I'd like to start a discussion about FIT's in general.
From my point of view we have reached Grid-Parity in almost whole middle and south Europe. Taking into account that prices for energy were rising at least 5% per year, who needs 15ct or even 25ct as FIT?
Sure a FIT makes Renewables to a unique investment. You know at the beginning your minimum ROI - But does a low or not existing FIT give you loses?
Good questions Stephan,
Let me tell you my idea as following.
We "germans" need a FIT. The German Michel is crazy about subsidies and is able to open his mind when he get the chance to scrap money. The times when idealism and the idea to do something for our next generations were the reason to invest in "renewables" "something new" have long since passed.
There are still "teachers" ;-) I know.So please don't understand my arguments as universal.
The idea of most of the people who make the decision for PV, Solarthermal, Heat-pump etc. is, "when do I have my money back".. Have you ever heard someone asking this question when he is buying a heating system?
Anyway, in my opinion it make sense to talk about tax incentives for producer and for people who use renewable energies. Very important: Fixed regulations for a specific period; no changes because of political "games"
But much more important seems to be to do more awareness training to avoid discussions (because of misinformation) we had the last month. About the costs each person has to bear, in particular.
When we learn, that means everyone all over the world, that we all are able to do something to preserve the environment and nature for coming generations, we lose the thoughts for profit in the first place. MAYBE ,-)
Have a look to a positive sample: Several years ago it was difficult to convince customers to buy a condensing boiler instead of a standard gas boiler; the obstacle had been the additional costs... to date "condensing boiler" are standard..
I am an exporter of PV and wind systems. From my experience, the presence of FIT is a good encourage for people to start green energy. The stronger it is, the market wider, diversified and mature. It just makes idealism realistic and beneficial.
To some extent, I think a more important question is how to push grid-tied system in developing countries. Most of these countries, like China where I am, have no such incentive at all for individuals. Utility company is reluctant to buy from wind or PV power plant because they complain the alternative energy is not stable or too expensive. In fact, it is these countries that suffer from pollution from fossil energy most, and need to increase the percentage of green energy more urgently than developed countries.
Dear Cindy ,
If you are looking at pushing a on to grid solution for Solar energy to be sold to government grid with fixed regulations and pricing for 1 unit as per Power Purchase agreement ( PPA ). I can provide you the following
1. Land for upto 25 MW.
2. Get the PPA signed. ( Price details per unit can be found in Internet , which is around 12.25 INR.
Iam already doing so for a EU based company , operating with Solar Energy activities. They are planning to extend their invest to further 25 MW , closing it at 50 MW.
In that case please feel free to contact me at firstname.lastname@example.org
with best regards
FIT's are not necessary, and in some ways actually hinder a project. For example, we are waiting for one customer to finalize their power provider status so as to obtain FIT, even though it has been demonstrated that they make a substantial profit independent of FIT. Since this is only a demonstrator for a much larger project and independent of FIT, still obtain the same or better price from their customer, this is just being a penny wise and a pound foolish. In the USA, what would be longer lasting would be a permanent tax structure change. Allowing individual homeowners to apply first year capital depreciation or 5 year MACRS tax credits for Renewable Energy just as a business is allowed to do so. Tax code modifications tend to be more long term. FIT's can be pulled at any time. Allowing individuals the same tax code benefit allows full capital to be obtained in 2 years. On a 15 to 20 year note, a very good return on investment for the individual home owner.
It´s great that such a discussion has been opened. In my opinion the FIT´s are only necessary to secure investments and to satisfy investor´s rentability. Normally the FIT´s prevent all opportunities of increase of renewable energy generation and especially the use of renewables in industry and individual houses.
Assuming this thesis we developed a system throughout Europe where municipalities would be able to become theitr own energy provider among the power utilities. We are financing the projects for 100 % so that the councils don´t have to touch to any cent. For all pv plants we have in Spain , Romania and Germany which will be grid connected in 2012 and 2013 we already signed preliminary "Cross border PPA" in order to sell the energy abroad of the country of origin. This works quite well and gives security to all involved parties beginning with the investor and ending with the end consumer. We can guarantee the stability of prices rather than the power utilities do by increasing the prices by 5-6 % annually.
Same we are doing with all wind farms in Turkey, Rumania and South America. Since we have a portofolio of 240 MW of pv plants in Spain for 2012 and 2013, 280 MW of shovel ready pv plants in Romania and 758 MW of shovel ready wind farms in Turkey, we are in a very comfortable position to provide those plants turn key including a PPA securing the income without any subsidies, grants and without any support of FIT from any government.
The sounding throughout Europe confirms that we are on the right way however some power utilities try to prevent our PPA system because it bothers their own business.
We have a more simplistic view on FITs.
For us FITs start what we refer to as the greenwash or an under current of interest in green technology and power independence. As a company we've never really been grid tie module or inverter suppliers. We specialise in off grid projects so have a good view of the other side of the market which has definitely benefited from the FIT frenzy! Not least some of the advances in MPPT technology that make high voltage modules a real lower cost alternative for stand alone system projects.
In general people appreciate something more when they understand it's value which what the FITs have done for electricity. This is especially so in countries, like the UK, where net metering is the norm. Making hay when the sun shines (encouraging the use of solar power when its available) saves power and makes people greener which is never a bad thing.
in Romania in this moment it's cutting half of incentives (FIT), so the investors stop all pv plant. I think that for all FIT it's important. On the other hand for rooftop pv project, for company that have big energy demands i don't think it's a big problem if the FIT will disappear, but also in Romania the law is not so clear and many of them are afraid to invest.
I'm curious how much pv plant you realize in Romania before law modification. We made it 2 MW and the rest of projects (7,5 MW and 6 MW) has stop. Also our pv plant (1+1+1 MW) i don't know if we can realize because of the law. I also know company (foreign EPC that don't have romanian workers like we have) that build some field but don't connected in time and now they are afraid not selling them.
Since my last posting in August of last year, plenty of changes have occurred. Through our joint venture PSIDA ZEV we now offer electric vehicles along with solar power. This combination is two legs of a three legged investment strategy, the third leg being energy storage for load maintenance response and back up power. In many parts of the world, electric vehicles compete strongly against combustion engine vehicles, since we have a variety of ranges for our EV and hybrid electric vehicles, we can address transportation needs throughout the world and provide the power for these electric vehicles through our solar carports, solar charging stations and rooftop installations.
Looking through the numbers, independent of feed in tariff, overall return in less then three years anywhere in the world based on actual transportation and electrical needs. Thus, why do we need tariffs? Feed in tariffs in my opinion allow charlatans and weak offerings due to high potential of profit. A solid company will not set up just because of feed in tariffs, for as Balogh mentioned above, FIT's can be lanked at any time. A project with merit independent of feed in tariffs will move forward independent of the whims of politicians who are wined and dined by people who do not want to see Alternative energy success. So far, every where we have looked in the world, solar charging stations are unregulated and can sale power at what ever price EV owners are willing to pay. Under this financial windfall, your project has a strong earnings scenario independent of being grid tied or not.