Feed in tariffs cause costs to soar

(Carson, 12-3, http://sites.utexas.edu/mecc/2013/12/03/why-the-dream-of-clean-cheap-and-distributed-electricity-is-so-difficult-to-achieve/)

Perhaps Austin’s most innovative program to encourage renewable generation closer to home is the “Value of Solar” pricing approach, which differs considerably from existing solar incentives. In Germany, the utility will pay a flat fee, known as a Feed-in-Tariff, to producers of solar electricity intended to lower the total cost of owning a system and thereby increase the number of systems within the country. The problem with Feed-in-Tariffs is that they artificially manipulate the price of solar electricity and can become top-heavy and expensive if too many people opt-in to the system. A federal Feed-in-Tariff is also a political non-starter in the United States. A more popular model in the US is known as net-metering. In a net-metering system, the energy produced by the solar PV array on the rate payer’s roof will be used before the energy from the electric grid. If the rate payer is not using much electricity but the sun is shining on a hot day, then any excess electricity produced will be sent back to the grid and the electric meter will literally run backwards. Instead of ever receiving a check from the utility for their power, consumers in a net-metering agreement will reduce their electric bills, sometimes to zero, and the PV system will pay for itself over time in reduced electric bills.