land Management (BLM) has issued a moratorium on all new solar energy projects on public land as it assesses the impact of solar farms on wildlife.

The BLM said it would continue to process 125 existing applications for solar plants covering almost one million acres, but insisted it would defer all new applications until after the environmental assessment is completed.

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