A few years ago, the City of Gainesville, Florida, drew some attention for its implementation of feed-in tariffs for solar. At the beginning of 2013, the policy was suspended, however. The strangest thing for Craig Morris was not the apparent glee with which some alleged supporters of renewables, including from the solar sector, expressed upon hearing the news. It was their inability to get the story right.
I should start this off with a disclaimer: In 2008, Ed Regan, Assistant General Manager of Gainesville Regional Utilities, visited Germany as part of a fact-finding mission organized by SEPA (Solar Electric Power Association). I gave the keynote address and accompanied the group to Intersolar, the giant PV tradeshow in Munich.
Regan went back and recommended implementing feed-in tariffs at his own utility in 2009. Granted, it was only for solar, and the program size was quite limited – but it was a start. Some of us hope that its success would be copied widely.
Four years later, Gainesville’s FITs have been discontinued, a move now heralded by some FIT opponents as a nail in the policy’s coffin. One solar installer told PV-Tech that the “failure” in Gainesville is something “that FIT advocates are going to have to explain.” How different the dismay expressed across the country about various governments trying to slow down residential solar in particular! Elsewhere, misguided politicians are held to be the problem – just not in Gainesville.
The installer says that FITs “overpay” solar, but in fact the possible (not guaranteed!) profit margin is targeted at a mere 5-7 percent in Germany, where net-metering would vastly overpay solar rooftops. The retail rate there is now around 28-29 cents, whereas only 10-14 cents is paid for solar. Today, US-style net-metering would thus provide at least a 100 percent profit margin on new solar in Germany, not 5-7 percent. It seems that proponents of net-metering cannot correctly explain the policy they criticize – more on that later.
Let’s first clear up the situation in Gainesville. I spoke with Pegeen Hanrahan of Florida’s Water and Land Legacy (and the mayor of Gainesville when the FIT was adopted, from 2004 until her term ended in 2010), who says that a number of reports make it sound like Gainesville had FITs and is now switching to net-metering (a policy I described here). In reality, “Gainesville has allowed net-metering to continue throughout the solar FIT period.” In particular, the installer says that “a FIT says you have to sell all your energy to the utility,” but Hanrahan says Gainesville citizens have been able to choose between net-metering and feed-in tariffs all along.
She adds that a claim in a recent report that “real jobs” are being lost is mainly because net-metering “does not accommodate a large number of projects” without a power buyer. If you don’t have a power meter to run backwards, net-metering provides no incentive, which is the case for most greenfield projects and a lot of community projects, where the solar investors are not synonymous with power users under the solar roof. FITs provide the same incentive regardless of your power meter.
Hanrahan says the city’s FIT success is clear: “Florida is in a minority of states with no renewable portfolio standard and no consistent incentives or policy supporting renewables. The FIT catapulted Gainesville to #8 in the nation in installed solar per capita. Gainesville also met Kyoto protocol standards at the end of 2013 and is now more than 24% renewable in its power supply. Many would herald these as victories under any policy framework. Renewable energy advocates certainly should.”
One city commissioner argued that Gainesville simply did not need more solar power, but Hanrahan says “we face upward price pressure in general, mainly from a new biomass plant and the great success of our conservation programs, which have lowered demand.”
So it seems that we are back to the problem of early retirement, an obstacle towards renewables that needs to be addressed more clearly. Furthermore, resistance to Gainesville’s solar FITs is clearly an attempt to slow down solar, not switch to a better policy.