Feed-in tariff

Feed-in tariff

"Dunkin Donuts electric power meter in Framingham MA" by Brian Katt is licensed under CC BY-SA 3.0

a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers, typically based on the cost of generation of each technology. Also known as FiTs.

Pros

Allows ordinary energy users to receive a guarantee market-based payment for renewable electricity they generate and feed-in to the grid.

Cons

Price setting for FiT energy can be challenging to adjust when new information is developed.

Real Talk

FiTs have been hugely successful in increasing RE-DER deployment in foreign markets such as Germany, but must be tracked carefully by administrators and insure inclusion of all types of investors.

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