US lawmakers outline plan for feed-in tariff bill

The Senate may still be preparing itself for the upcoming battle to pass a climate change bill, but that has not stopped two House Democrats laying the ground work for a second bill designed to promote renewable energy use and curb carbon emissions.

Representatives Jay Inslee of Washington and Bill Delahunt of Massachusetts last week announced they are preparing a bill for consideration next year, which would introduce a nationwide feed-in tariff scheme that would provide small-scale producers of renewable power with above-market rates for the energy they generate.

Speaking at a press briefing on Capitol Hill last week, the representatives said that the bill would be modelled on German feed-in tariffs that have been widely credited with establishing the country as a leading player in the global solar and wind energy markets.

The Waxman-Markey climate change bill, which will shortly be debated by the Senate, already includes proposals for a renewable energy standard that would require US energy firms to ensure a proportion of their energy comes from renewable sources.

However, Inslee and Delahunt insisted that a feed-in tariff could be introduced alongside any renewable energy standard, adding that it would help ensure the US develops a diverse mix of renewable energy sources.

"The renewable-energy standard is good, and I'm a firm backer, but it has a weakness," Inslee said. "It's really only an incentive for the next-closest-to-competitive technology, frankly, which is wind right now."

He explained that a sliding scale of feed-in tariffs would encourage a raft of different technologies and help to commercialise products such as photovoltaic solar panels, which experts believe will come down in price as manufacturing scales up.

The new bill is likely to build on a previous proposal Inslee sponsored last year, which would offer above-market rates to any renewable energy project generating less than 20MW, guaranteeing them a 10 per cent rate of return over the life of a 20-year contract.

Any new bill is likely to face staunch opposition from Republicans who are already lining up to argue that any feed-in tariff would increase energy bills for households and businesses.

However, Democrats are hopeful that the legislation can win support, particularly given that a number of states, including Michigan, Minnesota and California, are preparing to follow in the footsteps of Vermont and launch state-level feed-in tariff initiatives.